Dan Fleyshman is CEO of Victory Poker, originally a skin on the Everleaf Network but now on the Cake Network. Before the indictments on April 15th, VP had planned to move to the Cereus network. Three days after Black Friday, Victory Poker pulled out of the US market, and as Fleyshman explains in the interview, his plans to move to Cereus were canceled.
In the first half of the interview, Fleyshman discusses his background and the formation of Victory Poker, the financial relationship between skins and networks, his planned move to Cereus and the controversy surrounding that, and his views on the DOJ indictments. In this second half, he discusses his decision to leave the US market, the feud between Doyle’s Room and the Cake Network, Victory Poker’s debts to Two Plus Two Publishing and David “The Maven” Chicotsky, and what he thinks about Victory’s treatment by the media.
Pulling Out of the US Market and Potential Future Indictments
Noah Stephens-Davidowitz: You touched on this a little bit, but I want you to be clear. Why exactly did Victory pull out of the US market? I believe you pulled out three days after Black Friday. Right?
Dan Fleyshman: Yeah. I wanted to pull out the day after, but it was a Saturday, and I was e-mailing back with Cake. So, it went effective on Monday; that’s all.
Why did I pull out? ‘Cause it’s over. Once I saw Stars pull out and then Tilt pull out and then even Cereus pull out, I mean, that’s just like, that’s the three biggest sites are out, and there’s no resolution or way for it to go back on, and it’s gonna be state-by-state, and what politicians are gonna step up and fight this? They’re not gonna win. Even if somebody gets it through, then it’s gonna go through appeals for two years. It’s just–It’s over for many years now.
NSD: But, those are things about other sites? Presumably, Victory stood to gain a lot more players if it stayed. Right?
DF: Oh, yeah. If I would’ve just stayed, I could have been like Merge and just taken in all the players and make it rain and, you know, make all this money. I don’t want the risk of getting in trouble. I didn’t do anything wrong. I made everything clean and proper, and for me–I came into the online poker industry feeling like it was completely totally a good business to jump into. Even though there were big players in it already, I wasn’t scared of that–just like with the energy drinks, I wasn’t scared of fighting with Rockstar and Monster and Red Bull. So, I wasn’t scared to fight with Stars and Tilt. The reason I jumped in is these guys were spending $200 million a year on TV advertising. They had a TV show on ESPN, Fox, NBC, all these major channels; why on Earth would anybody think it’s illegal since they’re letting in run on, you know, basketball Sundays–It’s NBC heads up at 1:00, right? Why the heck would it be illegal? So, that’s when I jumped in.
When the government went in and shut people down and seized–going after $3 billion and eleven indictments, 76 bank accounts, fourteen countries, like, all this dramatic, crazy stuff.1 Like, that’s not–That’s not for me. That’s not what I’m here for.
NSD: But, to be clear, you say you’ve done nothing wrong, so it’s still a little confusing to me what specific scenario you left the US market to avoid.
DF: Because they’re not done yet. I think they’re going to keep going after more and more. There are gonna be more indictments coming, and a lot of people are gonna be–[Fleyshman's voice trails off.]
For me, I’m the only site that’s really on TV every night besides like Doyle’s Room, and that’s only one site, and that’s only when he’s playing–and Unabomber. So, there’s not really any poker sites in America that are on TV, and I just don’t wanna be the focal point. If they wanna come and arrest me and then let me fight my way out–I don’t know what they’d arrest me for, but why would I wanna wait around and find out? I don’t. For me, it’s not worth it. And, none of my actions in the past would–I don’t know how you say it–would make a reason for them to, but just the way the whole thing went down, and then how it all unfolded. My decision, everybody criticized me for, but then a lot of other poker sites started blocking the US. Even Sportsbook.com, PlayersOnly, guys that are on the sports-betting side of things, guys that have zillions of dollars, even they started blocking the US.2 So, people thought I was crazy for doing it so quickly, but now over eleven or twelve sites that I know of have blocked the US as well.
NSD: What do you think about the other Cake skins that have stayed in the US market? Merge skins and Bodog?
DF: I don’t think anybody is really at risk of getting in trouble. I think it’s much more about the money, and it’s much more about the processing. Skins are not gonna get in trouble because really they’re just–They’re an affiliate; they’re a marketing tool, whereas UIGEA is really about the wiring of funds internationally and terrorist acts and all those things. So, for them to continue in the US, that’s totally fine. Like, that’s up to them. For me, it was just a different situation just because of how public we are and how much bigger our site is branding-wise.
NSD: But, you said that you think there are going to be future indictments. If the skins are fine, do you think that those are going to be against the networks, like Cake and Merge?
DF: Right now–I mean, Cake and Merge have no legal things going against them right now. I mean, I talk to all of them. They’re not scared at this point, and I’m not saying it’s necessarily against them. It’s definitely not againt the skins ‘cause that would be silly. They would never win that case. They have to go after where the guaranteed money is, and I don’t know if Cake and Merge are even worth it for them. I mean, the legal fees alone to fight with Cake and Merge, when they’re low eight-figure-a-year companies–I mean, there’s just not enough money there for the government to go after.
NSD: How has the pull out of the US market affected your business? What percent of your players were from the US? How has it affected rake?
DF: Just under half the players were US players. So, it affects it like that except that we have more international players joining. So, it doesn’t balance out, but–It’s just like I was saying with Full Tilt and Stars; they’re going to keep growing internationally. On a much smaller smaller scale, we’ll keep growing internationally. But, we’ve lost the heart of our business. We lost the fun of our business. I mean, the US is where the boys were on TV; it’s what we do; it’s where we throw our charity events; the US is where the fun is. So, it just emotionally, like, changed a lot of things.
NSD: Are you planning to start advertising differently now?
DF: Well, we won’t advertise in the US at all. I mean, we’ll still be wearing patches in certain situations. Like, all our guys will still be wearing patches all the time, but we’re not gonna be buying ads. We’re not gonna be advertising in Card Player or Bluff or anything in the US.
NSD: But what about internationally?
DF: Yeah, internationally we’ll just continue dealing with affiliates, and we’ve always advertised with like Bluff Europe and Poker Pro Canada. Like, we’ve always advertised with different–all these international sites and Scandinavian markets–things like that. So, we’ll just continue those things, and kind of reevaluate pretty soon, once you know–The dust is really settling now to just kind of figure out during the World Series of Poker what our direction is and what we wanna push forward on, if there are certain markets that are the best, so–[Fleyshman's voice trails off.]
Dispute Between Cake and Doyle’s Room
NSD: You’ve talked publicly about a dispute between Doyle’s Room and Cake Network. Can you clarify what happened there?
DF: Yeah. I mean, I don’t know all the details because–I’ve heard all 3 sides. I mean, I wasn’t there during the whole time, and I got to hear a lot of–Actually there’s four sides to it. Normally there’s a right side, a wrong side, and the truth. In this case there’s actually Cake Network, Doyle’s Room, and Yatahay. And, Yatahay kinda came in and saved the day nobody, which was nice of them. Nobody was happy at the end, but everybody should have been happy–It’s kind of a weird spot. Basically, Doyle’s Room ran up a really large debt. I’ve heard all different stories, but pretty much the consensus is around $6 million. That’s the main number. They were a site that continued to grow and grow, so that debt isn’t reflective of what their business was. They had a successful business, but their debt just get accruing. There’s a lot of factors to it, and I don’t know enough about it to say what happened.3
NSD: So you don’t know how they accrued that debt?
DF: I mean, yes and no. I don’t know–I wasn’t there for their whole business, so it’s not my place. So, they had a really big overhead. That’s best way to put it. You know, when you have ten pros that you’re paying consistent income to every month and buying people into events and traveling around and buying ads all over the world, that’s expensive. So, it’s not hard to run up a debt like that when you have a big six-figure budget every month. I have a very low six-figure-a-month budget, so for them–They must have been in the mid six figures, if not higher, per month. So, it’s pretty easy to have a debt run up.
So, at some point, Cake is like, “You know you need to pay us,” and Doyle’s said “We can’t pay it all right now. You know the situation. Blah, blah, blah.” And they said “Well, ok fine. We’re gonna move ’cause Yatahay offered to pay some of the debt and help us move forward for the future.” So, Yatahay came in and saved the day. They settled on an amount no where near the $6 million number, and Doyle’s Room moved to Yatahay.
NSD: Do you think that Doyle’s Room would not have ever been able to pay back that $6 million?
DF: Um, no. I mean, they’ve always had a good amount of depositors per day, and they have a good market brand. They weren’t growing much internationally because Doyle doesn’t play much internationally, and that’s the only way they got media, and their affiliates would get them players, but again–They could have grown out of it, but their debt kept accruing at the same time. So they would have had to have grown faster than their mid six figure–whatever the number is–debt.
NSD: Are these debts common?
DF: Oh yeah. It’s just a business thing. I mean, it happens in all businesses, whether you’re a coffee shop or you’re a TV manufacturer. I mean, look at Facebook. It doesn’t matter who you are. They all run on debts until they get to a certain point. There’s a turning point, and whether it takes two years or 6 or 7 years, there’s that turning point. That’s when you become profitable.
Victory Poker’s Debts
NSD: Speaking of debts, I’m told that Victory Poker still owes money to Two Plus Two. Is that correct?4
NSD: That’s Victory Poker’s debt, not a personal debt. Right?
NSD: Are you having financial problems? Is that what caused the debt?
DF: No. There was four of the five payments or five of the six payments were made to Two Plus Two, and then the last quarter wasn’t. Actually the last–Was it the last month? The last month wasn’t. Basically, I paid them about $40 grand, and I owe them about $6,700 or $6,800. So, it’s not like I did a deal with them and then didn’t pay them; They got like $40,000 of it.
What happened was we were gonna do a co-op, like, news/media-type show with them, like live video type things, and I spent a bunch of money to build them whole set and hire video editors and extra people, got them an apartment, and moved them to Vegas. There was a lot of overhead, and [I] brought in–I don’t know–fifteen or twenty pros and did all these interviews and filmed for weeks–All these shows, and [we] had all this content. And then, we did everything they asked plus some because, you know, we had all these major names do it that we didn’t expect to basically jump in. And then, all of a sudden, Mason was like “Ok. We don’t like it,” and instead of saying, “We can change this” or “Let’s do this” or “Let’s do that,” he just basically told me to screw off.
So, that’s the reason there was a little bit of lingering. I spent, you know, five figures on doing a show that they asked me to do, and it was all adjustable and changeable, and you know, we were right down the street. So, it’s not like it’s hard to fix and make it work, but instead they’re just like “Nope. Sorry.” Well, it wasn’t even “Sorry;” it was just like “No.” So, it’s not really–You know, to me it’s not exactly a debt. Like, I spent three or four times what we owe them, and then–For me, like, I’ll end up paying them just because I don’t like it keeping getting brought up, but to me they should have split the cost on the headache that they caused us. You know, besides, we spent all that money for them.
NSD: So you are planning to pay the debt?
DF: Yeah. I mean, I would like them to do something for what we spent for them, but basically, like, we’ll figure it out–with them.
NSD: $6,800 sounds like a very low amount for a large company to leave unpaid.
DF: Right. Like I said, we paid them $40,000, and I mean I spent $2.5 million, so the $6,800 is not a big deal. It’s just that there’s principle to it.
It’s just like with the Maven and some other little things.5 They’ve gotten 80, 90, 95 percent of their money, but sometimes at the end when people don’t do things or do things we don’t approve of or things change, it’s not really about that little last payment. You know, once they get that payment, the situation is not resolved. They disappear. I want to at least have something so we can keep the discussions going.
NSD: Subject: Poker has actually been told by a lot of sources that that is not Victory Poker’s only debt. We’ve been told that Victory has a lot of debts as a result of advertisement. Is that true?6
DF: Absolutely, positively not true whatsoever. Nobody could name them. I can call any member of media right now–I can text them, call them, and nobody will say the same thing.
NSD: So you’ve paid all your debts except for the $6,800?
DF: I don’t have debts with media because I always prepay for my ads, so it’s impossible for me to have those debts. Two Plus Two was one of the only ones where I had quarterly things and monthly things in advance. Whenever I buy adds from Bluff Europe or Card Player America–I mean, there’s magazines that don’t need money; let’s put it that way. [Fleyshman laughs]–that I’ve prepaid for and didn’t get my ads. So, everybody likes to talk about debts, and I owe this and I owe that. I don’t ‘cause I prepaid mine; Victory prepaid for the ads.
NSD: So is the only debt that Victory Poker has the debt to 2+2?
DF: No, there’s $37,000 or $38,000 in debts out of $2.5 million.
NSD: Who’s that to?
DF: The Maven.
NSD: What’s that for?
DF: Two months. Two months? Two months or three months or two-and-a-half months on the last part of his contract.
NSD: Why isn’t that paid?
DF: Similar situation, but he’s gonna get his in I think like week or so. We basically came to our conclusions. It was just a similar situation where there were just other factors that we wanted to finish up and discuss with him, but he’s gonna get his just because I like what he’s doing, and I’ve always liked how hard he works. There were just some other factors on why the last two months didn’t get paid to him.
NSD: You don’t want to say what those are?
DF: No. They’re just personal things. It’s nothing to do with business. I mean, it has something to do with business, but I mean, like, it was just more getting that closure before. That’s all.
Victory Poker’s Treatment by the Media
NSD: Alright. You have to go, so I don’t want to keep you. I very much appreciate you doing this interview. If there’s anything else you’d like to say, feel free.
DF: No. I’m happy you guys are making a news site that actually is very blunt because a lot of media is–Not only is a lot of the media swayed by things, but some of them won’t write on articles or write on things unless you’re paying them. So, it’s not my thing. I’ve never done that. I don’t care about it. I just like the blunt truth, and that’s how I’ve always acted in this industry–Just really be blunt about things, and you don’t have to remember what you said.
NSD: Have you specifically heard that deal discussed? Have you had people say, “we won’t publish an article about you unless you pay us?”
DF: Sure. I mean, there’s lots of magazines that say “pay us, and we’ll put you on the cover.”
NSD: Who’s said that?
DF: Like, almost all of them, basically.
NSD: So did Victory Poker not get covered by Card Player and Bluff…
DF: [Fleyshman interrupts.] Yeah, like, Card Player, like–It’s weird. Like I prepaid them for things, and they still owe me a month here, a month there in different countries and online.
NSD: That’s for advertising?
So then Antonio wins the World Poker Tour and Robl comes in second in the same thing, and they don’t have one-pager, let alone a cover for him. How’s that not even a one-pager? And, every other magazine–I have fifteen covers of Antonio in all these different countries, but then the local US magazines don’t put Antonio on there ‘cause I don’t buy ads from them.
NSD: [Interrupting while Fleyshman says something inaudible] Did you stop buying ads from them?
DF: Well, I stopped buying ads from them because I didn’t really need to focus on US advertising anymore because we were getting so much TV time, and I wasn’t gonna be able to outspend Stars and Tilt when it came to US advertising, so I focused on Canada and Scandinavian markets and the European markets.
NSD: I’m sorry. I interrupted you. I think you were going to say something about your opinions on Card Player not doing that.7
DF: Yeah, ’cause it’s not even about Victory itself. It’s just disgusting. I mean, Antonio’s major news by himself. Antonio winning the World Poker Tour is just automatic. Whoever wins the championship of the World Poker Tour at the Bellagio gets automatic coverage. Whether it’s random kid from Nebraska, it doesn’t matter. Antonio winning is a big story, and Robl coming in second in the same event is a big story, and it’s just a no-brainer to have a one-page, two-page, four-page spread. Where over a dozen other magazines in different countries made him the cover story, and for Card Player and some other magazines not to even have a one-pager, just–It’s sickening really ’cause it’s just media; it’s news. It’s not about Victory; it’s not about me; it’s not about anything. It’s just–When one of your most famous poker players in the industry wins the World Poker Tour, it’s just obviously news.
Antonio was sad about it ’cause, like you know, he’s had a long relationship with Card Player, and not only did he not get a cover for it, but they literally didn’t even put a one-pager about it. It’s pretty sick.
NSD: So Antonio is upset about this too?
DF: Well, I mean, he was sad about it. ‘Cause, you know, he was really excited to win after seven years, and then to not have the magazine he’s been with since the beginning not write about it, then it’s just–[Fleyshman trails off.]
NSD: I’ll bet money made up for it, though. Right?
DF: [Fleyshman laughs.] Yeah.
NSD: Thank you very much. I don’t want to keep you. This was really good, and I very much appreciate it.
- Fleyshman is referring to the indictment of payment processors and owners of Full Tilt, Poker Stars, and Absolute Poker, which asked for forfeiture of $1.5 billion for PokerStars, $1 billion for Full Tilt Poker, and $500 million from Absolute Poker and referenced the seizure of many bank accounts. ↩
- Sportsbook.com and PlayersOnly are both sports books and skins on the Merge network that are still allowing US players to play for real money but are not accepting any more US players. ↩
- Fleyshman is referring to the time period before Doyle’s Room moved from the Cake Network to the Yatahay Network. Subject: Poker has heard this story from other many sources who do not wish to be quoted. We have asked for a statement from Cake Network, Doyle’s Room, and Yatahay. ↩
- I was told this by Mason Malmuth, owner of Two Plus Two Publishing. Malmuth declined to comment on Fleyshman’s description of events. ↩
- Fleyshman is referring to David “The Maven” Chicotsky, who used to be a Victory Poker Pro. He goes into more detail about this debt later in the interview. ↩
- Numerous independent sources have told Subject: Poker that Victory Poker has many debts. None of them are willing to provide specifics, but they’ve all said that the debts discussed in this interview are not Victory’s only debts. We can’t independently confirm either story. ↩
- Subject: Poker has contacted Card Player for comment. ↩