After a three-month-long suspension, the Alderney Gambling Control Commission has revoked the licenses of three of Full Tilt Poker’s four Alderney licensed companies.1 In a detailed notice, the AGCC provided its rationale for taking these actions.
The notice outlines many alleged violations of AGCC regulations by the three former licensees and one current licensee, and concludes that some or all of them were guilty of seven such violations on a balance of probabilities:
- No longer financially fit and proper- Vantage, Filco, and Oxalic
- Association with Kolyma Corporation AVV, which is no longer fit and proper- All
- Failure to notify the AGCC of the “serious incidents” of DOJ seizures and frozen accounts- Vantage and Filco
- Failure to repay customers upon request- Vantage
- Failure to ensure sufficient funds- Vantage, Filco, and Oxalic
- Loans to players2- Vantage
- Inaccurate or falsified accounting records- Vantage, Filco, Oxalic
The AGCC’s notice stresses both Full Tilt’s insolvency and its alleged false communications with the commission. Indeed the report details numerous false statements allegedly made by FTP to the AGCC, including assurances that the company did not loan money to players and accounting documents that included money loaned to players as part of the shortfall, money seized by the United States Department of Justice, and money frozen by banks as liquid assets in blatant violation of Generally Accepted Accounting Priniciples.
It is not immediately clear how this revocation will affect ongoing negotiations between Full Tilt Poker and an interested group of French prospective investors or any potential negotiations with other interested buyers. AGCC licenses are not meant to be transferable, but numerous sources close to the matter have suggested to Subject: Poker that the AGCC might have been willing to skip some of the application process with a potential new owner of FTP if Full Tilt still held its licenses with Alderney. As a result, the French prospective investors reportedly did not want those licenses revoked.
Indeed, Jeff Ifrah, a lawyer associated with Full Tilt, recently asked the Two Plus Two community to send e-mails to the AGCC asking them not to suspend Full Tilt’s license. Ifrah explained in part, “A negative AGCC ruling will cause all efforts that have been undertaken to secure this investor group to fail and leave customers in the cold.” However, the AGCC said in its press statement “It is important to note that the revocation of FTP’s licences does not, as has been suggested, prevent a reactivation of the business under new ownership and management”
It is also unclear how the AGCC’s decision not to revoke the license of FTP company Orinic Limited will affect Full Tilt’s future. Orinic has only a Category 1 license, which does not allow it to effect gambling transactions. Its license was suspended for six months and not revoked because it had reportedly not accepted funds from customers, although the AGCC does allege that “there is a small surplus of liabilities over assets.”
Alderney claims repeatedly in its notice that Full Tilt failed to put up much of a defense in the hearing after its requests for a delay were dismissed. For example:
Upon hearing that FTP’s application for a further adjournment had been rejected by the Commissioners, FTP notified the Commissioners on the 21st September 2011 that neither it nor its legal advisors would take part in the regulatory hearing. In the absence of FTP’s presence at the regulatory hearing, the Commissioners have treated each of the allegations as being challenged by FTP and have therefore proceeded on the basis of a contested regulatory hearing.
The notice also includes the following surprising statement:
Document JS21(I) illustrates the individual seizures made by the Department of Justice during the period 28th June 2007 to 20th June 2011, which amount to a cumulative total of approximately $331 million US Dollars. According to the evidence before it, document JS21(I) was produced by the Executive from information supplied by FTP during the course of the examination of their financial position by Dixon Wilson.
This number is quite surprising because it is much larger than the $115 million that Full Tilt said had been seized by the DOJ over the two years prior to April 15, 2011 in a recent press statement. It is possible that this discrepancy is a result of the difference between total moneys seized by the DOJ in all seizures in which Full Tilt was affected and the amount that was seized that belonged to Full Tilt or that it is simply a mistake. It is also possible that the Department of Justice seized a very large amount from Full Tilt on April 15th, but this amount would have to be much larger than any of the amounts claimed by Subject: Poker‘s various sources and much larger than the $60 million that the DOJ said Full Tilt had in bank accounts on March 31st. Another possibility is that the Department of Justice seized large amounts of money from Full Tilt before summer of 2009, but Subject: Poker is unaware of any large seizure prior to June 2009. Subject: Poker has reached out to Alderney for comment, but they have not responded.
The Alderney Gambling Control Commissions’s decision comes after a long and complicated process. Prior to its suspension of Full Tilt’s licenses on June 29th, the commission released numerous statements suggesting that it had “no reason to believe that player fund transactions are fundamentally threatened by any consequence of the US authorities’ actions.” In mid June, Subject: Poker learned that Alderney had threatened FTP with license suspension, and on June 29th it did so. It then held a hearing on July 27th, which was scheduled to be public, but quickly became private after the request of Full Tilt Poker’s lawyers. That hearing was followed by a statement saying that the hearing had been adjourned until no later than September 15th. The hearing did not actually reconvene until September 19th and was scheduled to last only two or three days. However, the commission did not reach a decision until today, ten days later.
Subject: Poker will continue to follow the Full Tilt Poker situation as it develops.
- The three revoked licenses belong to Vantage Limited, Filco Limited, and Oxalic Limited. Orinic Limited, a relatively new Full Tilt Poker company that has reportedly not yet served any customers, has kept its license but received a six month suspension. ↩
- This refers to the $128 million shortfall and not to Full Tilt’s practice of loaning money to sponsored pros. ↩