posted on July 31, 2012 15:39
PokerStars buys Full Tilt Poker
The world's biggest online poker company, PokerStars,, has agreed to pay $731 million to settle the U.S. government’s civil charges that the company used fraudulent methods to process payments and evade U.S. restrictions on Internet gambling.
Under the agreement, PokerStars, which is based in the Isle of Man, will also purchase Full Tilt Poker, a former rival which collapsed following the U.S. government’s move in April 2011 to shut down the U.S. operations of the major online poker operators. The deal calls for PokerStars to forfeit $547 million to the U.S. government and make $184 million available to reimburse non-U.S. customers of Full Tilt within 90 days that had money on deposit at the company.
The deal will end the saga of Full Tilt Poker, a company built by Ray Bitar with the help of poker champions Chris “Jesus” Ferguson and Howard Lederer that Preet Bharara, the U.S. Attorney in Manhattan, has repeatedly said was a Ponzi scheme.
Bharara’s crackdown on the online poker industry continues, including against Isai Scheinberg, the founder of PokerStars, who has been indicted by Bharara for operating an illegal gambling business. Bitar, who recently returned to the U.S. from Ireland to face the criminal charges Bharara has filed against him, pleaded not guilty and is currently out on bail. Scheinberg is believed to be in the Isle of Man.
U.S. players who had money on deposit at Full Tilt when the company collapsed will have to apply to the Department of Justice to get reimbursed.
While giving up $731 million will hurt, PokerStars can now continue to dominate the international online poker market without the complexity of dealing with a massive civil forfeiture complaint filed against it by the U.S. government. PokerStars will not have to worry about competition from its longtime rival, Full Tilt, and its standing in the online poker community, which was already strong given that it paid all of its customers back and continued operating outside the U.S. after April 2011, will only be helped because it will be seen as coming to the financial rescue of the online poker community.
In a statement, PokerStars says that under its agreement with the Department of Justice, the company will not admit to any wrongdoing. PokerStars also said “the agreement explicitly permits PokerStars to apply to relevant U.S. gaming authorities, under both PokerStars and Full Tilt Poker brands, to offer real money online poker when State or Federal governments introduce a framework to regulate such activity.”