Full Tilt / GBT deal isn't running as smoothly as some hope. Image from KickAssPoker.com
Last week’s disclosure of millions of dollars of un-repaid loans from Full Tilt Poker to several high-stakes poker stars has put a damper on public perception of French suitor Groupe Bernard Tapie’s possible acquisition of the Full Tilt business assets from the Department of Justice. It’s been enough of a deal-bender to throw the whole industry into a bit of spin, with new information and several negative viewpoints by industry watchers suggesting that the deal has a better-than-ever chance of falling through, compared to slam-dunk status it enjoyed just a week or two ago.
Since that’s a splash of cold water in the faces of former Full Tilt players worldwide, it’s time to catch up on the latest. Two pieces of note are an interview given to iGaming France by GBT boss Bernard Tapie and an update on the general feel of the deal at the moment, as offered by Wendeen Eolis at PPN. The iGaming France piece is important for its offering an exact count and total of the outstanding loans to pros: It’s 19 players and $16.5 million, and the six players previously outed by GBT’s lawyer — Phil Ivey, Erick Lindgren, David Benyamine, Layne Flack, Mike Matusow and Barry Greenstein — both account for the majority of the millions owed and have refused, to date, to reach an agreement with GBT regrading possible repayment. The six players seem to account for $12 or $13 million of the total with the smallest of the six amounts being the $382,000 owed by Greenstein. Two of the remaining 19 who do seem to be in active negotiations to repay are John Juanda and Tom Dwan.
Now here’s where it gets tricky. The reason the GBT folks have decided to publicly shame these pros is because the loans are listed on the Full Tilt books as assets, and they’re in the midst of negotiating a bulk asset-purchase deal from the DOJ. What this means is that if the deal with the DOJ goes through, these possibly bad loans come along with the rest of the paperwork, and it’d be up to GBT to find a way to collect on them. It is exactly the same principle as a business selling off a packet of bad debts to a third-party debt collector, and if you’ve ever been called by a debt collector, you know how aggravating that process can be, whether the debt is legit or not.
These debts do seem to be legit, and that’s the rub: Despite at least one of these players trying to curry public sympathy into his stance that the money be used to repay American players, the long and short of it is likely to be that Greenstein doesn’t have the legal right to do anything more than posture. If it’s money owed to Full Tilt, then that money should go to GBT, and that means that it’s collectively $16.5 million that’ll go to repay international players or buttress startup operations for GBT’s planned Full Tilt II.
What that $16.5 million does not and can not represent is money that’ll go back to US players.
It’s an interesting twist: If the deal goes through, international players will likely get full refunds, but US players will probably get a smallish percentage of their bankrolls returned to them. There seems to be at least a $50 million shortfall between what the DOJ has knowingly seized and what is owed to US players, and there may not be any more turnips to squeeze. Meanwhile, if the deal falls through, international players may get nothing, while US players might still get something back from that already seized into the DOJ coffers. Chances are they’ll get less than otherwise, because there won’t be an $80 million check to the DOJ from Groupe Tapie to sweeten the pot.
Get it? US players are more likely to get back a percentage of their bankrolls. International players are less likely overall, but if they do, they’ll get back all of what they were owed, rather than just part. So whether or not the GBT purchase goes through pits the bankroll interests of American players against those of the rest of the world.
Those among the 19 players who insist that they are refusing to pay for the benefit of the US players are essentially full of shit. They might have to send their money off to international coffers, but in return, some money comes from the same international coffers to jilted US players. They don’t need to pay GBT anything in advance, but they do need to enter some sort of escrow arrangement, wherein if the deal goes through, then they pay up. That’s the type of arrangement Juanda and Dwan, among others, are already generally believed to have reached with GBT.
GBT’s brass has done some posturing, too. The firm shouldn’t be looked at as a white knight, but rather a corporate scavenger whose reluctantly acknowledged presence might result in stranded players getting back something… which is better than the almost nothing they’d get back otherwise. GBT, though, is squeezing and manipulating the situation for all its worth. The $80 million deal seems to be the DOJ’s bottom-line offer, and GBT’s public shaming of the greedy pros may well be a Plan B after attempts to negotiate those player debts down to something like 50 cents on the dollar went nowhere. Is the situation a deal killer? Not yet, as Eolis correctly asserts. But somewhere in that $15 million gap lies the expected margin that GBT projects it’ll need before taking on the project. And you know what? There isn’t anyone else lining up to buy Full Tilt’s assets.
