Posted - 04/25/2012 : 07:30:17 AM
| PokerStars In Talks To Buy Full Tilt Poker
PokerStars is in negotiations to acquire Full Tilt Poker in a deal that would end the two online poker companies' legal battles with the U.S. Justice Department, according to a person familiar with the matter.
Under the deal being discussed, PokerStars would acquire the assets of its smaller rival, according to the person. The deal would be part of a broader settlement of a civil case brought by the DOJ against the two companies, the person said. The DOJ shut down the U.S. web sites of Full Tilt Poker and PokerStars last year as part of a crackdown of online poker sites.
It's unclear how much PokerStars would pay for Full Tilt or what assets it would obtain. While tarnished by the government's allegations against it, Full Tilt retains one of the best-known brand names in online poker, a status built in part through its extensive television advertising. The company is also known for its software used to run online poker games and has a database of poker-playing customers.
The deal would include a way for poker players worldwide to retrieve funds they had deposited with Full Tilt Poker, the person said. Around $300 million was credited to poker players and not paid by Full Tilt, about half of that to players based in the U.S.
PokerStars executives have been conducting due diligence at Full Tilt's Dublin, Ireland, offices for the last few days, according to the person.
"Full Tilt Poker is more optimistic than ever that its number one goal will be obtained: Full Tilt players will be repaid," the company said in a statement Tuesday. "Full Tilt Poker has been in settlement discussions with the U.S. Department of Justice. As such settlement discussions are always confidential, we are unable to comment on any rumors related to the details of those discussions."
The Justice Department had no comment. In a statement on PokerStars's blog, a company spokesman wrote that the company couldn't comment on confidential settlement talks with the DOJ.
PokerStars and Full Tilt Poker were both shut down a year ago in the U.S. after the Justice Department brought civil charges against the companies and criminal charges against its executives, alleging the companies had engaged in bank fraud, money laundering and illegal gambling operations.
Full Tilt and PokerStars have denied the allegations.
The deal would likely not affect criminal charges pending against the Full Tilt Poker and PokerStars executives not in the U.S., according to the person with knowledge of the matter.
PokerStars and Full Tilt were once fierce rivals. They both spent vast sums marketing online poker to U.S. players on major television networks despite the government's contention that online poker is illegal in the U.S. The companies had asserted that online poker is legal.
PokerStars, which is based in the Isle of Man, was the larger of the two online poker companies and continued to operate outside the U.S. after its U.S. web site was shut down last year.
Full Tilt was forced by regulators to stop its worldwide operations last June after it was unable to pay back money it owed to players.
The U.S. online poker market has vastly decreased since those web sites were shut down in the U.S., according to groups that track online poker play.
Last year, in a court filing related to the civil suit, the U.S. government alleged that Full Tilt's owners had engaged in a "Ponzi scheme," taking money from players while paying themselves $444 million dollars from the company's coffers.
When the DOJ shut down the site to U.S. players, thousands of poker players were left with money credited to personal accounts that Full Tilt didn't have funds to support. PokerStars paid all of its U.S. players back.
Full Tilt has denied that it engaged in a Ponzi scheme but acknowledged it had severe financial problems.
In October a French investment fund -- Groupe Bernard Tapie -- said that it was close to reaching a deal to acquire Full Tilt Poker.
Behnam Dayanim, an attorney for Groupe Bernard Tapie, said Tuesday that the investment fund's $80 million deal to acquire Full Tilt fell through last week due to complications over the terms for paying back poker players and legal complications.
The Full Tilt statement Tuesday confirmed that the deal with Groupe Bernard Tapie had fallen through.
By ALEXANDRA BERZON
Back to the main page of The Casino Watch Dog