FTP Agreed to Exclusive Negotiations

July 10, 2011 - 7:43 PM EDT

Full Tilt Poker has entered into an exclusive bargaining agreement with a prospective European investor.

The agreement, reached on June 30th, requires Full Tilt to stop negotiations with other prospective investors for at least three weeks while the primary suitor conducts due diligence investigations and negotiates with the poker site’s executives. Due diligence presumably poses a significant hurdle in this case because Full Tilt is an opaque entity with a complex corporate structure, an indicted executive, a civil complaint against it from the United States Department of Justice’s, and public troubles with regulators in Alderney, France, and the Kahnawake Mohawk Territory. Subject: Poker has confirmed from numerous sources that the US DOJ, the Alderney Gambling Control Commission, and the French regulatory authority ARJEL are all actively communicating with both Full Tilt and the prospective investor.

A reliable source who spoke on the condition of strict anonymity said that Full Tilt’s primary request is enough money to repay players and to cover a potential settlement of the United States Department of Justice’s civil complaint against the poker site.1 Since Full Tilt agreed to this exclusive agreement in spite of the presence of other suitors, the poker site’s executives presumably believe that the primary investor is likely to meet these terms.

This exclusivity agreement is the same agreement reported by the Los Angeles Times, which was widely misinterpreted as a finished agreement to sell some of the company.2 Subject: Poker wishes to stress that no such deal has been finalized, and to our knowledge, Full Tilt has not yet raised any capital from any investors. The actual deal simply involves exclusive negotiations, though it may lead to a sale in the future.

The prospective investor was introduced to Full Tilt executives in mid May by Phil Ivey, a Team Full Tilt member and a partial owner of the poker site. Shortly afterwards, on May 31st, Ivey released a public statement complaining about the fact that players had not been paid and filed a civil complaint against Tiltware, one of the companies behind Full Tilt Poker. Full Tilt responded quickly with a remarkably angry public reply claiming that Mr. Ivey’s lawsuit was hurting negotiations with prospective investors. Ivey withdrew his lawsuit on June 30th, the same day that the exclusivity agreement was signed. Subject: Poker has heard conflicting reports about how Ivey’s public feud with the poker site has influenced negotiations.

Full Tilt Poker has been unable to repay its US players since the US Department of Justice indicted its principals and filed suit against some of the many companies behind the poker site on April 15th. It has recently had troubles repaying non-US players as well. On June 29th, Full Tilt’s main regulator, the Alderney Gambling Control Commission, suspended the site’s licenses. Subject: Poker has reported throughout on the company’s largely secret attempts to raise capital in order to repay players, and we will continue to investigate and report on what we learn.

Edited on 7/11/2011 8:08 AM EDT: Added link to Poker News article about Tiltware’s response to Phil Ivey’s lawsuit.


  1. Our source said that the Department of Justice has already outlined the terms of a potential civil settlement with Full Tilt Poker. However, Subject: Poker is unable to verify this claim, and this is the first that we’ve heard of such advanced negotiations with the DOJ.
  2. Subject: Poker regrets publishing an article announcing the LA Times report and thus contributing to the misunderstanding.

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13 Responses to FTP Agreed to Exclusive Negotiations

  1. Anon
    July 10, 2011 at 8:49 PM EDT

    I’m confused.

    The LA Times (and WSJ article the day after) were accurate. The headline of the article is “Full Tilt Poker to be sold to European investors”. It didn’t say it was a done deal. It uses conditional language throughout. It reported on the agreement signed on June 30th – the same deal you are reporting 11 days later, of ‘exclusive negotiations’.

    Yes, some media establishments regurgitated and misreported what the LA Times said. But that doesn’t change the fact that it was the mainstream media who uncovered the story, which was later confirmed by the AGCC, and which you are confirming now.

    I also find it odd you regret reporting the LA Times article, but don’t regret, say, the article regarding Binion in “advanced talks” to invest in FTP, four days prior to this exclusivity deal. Or reporting that FTP was going to move to the KGC within hours because they already held a permit that would allow them to skip a wait period and get back online “within hours,” which later the KGC reported to be inaccurate.

    • Noah Stephens-Davidowitz
      July 10, 2011 at 11:57 PM EDT

      While I agree that the LA Times article was accurate, I feel that it was worded in a misleading way. Because the article said “Full Tilt Poker to be sold to European investors” and that the investors and FTP had come to a deal, it was widely interpretted as an announcement of the sale of part of FTP. I don’t fault the reporter for this, but I think that we contributed to this by writing an article entitled “FTP Sold to European Investors?” By publishing an article that simply relied on the work of others, we risked misinterpretting the article and connfusing our readers. We typically avoid doing that, but clearly we didn’t here, and we regret that.

      For example, we chose not to cover eGaming Review’s story that some FTP funds had been unfrozen by the DOJ. In attempting to independently confirm the story, we learned that the DOJ had not unfrozen any accounts, which encouraged EGR to return to their sources and learn the real story: The Bank of Ireland had frozen and then unfrozen an account independent of the DOJ. I think that this is a healthy process and a great example of the way that we should handle the stories of other reporters–with extreme scrutiny. (We also did not report Full Tilt’s response to Mr. Ivey’s lawsuit when it came out because we were unable to independently confirm it. So, obviously there are downsides to this policy.)

      So, I agree that the LA TImes uncovered the story of the European investors, and I certainly think that they deserve praise for that (not that they need it). We simply do not think that our article about their reporting was appropriate, and we took this opportunity to express our regret.

      However, I do not think that this article simply confirms the LA Times story. There is certainly new information here, and we feel that it’s quite relevant. In particular, we clarified what kind of deal was signed and provided a timeline. Of course, some of the details are still unclear, and we’re working to learn more.

      Both our binion article and our KGC article were accurate, and I don’t think that they were misleading. Binion was indeed in advanced talks with Full Tilt shortly before this deal was signed. Full Tilt did indeed consider reopening under a KGC license (In fact, they moved their backup data to Mohawk servers in preparation), and our article said quite clearly that FTP’s licensing situation with the KGC was unclear at the time. In fact, the KGC’s statement acknowledging the uncertainty here was in direct response to our follow-up inquiries. We don’t regret either of those articles.

      Regardless, we appreciate the scrutiny. it’s good to know that our readership is as skeptical as we are.

      (Editted 7/11/2011 11:13 AM EDT)

      • peter
        July 11, 2011 at 4:29 AM EDT

        So this means that they are almost 2 weeks into negotiations, do you have any news of how the negotiations are going??

        • Noah Stephens-Davidowitz
          July 11, 2011 at 7:11 AM EDT

          They’ve been negotiating for longer than two weeks. I don’t have a date for exactly when negotiations started (and that would likely depend on your definition of negotiations), but Full Tilt execs have been aware of these potential investors since at least mid May. The exclusivity agreement started almost two weeks ago.

          How negotiations are going is such an entirely subjective thing that we prefer not to report what we’ve heard, especially when all of our sources have some bias in that regard. (We haven’t heard much, anyway.) I think it’s reasonable to assume that Full Tilt execs are optimistic since they agreed to exclusive bargaining.


  2. Bruce Stutzman
    July 11, 2011 at 3:35 AM EDT

    Noah, did the reliable ftp source mention the amount that they are expecting to be invested to pay back players? I am asking because there should be a very large amount withdrawn as soon as ftp goes back on line, if ever, I would think they also do not have enough to cover those funds as well, as they would have dipped into those to pay back us players?? So if ftp owes usa players 150 million, they get 150 million, but then europe tries to with draw 200 million but ftp only has 50 million….

    • Martin SJ
      July 11, 2011 at 2:31 PM EDT

      I think if full tilt is sold, and there is enough to repay US players, that Full Tilt will have their bank account which suppoedsly were frozen would be unfrozen and there would be money to repay NON US players aswell. No one can say how the players would react if full tilt goes back online. I think I would be willing to give it a go if ftp is sold, cause the new owners knows that they can’t take a month making a withdrawal as it has taken since BF, we for sure need to be reassured that Full Tilt has a good and healty cashflow in the future, otherwise they prob wont be able to recover.
      For me atleast I know if they come back online, I would prob make a withdrawal to see what the new status would be, if it takes more than a few days I would prob be done playing at tilt. If my withdrawals in approved wihtin a few days I would continue playing there. I would prob keep making small testwithdrawals making sure that they will keep up a hopefully more healthy cashflow.

  3. skin
    July 11, 2011 at 1:50 PM EDT

    i am a uk play a have a lot of money in ftp all i here is us player not one thing about europe player come on ft get your act together

  4. John McDonald
    July 11, 2011 at 4:06 PM EDT

    Personally, I think it is all supposition at this time, until something firm from either the FTP execs, and or Lawyers come out and say so, in an official capacity. I know if I was an exec of a company and was in negotiations with an outside company, and my Lawyers “leaked” information, I would sue them for breach of fiduciary duty, which they are bound by. Wording in the LA Times article, such as “Attorneys associated with Full Tilt said the company……” and “Attorneys close to Full Tilt said….” is, in my opinion, odd, as No names are mentioned, just “Attorneys” This is of course a moot point IF the FTP execs have given permission to “leak” information, which is not outside the realm of possibility, considering FTP execs lack of business skills. I mean, not even a short news release from Ray, Howard or any exec from FTP, saying something along the lines of “Sorry for the delay, but we are working on a resolution, addressing our present situation, that will satisfy ALL of our players needs, in the near future.” Vague, not saying anything specific, and non binding, in case nothing happens.

  5. Kynikos
    July 11, 2011 at 4:43 PM EDT

    It’s very promising if the regulators and the DoJ are all involved in the negotiations. While of course it makes things much more complex (since there are more parties negotiating) it means it is likely that any deal will include a final settlement with the DoJ, Party Poker style, meaning FTP can open for business outside the US with a stamp of approval from Alderney and ARJEL and the players’ deposits can be released and repaid. This means that the amount they need to raise is “only” the amount needed to settle with the DoJ. It will still be a big number, but I bet it will be a lot less than a billion.

    It’s really hard to think who the European investor might be. I could imagine Andy Beal cutting a deal like this but there aren’t too many Andy Beals in Europe. Branson maybe, with a rebranding to Virgin Poker? Bernie Ecclestone likes to play though this is not really his style. Perhaps its Abramovitch or one of the other Russians.

  6. youshouldknowtool
    July 11, 2011 at 8:14 PM EDT

    “The prospective investor was introduced to Full Tilt executives in mid May by Phil Ivey, a Team Full Tilt member and a partial owner of the poker site.”

    1, deal is done, pending approval of the payout to bitar and Nelson by Doj to be settled with doj, soley by Nelson and Bitar
    2. doj negoiations are with Bitar, not with new controlling owner who holds in his name every shell co connected to FTP

    3. Marco is correct, the investor Ivey introduced was Jack Binion, on behalf of Wynn International, under the guise “Eu Investor” so that it is not known publically

    4. Ray was forced out

    5. you know nothing, but what someone might want you to know, or not a reliable source.. Now, I expect you to kiss my ass when you see u are wrong, and I am right. thanks!

    • oneonth3run
      July 13, 2011 at 3:48 AM EDT

      Can you verify or back any of this with hard evidence?

  7. Scott
    July 11, 2011 at 8:38 PM EDT

    Noah ,
    Thanks for publishing this clarification. This makes a lot of sense as a lot of investors who are going to commit $100s of thousands in DD want exclusivity – still I cant imagine what these guys are thinking. The closure of the site was the real nail in the coffin. Every day its down, the value falls and if this story is true it could easily be another month before FTP has the money it needs to re-open. I can’t see a deal of this magnitude being done in less then 1 month after DD is completed.
    It all seems a bit off the wall despite how confident the FTP people are…its looking more and more like a $300M commitment, which will include the real possibility now of losing a lot of the offshore players, significant restructuring costs (layoffs at Pocket Kings, etc..), payments to the DOJ and finally lots of promotions to keep players. The FTP brand was based on a lot of US players who unless they go offshore to live will not be ‘publicly’ playing online for a while. Even if they make a deal with the DOJ, there are so many other things that can go wrong.
    What all of us really want to hear is what the DOJ deal is looking like – because clearly thats the real possible killer – not just from a money standpoint, but whether they insist the company cooperate against Bitar and company – I can’t see them letting the company off that and not getting cooperation – and I can’t see Bitar or the FTP gang agreeing to that issue. Wonder if that is part of the deal?

  8. Worried Wombat
    July 19, 2011 at 1:58 AM EDT


    3 week period started on Thursday June30. So it would end tomorrow on Wednesday July20, right?

    Also the Alderney meeting on July26 is now a “public hearing” which IMHO rules it out to be a proper hearing. It would seem likely to be rather a presentation of why FTP gets their licence back or not. (just my opinion)

    So it pretty much is now or never for the next 7 days I guess?

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