Opinion: A Glimpse of Hope for UB/AP Players
By Matt Kaufman, Rakeback.com Poker News Editor
A year ago at this time, all three poker sites that were indicted on Black Friday – PokerStars, Full Tilt Poker, and UB/Absolute Poker (UB/AP) – were essentially in the same situation in the eyes of the public. They had been indicted by the United States, they owed significant sums of money to their players, and many people believed all 3 sites would fulfill their obligations to players and pay them their funds.
On April 28th, PokerStars paid all American customers their account balances in full, and continued to operate normally elsewhere. Nearly everyone expected Full Tilt to follow shortly afterwards, and many began to question what was going on with UB/AP – they hadn’t even stopped their operations in the US yet.
In the following months, Full Tilt’s financial issues became well-known, and it was discovered that the company needed an investor to step in and take over. The poker world believed that investor was Groupe Bernard Tapie, although on Tuesday that deal fell through.
Alongside the Tapie group’s deal falling apart, rumors that would have seemed totally outlandish several months ago surfaced – perhaps PokerStars would purchase Full Tilt Poker.
The details of the possible purchase vary from source to source, but at least 2 noteworthy details have remained consistent. 1 – that all players will receive full refunds of their account balances, and 2 – that PokerStars will be paying an enormous amount of money for Full Tilt.
That enormous amount has widely been reported as $750 million. That is a massive $420 million higher than the $330 million in total player liabilities that Full Tilt owes its account holders. Why would PokerStars do this? The answer is simple – they’re willing to grossly overpay for assets from the DOJ in return for considerations on their own legal matters.
Don’t be surprised if the DOJ significantly lessens, or even drops, the charges against the company – civil AND criminal. The DOJ isn’t in the business of making deals with indicted individuals or companies. They probably need to significantly downgrade the charges against PokerStars even just to save face when dealing with them.
Where does UB/Absolute Poker fit in?
Consider this question – can the DOJ really pocket over $400 million from PokerStars (the excess money from a Full Tilt purchase after Full Tilt players are paid) while leaving a small minority of US poker players unpaid? The answer is probably ‘yes,’ but will they? Perhaps not.
If Full Tilt account holders are all made whole, an overwhelming majority of American citizens who held accounts at the 3 indicted sites will have been paid. PokerStars and Full Tilt players made up the large majority of owed accounts, and just UB/AP players would remain unpaid.
It was reported some months ago that player liabilities between UB and Absolute totaled roughly $50 million. That is, of course, no small amount – but it’s not a huge amount relative to the $400+ million that the DOJ can potentially pocket in a PokerStars takeover of Full Tilt.
The mainstream media will no doubt see these numbers. Does the DOJ really want to be seen keeping so much money that they could pay all remaining unpaid players in full 8 times? Does US prosecutor Preet Bharara want to take credit for getting almost all player funds returned? I imagine not – the headlines look quite a bit better if Mr. Bharara gets everyone paid while also putting some bad guys in jail.
All of this leads me to one conclusion – it is quite possible that the DOJ will make significant efforts to get UB/AP players paid. They may even already have a simple way to get that done.
If the DOJ brokers a successful Full Tilt deal, one would imagine they have to at least make some effort to do the same for UB/AP. On the flip side, though, it’s quite a bit easier to simply use some of that PokerStars cash to fund the additional refunds. That solution on its own presents a problem, however – now the DOJ is stuck with a claim on UB/AP assets and no one to sell them to.
Where could those UB/AP assets possibly go? Well, what about that sale of Full Tilt’s assets to PokerStars? On Twitter and on poker forums some people have joked about this possibility, but I don’t see it as a ridiculous solution. If the DOJ wants to use some of the Full Tilt proceeds to pay UB/AP players and simultaneously wants to get rid of UB/AP assets, why wouldn’t they just stick those assets to PokerStars as well?
In a bizarre way, that would even work out in PokerStars’ favor. Sure, they might not want to own UB/AP, but doing the DOJ another favor will certainly help a United States Judge accept a favorable plea deal for the PokerStars execs. On top of that, it’s another piece of viable software that can’t be shopped around the industry to competitors.
Keep in mind that everything I just said is conjecture, and the odds of this actually happening are probably incredibly slim. That said, it’s not THAT crazy, right?