Subject: Poker has received the following unprecedented statement from Full Tilt Poker:
As is obvious from the events that have transpired since April 15th, Full Tilt Poker was not prepared for the far-reaching, US government enforcement effort of Black Friday.
The events of Black Friday came on the heels of prior government enforcement activities and significant theft. Over the two years preceding Black Friday, the US government seized approximately $115M of player funds located in U.S. banks. While we believed that offering peer-to-peer online poker did not violate any federal laws—a belief supported by many solid and well-reasoned legal opinions—the DOJ took a different view. In addition, as was widely reported, a key payment processor stole approximately $42M from Full Tilt Poker. Until April 15th, Full Tilt Poker had always covered these losses so that no player was ever affected. Finally, during late 2010 and early 2011, Full Tilt Poker experienced unprecedented issues with some of its third-party processors that greatly contributed to its financial problems. While the company was on its way to addressing the problems caused by these processors, Full Tilt Poker never anticipated that the DOJ would proceed as it did by seizing our global domain name and shutting down the site worldwide.
Over the last four months, Full Tilt Poker has been actively exploring opportunities with outside investors in order to stabilize the company and pay back our players. At least six of those groups, including hedge funds, operators of other internet businesses and individual investors, have visited Dublin to inspect the operation. We have recently engaged an additional financial advisor through an investment banking group to assist us in our search for an infusion of cash as well as a new management team to restore the site and repay players. While any deal of this nature is necessarily complex given the current regulatory environment, our players should know that Full Tilt Poker is fully committed to paying them back in full and restoring confidence in our operations
The statement contains three new important pieces of information:
First, it reveals that the US government froze $115 million in the two years up to Black Friday. Much of this money was frozen long before Black Friday, and the majority of it was eventually forfeited to the US government.
Second, the statement says that at least six groups of prospective investors have travelled to Dublin, where Pocket Kings Ltd is located, as part of their research into the poker site. Subject: Poker is aware of at least four such groups, so we believe this statement to be accurate.1
Third, the statement confirms widespread speculation that, if Full Tilt is to reopen, it will be under new management.
The statement also draws attention to two significant losses that the company suffered in the past:
First is the $42 million stolen by Daniel Tzvetkoff’s Intabill over two years ago. Tzvetkoff was arrested in April of last year, and his original indictment bears the same case number as the Black Friday indictments.
Second is FTP’s extremely large deposit shortfall, in which Full Tilt Poker credited players’ accounts with deposits that had not been debited from their bank accounts. The statement says, “during late 2010 and early 2011, Full Tilt Poker experienced unprecedented issues with some of its third-party processors that greatly contributed to its financial problems.” Though this clearly refers to the shortfall, it provides an incorrect timeline. The shortfall actually began in August of 2010 and continued with no attempts to recover any funds until early 2011. It also blames the problem on payment processors, ignoring the fact that Full Tilt deliberately chose to allow players to deposit without a payment processor available, and allowed this to continue happening as the shortfall continued to grow. Subject: Poker reported recently that the uncollected portion of the shortfall is currently $128 million. The statement does correctly point out that Full Tilt was in the process of collecting this money when the DOJ put a stop to such actions on April 15th. However, statements from FTP employees who worked to recover these funds suggest that such attempts were extremely time consuming and often unsuccessful.
Sources close to Full Tilt tell Subject: Poker that the poker site is planning similar statements to be released in the near future. Our sources say that the next two statements will discuss the deposit shortfall and the DOJ seizures respectively.
Correction 9/20/2011 9:24 PM
We originally report that the $115 million figure included funds seized on April 15th. We no longer believe this to be correct, although we are still actively researching the topic.
Subject: Poker sincerely regrets this mistake, and we apologize for any confusion.
Edited on 8/31/2011 12:58 AM EDT: Fixed a minor typo.
Edited on 8/31/2011 11:36 AM EDT: Removed a misleading statement about investor involvement since June 29th.