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Summary Judgment Likely in California UltimateBet Civil Suit, Collectibility Separate Issue

California

There'll likely be a summary judgement in CA for the UB

Remember the California civil lawsuit filed this past January by poker-playing attorney Alan “Bodog Ari” Engle, representing eight former high-stakes UltimateBet players? That action drew a bit of media attention early on, but not much since, and an impasse likely has the whole matter headed for a summary judgment. That judgment, however, is the easy part; the prospects of the players actually collecting any dollars are much dimmer, in part due to the jurisdictional conflict that caused the case to be filed in California in the first place.

Your faithful scribe has recently uncovered Canadian court documents and correspondence connected to the case, which in turn brings up a bit of unearthed news from a couple of years back: Engle assembled a similar group of players in 2009, threatening a California action at that point against Joe Tokwiro Norton and his Tokwiro Enterprises operations, which at that time was the titular face of the Cereus Network.

The 2009 version of the civil action, had it ever been brought, would have featured this eight-player lineup of plaintiffs: Daniel Ashman, Martin Bradstreet, Eric Crain, Thomas Koral, Greg Lavery, Daniel Smith, Cole South and Dustin Woolf. That preemptive lawsuit would have named the following as defendants: UltimateBet.com, Tokwiro Enterprises ENRG, Blast-Off LTD, Excapsa Software Inc. (aka 6356095 Canada Inc, the company’s name in the liquidation process), Game Theory Holdings LTD, EWorld Holdings LTD, Iovation Inc., Russ Hamilton, Greg Pierson, Mansour Matloubi, Joseph Tokwiro Norton, and “John Doe” defendants 1-50.

That lawsuit never happened, allegedly to the group’s inability to find a Canadian lawyer willing to take the case on a contingency basis.  According to court filings, Norton even flew Engle and several of the original eight players to Montreal to try resolve the matter, to no avail.

By the time an action was finally filed in early 2012, Bradstreet, Crain and South had pulled out of the process, to be replaced by three other high-stakes UB players: Brad Booth, Dave Lizmi and Joseph Sanders. When filed in California, the action named only the Canadian liquidation trust 6356095 Canada Inc. and John Does 1-50 as defendants. All other individual and corporate entities had been dropped.

How the 2009 legal threat morphed into the 2012 action is a separate story, told in part by some of the correspondence contained within the recent liquidation documents. Though the 2009 action never came to fruition, the prospect of such a legal threat had to be worrisome to those involved in Excapsa’s liquidation process. At some point Joe Norton forwarded both Engle’s October 6, 2009 letter and an accompanying 41-page unfiled complaint to court-appointed liquidator Sheldon Krakower and/or John N. Birch of the Canadian law firm of Cassels Brock & Cantwell LLP, who was also involved in the liquidation process.

Krakower was far from an independent liquidator, having been brought in as replacement when the first liquidator, part of an accounting firm that merged into Deloitte & Touche, raised objections over roughly $30 million in liquid assets held in Britain that Excapsa’s owners wanted to distribute. So that liquidator was dumped and replaced with Krakower, a business associate of Excapsa’s then-CEO James Ryan. The objections quickly disappeared.

As to the Engle lawsuit, he and an East Coast attorney named Peter Collery, who had raised other objections over the liquidation while representing a late-arriving Excapsa investor, found themselves duly added to the service list when Excapsa published its second claims bar notice last November. That’s the little legal notice that appeared in the Wall Street Journal and elsewhere that we published last time out.

The purpose of this second claims bar process was to extinguish any ongoing claims against remaining Excapsa’s interests, and it presented an obstacle to Engle.  While Engle’s player group had good cause to argue that the first claims bar process, filed back in 2007, was illegitimate for several reasons, this second one could effectively shut the Canadian door to player claims against the liquidation process, and it would go into effect on Jan. 13, 2012.

On Jan. 10, Engle sent a testy demand to Birch, the lawyer at Cassels Brock, asserting uncompensated losses of at least $2 million, but asking for a $150,000 cash settlement for his clients in exchange for not pursuing the case.  Engle had quickly revised the planned California complaint from 2009, adding some new material, though large swaths of information were copied verbatim from the 2009 to the 2012 edition.  The following passages seem to have raised the ire of Birch and Krakower, who interpreted the threat as a bald grab for cash:

The current offer is in no way intended to make our clients whole or compensate them for their loss.  Rather, it is simply intended to enable them to gain a small measure of satisfaction through a viable compromise that does not impede the orderly liquidation of 6356095 Canada Inc. and require the sort of complex litigation that would result from filing the complaint.  Such litigation would tie up some or all of 6356095 Canada’s extensive reserves to pay for counsel and as a set aside to satisfy any judgment (filling the coffers of US litigation counsel at the expense of shareholders), delay conclusion of the liquidation process, complicate procurement of insurance policies, etc.  Such litigation would also require the application of significant resources by our firm and its clients in this matter over an extended period of time and would delay and potentially even imperil the possibility that are clients receive any compensation.

Please do not take this admission of potential difficulties as an opportunity to bargain over settlement.  A number of our clients would be happy to proceed with litigation instead of taking their share of a de minimus $150,000 CDN settlement (approximately equal to the average monthly professional fees paid by 6356095 Canada in 2011), if only to resolve open questions about the cheating at UltimateBet.com.  The $150,000 offer to settle eight individual claims is obviously tied to the amount you, as Liquidator, are authorized to settle for without Court approval.  It is intended to be easy to accept, because litigating these claims will significantly delay the liquidation and delay the ultimate payment of claimants and shareholders.

Also included was a “Full and Final Release,” which if accepted would have prevented any of the parties from publicizing the terms of the settlement: Releasors further agree not to make public the Draft Complaint of the terms of this Confidential Settlement Agreement, except as required by a court or similar legal authority of competent jurisdiction.

Except that the liquidation process had been rigged all along, with most of the assets long since dispersed.  In lame poker-metaphor terms, Birch and Krakower decided to call Engle’s bluff, which eventually included publishing, in a February liquidation-court update, all the relevant correspondence that could be obtained.  That material also included both of Engle’s 2009 and 2012 draft complaints.

Birch fired back regarding Engle’s e-mail in a terse Jan. 11 response.  In its entirety:

We are writing on behalf of XMT Liquidations Inc., the liquidator of Excapsa.  I previously wrote to you on November 18, 2011 regarding the claim bar process established by the Ontario Superior Court of Justice (the “Claims Bar Process”) which established a deadline of January 13, 2012 for the filing of claims (the “Claims Deadline”).  I am responding to your e-mail message of January 10, 2012.

It appears that you are unaware of certain aspects of the court-supervised liquidation of Excapsa.

First, pursuant to the Amended and Restated Liquidation Order of Madam Justice Mesbur dated November 30, 2006, all claimants (including your clients) are restrained from commencing liquidation against Excapsa without obtaining prior approval of the Ontario Superior Court of Justice on at least seven days’ notice.  I attach a copy of that order and refer you to paragraphs 38 and 39 thereof.

Second, you should also be aware that the Liquidator previously ran a claims bar process back in 2006 and 2007, which included the publication of notices in Canadian, American, British and Maltese newspapers.  Your clients’ claims may already be barred by that earlier claims bar process.

Third, to the extent that the claims are not already barred, the current Claims Bar Process is the only process which is authorized for the submission and determination of claims against Excapsa.  The liquidation order does not permit piecemeal litigation in other jurisdictions.

What that means is that the Liquidator does not recognize the legitimacy of the litigation that you propose to commence in Los Angeles.  If your clients wish to assert a claim, they must follow the procedures for the Claims Bar Process and submit a claim in writing to the Liquidator by the Claims Deadline.  Such claim will be adjudicated by the Ontario Superior Court of Justice in accordance with procedures that such court establishes.  If they do not submit a proof of claim by that time, such claim will be barred.

It is clear that the Ontario Superior Court of Justice is the proper court having jurisdiction over Excapsa and the liquidation in view of the location of Excapsa’s headquarters as well as the fact that Excapsa is governed by the Canada Business Corporation Act, a federal Canadian statute.  In the event that your clients choose to ignore the Ontario orders and commence proceedings in California, we have no reservations about having the Ontario orders enforced in your jurisdiction, obtaining a stay of the California action, and seeking an order for contempt.  I know from past experience that American courts have no hesitation in enforcing Canadian court orders in accordance with the principle of comity.

I also note that your proposed complaint alleges certain conduct by Excapsa as late as 2008.  You should know that Excapsa has not carried on any business since November 2006 and, in fact, sold its business assets and domain names prior to that time.  Since 2006, the Liquidator has merely been administering an inactive estate.

In closing, I again invite your clients to submit a proof of claim to the Liquidator if, in fact, they wish to assert claims.

Yours truly,

John N. Birch

Engle’s response was to go ahead and file the California action, after sending a Jan. 18. letter questioning the liquidator’s claims of jurisdiction, while those same Canadian liquidators gave it a few days’ thought and decided to take no direct action in the California proceedings, but instead successfully moved to have the players and Engle barred from taking Canadian action.  This move essentially allows a summary judgment to be declared in the California suit, but raises questions as to whether Krakower or Birch can be forced to comply with procedures designed to enforce a California judgment or divulge further information as to the real identities of people or businesses involved in the Excapsa mess.

The following passages from liquidator Krakower’s February 1, 2012 Seventh Report to the Court sum up the situation from Excapsa’s perspective:

(c) for greater certainty, an order asserting that the Claims asserted by Daniel Ashman, Brad Booth, Thomas Koral, Greg Lavery, Dave Lizmi, Daniel Smith, Joseph Sanders and Dustin Woolf (the “Engle Clients”), including without limitation those referred to in the United States District Court for the Central District of California Case #CV12-0342 DSF (JCx), (collectively, the “Engle Client Claims”) are hereby extinguished and barred to the extent that such claims are asserted against Excapsa Parties;

(d) an order that XMT Liquidations Inc. in its capacity as the liquidator of Excapsa (the “Liquidator”) shall take no action in response to the action commenced by the Engle Clients in the United States District Court for the Central District of California (the “US Court”) bearing Case No. CV12-0342 DSF (JCx) ( the “Engle Client Action”);

(e) an order permitting the Indemnification Fund [] to be released and all funds held in respect of the Indemnification Fund to be distributed to the shareholders of Excapsa;…

The report went on to detail the interactions with the Engle group, noting the swapping of e-mails and stating, “The Engle Clients failed to file any proof of claim in the Second Claims Bar Process, whether before or after the Claims Bar Deadline.”  Elsewhere, in the complete January 19th, 2012 Seventh Report, liquidator Krakower asserted that “… Engle’s clients intentionally failed to comply with the Claims Process in violation of this Court’s stay of proceedings against Excapsa and therefore their claims should be barred.”

Despite the firmness of the legal barrier thus erected and its deterrent impact on the Engle group’s suit, there’s still plenty of evidence on Engle’s side.  The first Claims Bar Process, cited extensively in Krakower’s report, could be effectively rendered moot by the fact that the online cheating at UB wasn’t even discovered until months after the first series of notices were published.  Fraud would generally not be shielded by such action, despite Birch’s e-mailed assertion that the claims of Engle’s clients might already have expired, and that the original November 30, 2006 claims bar notification effectively indemnified Excapsa against such claims.

Krakower subsequently acknowledged the $14.625 million paid to Blast-Off as compensation for its unspecified role in the cheating scandal, though the exact amounts determined to be cheated were redacted from published court documents and no independent third-party audit of the calculations by which the cheating figures were derived was never performed.  Krakower also reasserted jurisdictional claims owing to the existence of Excapsa’s Toronto office, even though that office was little more than a secretary and a dropbox, and the entire Canadian incorporation concept was created just to shield the company from America’s legal reach.  Much evidence exists, including items once published by Krakower himself, showing that UltimateBet was really run out of Portland, Oregon.

Several of Krakower’s claims are provably false, but without anyone in court to oppose the process, the ongoing liquidation motions passed without challenge.  The unchallenged movement of the Canadian liquidation means that the California summary judgment is likely to occur, but with few options for Engle’s side but to return to a Canadian court in some manner in an attempt to make Excapsa and its liquidators comply with the terms of such a judgment.

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The Excapsa Claims Bar Processes

The Excapsa Claims Bar Processes

Here’s a little tidbit that I could probably share over on my personal blog, but I’ll post it here for the extra traffic. Pictured below is the second “claims bar process” notice published in the liquidation of Excapsa, the original parent compant of UltimateBet.

Yes, the second one. The first one was published back in 2007, not too long after the sale of UB to Absolute Poker was finalized. The whole matter is rather curious, and relates to an update on the civil lawsuit brought by California poker player / attorney Alan Engle and eight high-stakes UB players, which we’ll go into in excruciating detail next time out. There have been developments.

For now, though, here’s the notice that appeared in the Wall Street Journal last November, one of four which appeared in countries of importance to UltimateBet’s operations. The notices were legal, but other than being sent to the shareholders of the companies involved with Excapsa’s liquidation, were well hidden from the public, buried without undo attention among hundreds of similar official notices in four papers. Similar notices appeared in Canada’s Globe and Mail, England’s The Times of London, and Malta’s The Times of Malta. Here’s how the WSJ notice looked:

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The Big Muddy, Part 2: Fine Print in New Jersey Legislative Pact Emperils PokerStars Deal

Pokerstars

Pokerstars deal is getting real muddy, real fast.

Need more proof that the much-ballyhooed handshake agreement between PokerStars and the Department of Justice is poised on shaky ground?  For that we need look no further than the latest updates to the much-debated New Jersey online-gambling bill.  This bill currently exists in two versions, but it’s the state Assembly version (A2578) where much of the recent action takes place.

Chris Krafcik (@ckrafcik), a poker-business writer who does some work for Gambling Compliance, has been able to attend some of the New Jersey hearings and has had access to the office of NJ State Sen. Ray Lezniak (D-Elizabeth); Lezniak, in turn, has been one of the leading proponents of the push to legalize online gambling in that state.  Krafcik’s also published links to original and amended copies of the Assembly version of the bill, which has undergone extensive revision of late.  “14 amendments!” Tweeted Krafcik last week.  (I think it was actually more.)

In its first major published revision, the Assembly version of this bill expanded from 30 to 38 main sections, offering a lot of new technical provisions and the occasional land change or two to the concept.  And a sharp-eyed, long-suffering poker blogger, “CrAAkker,” (his real names is Michael, in case you were wondering) noticed that one of the amended insertions, accepted and incorporated into the bill, is actually a poison pill aimed directly at offshore operators such as PokerStars or Full Tilt.  And even though this bill is a long way from becoming law, that’s bad news, no matter how it’s presented.

You really should go visit CrAAkker’s excellent post on the topic, because he’s the one who found the new language and deserves credit for publishing it.

Here’s the complete text of the new Section 37, with the important points bold-faced for your reading pleasure:

137.  (New section) a.  Notwithstanding any other provision of P.L.   , c.   (C.   ) (pending before the Legislature as this bill) to the contrary, a corporation or any person seeking to provide goods or services to a casino licensee in connection with Internet gaming shall not be awarded a casino service industry enterprise license, and shall not be permitted to conduct business with a casino, in connection with Internet gaming if that corporation or person:

    (1)  has at any time, either directly, or through another corporation or person it owned in whole or in significant part, or controlled:

   (a) knowingly and willfully offered, accepted, or made available bets, wagers, or stakes using the Internet from persons located in the United States after December 31, 2006, unless such activity is licensed by a federal or State authority to engage in such activity; or

   (b)  knowingly facilitated or otherwise provided services with respect to bets, wagers, or stakes using the Internet from persons located in the United States for a person described in paragraph (1) of this subsection and acted with knowledge of the fact that such bets, wagers or stakes involved persons located in the United States;

   (2)  purchased or acquired, directly or indirectly, in whole or in significant part, a corporation or person described in subsection b. of this section, or covered assets of such a person, and will use that corporation or person or those assets in connection with the services provided to a casino licensee with respect to Internet gaming.  A casino licensee shall not be permitted to use, directly or indirectly, covered assets in connection with Internet gaming involving corporations or persons located in this State.

   b.  As used in this section:

 (1) “significant part”means, with respect to ownership of a corporation or person, the ownership of 5% or more of that corporation or person’s assets, or any percentage of ownership which provides control over that corporation or person;

   (2) “covered assets” means any asset specifically designed for use and used in connection with bets, wagers, or stakes using the Internet from persons located in the United States after December 31, 2006, unless licensed by a federal or State authority to engage in such activity, including the following:

   (a) any trademark, trade name, service mark, or similar intellectual property that was used to identify any aspect of the Internet website or of the operator offering the bets, wagers, or stakes to its patrons;

   (b)  any database of customer information or customer list of individuals residing in the United States who placed bets, wagers, or stakes in or through an Internet website or operator not licensed by a federal or State authority to engage in such activity;

    (c) any derivative of a database or customer list described under (b) above; and

   (d) software and hardware related to the management, administration, development, testing, or control of the Internet website or operator.

  c.  A corporation or any person seeking to provide goods or services to a casino licensee in connection with Internet gaming which would be prohibited from doing so under this section may request a waiver of the prohibition only in accordance with the provisions of this subsection, as follows.

    (1)  The commission shall determine by a preponderance of the evidence whether the corporation or person that is the subject of review violated, whether directly or indirectly, any State or federal laws then in effect in connection with the operation of or provision of services to an Internet gaming website that made available bets or wagers to persons located in the United States after December 31, 2006, or whether the assets to be used or that are being used by such person were used in connection with Internet gaming that violated such federal or State laws after that date.  The casino service industry enterprise shall bear the burden of proof in establishing clearly and convincingly that its conduct in connection with bets or wagers involving persons located in the United States was not unlawful.

  (2)  The determination of the commission shall be made without regard for whether the corporation or person has been prosecuted under the criminal laws of any State, the United States or other jurisdiction or has been prosecuted and terminated in a manner other than with a conviction. 

  (3)  In making such determination, the commission shall afford the subject of the review an opportunity for a hearing at which evidence may be presented.  An authorized official of the commission shall preside over the hearing and shall act as a finder of fact entitled to evaluate the credibility of the witnesses and persuasiveness of the evidence, and those findings of fact shall be subject to judicial review only for abuse of discretion.1 

The upshot is that whoever designed this clause plans to hopes Stars, Tilt, and any other entities that directly supported those and other US-facing sites from 2007, onward from doing business in New Jersey.  But who, exactly is responsible, and why the selection of December 31, 2006 as a cutoff date, when the UIGEA was signed into law nearly 90 days earlier?

The first thing to do is look at the bill’s potential enemies, and in New Jersey that’s basically the state’s pari-mutuel [horseracing] operations.  Still, we can rule them out in this instance, as they’ve been excluded from this bill, which is very casino- and Atlantic City-centric.  The horse boys want to see the current versions of this bill tossed on the trash heap.

Nope, this is a casino-driven play.  But which one, or all?

There are three big casino players in Atlantic City: Caesars, which owns several properties; the Donald Trump-less Trump Entertainment; and the Borgata, which used to be a 50/50 split between Boyd Gaming and MGM but is mostly Boyd these days, after MGM was ordered to divest in 2009 due to its heavy Macau investment.  There are a couple of small players, but that’s really the big three in AC.

Two of three are known to have deals in the works with former online entities.  Caesars did negotiate with 888 Holdings/Cassava/Pacific and had reached a tentative agreement with them for online services prior to the Black Friday crackdown.  Everything is officially on hold there, and 888 may still have to do some renegotiating with the feds, but the tentative business relationship still exists.  Both MGM and Boyd over at the Borgata had reached separate deals to buy into a bwin.party operation, and even with MGM out of the Atlantic City picture, the Boyd/bwin.party arrangement still holds.  If Trump Entertainment is working on a deal — and they likely are — it’s still well hidden.

Therefore, 888 and Party, both already also on the Nevada list of service applicants — and, in Party’s case, already in a deal in California as well — have a pipeline into this New Jersey legislative process.

Here’s the finer question: Why the choice of 12/31/06 as a cutoff date in the poison pill, when 10/31/06, two months earlier, would have been more legally accurate?  President George W. Bush signed the UIGEA into law on October 13, 2006, and both Party and 888, both of which had serviced the US market, departed the States in October.

The secret may well be bwin.party’s co-CEO, James Ryan, who didn’t even arrive at Party until the middle of 2008.  Prior to that, throughout 2006, Ryan served in a similar role at Excapsa, the parent company of UltimateBet.  Ryan was brought on to help position Excapsa and UB for an IPO on the London Stock Exchange’s Alternative Investment Market (AIM), though he certainly did more than just that in his time at UB.

Then the UIGEA happened, and Excapsa was forced to abandon its AIM listing, though it wasn’t quite as quick as Party or 888 to exit the US.  Instead, since their market was so heavily American, they sought a way to keep UB’s US players playing and generating rake.  UB had been on the selling block in one form or another since 2004 or thereabouts, but the UIGEA forced the company’s execs to go into high gear to find a solution.

That’s how the deal with Absolute Poker finally came about.  No one knew then that both sides harbored batches of crooks and thieves.

Excapsa wanted to keep its hands clean, but its owners did not want to abandon the US, because UB players were almost entirely American.  Exact figures aren’t available, but UB may have had the highest percentage of American players of any major online poker site.  It was within this set of market conditions that the psuedo-sale to AP took place, a weirdly structured deal that officially gave control to the AP side but attempted to keep the American-player money spigot flowing for everyone involved.

The plan also called for Excapsa to officially enter liquidation proceedings in Canada, another sham of a process that included getting rid of the first liquidator (who protested Excapsa’s plans for distributing something like $30 million that was being held in a British trust), and replacing that liquidator with Sheldon Krakower, who just happened to be one of James Ryan’s business partners in some other investments.  Soon, distributing Excapsa’s liquid assets soon became less of an issue.

But all that took time.  Excapsa, with Ryan at the helm, didn’t get Canadian court approval to enter liquidation until December 22, 2006.  And that date is the last time you will find Ryan mentioned in any public documents associated with Excapsa.

When exactly did Ryan leave Excapsa?  That’s kind of a dirty, secret story, though it’s safe to say it didn’t happen until early 2007.  With Exacpa de-listed from AIM and the company officially sold, Ryan’s purpose didn’t add up to the size of his paycheck.  Records of Ryan’s exact departure have long since been buried, a part of the weird process by which Ryan finally made his jump over to Party in 2008, in which he dodged the last bit of what was reputed to be a two-year non-compete.

For James Ryan, though, there’d be no hope of making a “clean hands” claim any time prior to that December 22, 2006 liquidation date for Excapsa; Ryan was named one of the court inspectors for the process, a role he later resigned.  Because of that, a 10/31/06 cutoff date would, in all likelihood, cause James Ryan some trouble.  Imagine a scenario where bwin.party could be approved, but only if its co-CEO stepped aside.  Some lobbyists may be trying very hard to make sure that doesn’t happen.

It’s of course true that Party would also like to cripple PokerStars’ attempts to reenter the US, and Stars doesn’t seem to have a friend in New Jersey.  That’s how the cutoff date was introduced in the first place, though it’s the tweaking that’s the curiosity.  Add all that stuff together, assume that Boyd, with Party’s prompting, is helping to shape the New Jersey legislation, and all of sudden the poison pill’s cutoff date makes sense.

Now, shift over to the PokerStars perspective, and go back to CrAAkker’s post.  He is on the spot with questioning whether a state-by-state process even makes sense for PokerStars to pursue, if states like Kentucky threaten domain seizures and casinos in other states use lobbyists to insert artificial barriers in Stars’ path.  Without even considering the obvious “dead” states like Utah, Hawaii, Washington or Alabama, think of something like Virginia, with no major casinos and an established horseracing industry that just might take an idea from Kentucky’s lead.  Or perhaps a Wisconsin or Minnesota, states in which tribal casinos call the shots.  Every US state has the capability to throw something major into Stars’ path.

And all that is why the astute reader needs to be just a little bit bearish when reading rumor-filled stories about the impending DOJ/Stars deal, such as the one at iGaming Post that I linked to the last time out.  It’d be great if it happens, but don’t prepare those deposit e-checks or spend that frozen Full Tilt money just yet.  The signals remain mixed, and there’s a very real chance that the deal might yet fall apart.

 

 

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The Big Muddy, Part 1: Mixed Signals Everywhere on Possible Stars / Full Tilt / DOJ Deal

 

It's a muddy mess but someone will come out on top!

Looking for a clear indication as to when (or if) the reputed deal between PokerStars and the Department of Justice is going to come to pass?  In case you’ve been sleeping for the past few weeks, that’s the alleged settlement in which Stars is supposed to pay hundreds of millions of dollars in exchange for forgiveness of past transgressions, and in the process pick up Full Tilt’s software and mailing lists, and pay off the debts owed to Full Tilt’s American players?

The waters are murkier than ever this week, with many different things going on behind the scenes.  The emerging stories are wildly divergent, ranging from a deal being announced later this month to the possibility that the whole thing could still fall apart.  Worse, there’s some evidence supporting Stars not doing the deal, and that would be very bad news for former Full Tilt punters, who would then get much less money back, if any.

It’s a snarled mess at the moment.  Let’s try to make some sense of it.

That Stars has been in serious negotiations with the DOJ is about the only thing we can take as a given, and that some sort of approximate deal was reached also seems likely, given the abrupt departure of French distressed-investment fund Groupe Bernard Tapie from the Full Tilt equation.  In exiting, Tapie directly named Stars as the replacement suitor, this just before trying to buy off all of Full Tilt’s key programmers and start a competing site.

So Stars and the DOJ have some sort of agreement in principle.  That much seems clear.

Then come the complications, and the crazily diverging storylines.  Perhaps the weirdest popped up on CompatiblePoker.com, which throws out occasional updates on its USA Poker Updates page.  Along with a Twitter post (@USACompatible), here’s what they wrote:

May 10, 2012

- Update from a 2nd hand source about major ex-US sites:  “Heard that PStars/Tilt/UB/AP went in front of judge in New York….had all their shit sorted out…but then the District Attorney from Kentucky showed up and had their hand open asking 125 million from each site and if they don’t fork it over, they are going after domains to seize them…..“

Just a rumor, but a very believable one, and something worth keeping tabs on in our personal mental files regarding the Stars/Tilt/DOJ situation.  CompatiblePoker’s been around for a while, and while they occasional get things wrong, they’re not exactly Gambling911, which is often just a disgrace to the concept of news reporting.  I no longer work with the Compatible boys for personal reasons, but I’d rate them a 6 or 7 (out of 10) as far as being a trustworthy site.  They might get it wrong from being fed bad info, but they probably wouldn’t lie.

And this rumor, from someone who knows the Kentucky game, had the ring and feel of truth.  What’s been going on in Kentucky is a giant attempt to ring-fence the state on behalf of the state’s powerful horseracing industry, which wants Kentucky gambling to be its private property.  The whole domain-seizure thing plays into that, with the state taking advantage of an opportune moment to go after all those domains.  The state used a third-party law firm working on a contingency basis in the event that they actually collected a settlement — unlikely, that — but the purpose has always been just to clear out the competition.

Could one of those attorneys have shown up in New York with his hand out?  Sure… it happens all the time.  [Insert attorney joke here.]  Still, it’s doubtful that Kentucky could actually prevail if a case moved out of Kentucky and into federal appeals court, where the domain seizures would likely be shot down, whether as violations of the US’s Commerce Clause or of various international trade treaties.  All Kentucky can do is be a royal pain in the ass, and of course build that fence around their state, demanding geoblocking and other concessions.

It’s quite possible that the Kentucky rumor is true.  Additional information published by Compatible averred that the required payoff was something like $125 million per domain.  In my opinion, Stars, or any other site, would pay that exactly never.  So true or not, we may never know.

Let’s toss in another water-muddying story.  This one appeared today over at the iGaming Post (gaming-awards.com), another small site which tries hard but occasionally screws up.  Here’s the lead paragraph:

The iGaming Post has learned that following recent court hearing in the US between PokerStars, Full Tilt Poker and the DOJ, have come to concluding that a timetable for paying back players has been reached and the announcement will be made official in the last week of May.

Really?  Okay, great news if true, but that’s 180 degrees away from the USACompatible blurb.  So either someone is wrong (and perhaps unwittingly fulfilling some lawyer’s agenda), or there’s more to the story than anyone’s yet released.  One problem is that the second half of the iGaming Post story is the proverbial pile of crap, dragging in Wynn, Station Casinos, 888 Holdings, Caesars, Oprah Winfrey, Metta World Peace’s elbow and Daniel Negreanu’s dog Mushu in an attempt to explain why Stars would be buying a defunct Full Tilt site.  In the process, the story even declares this yakker:

888 Poker has already signed a partnership with Caesars and that deal was never cancelled since 888 was already effectively granted immunity after coming to an agreement with the DoJ after the passing of the UIGEA.

Really?  I don’t remember that one.  888 and the DOJ talked, but the DOJ wanted about $120 million and 888 (which also included flagship brand Pacific Poker) walked away from the table.  888 bolted the USA after the UIGEA, but potential US litigation issues are believed to have scuttled other deals since, including a lengthy series of merger talks with Ladbrokes a few years back.

Despite the fact that the story would be better news for US players, especially former Full Tilters, it seems that iGaming Post is pumping out some BS in this one.  There’s still a chance, however, that both of these rumor-driven stories could be true.  For instance, what if Kentucky’s lawyers showed up with threats and empty hands, and the DOJ, not wanting their own deal fouled, told them to shove it?  Not only are there those pesky Commerce Clause considerations, but there are now statements from the DOJ to the effect that the playing of poker online wasn’t illegal, either before or after the passing of the UIGEA.  Other stuff, sure, but Stars and Tilt offered nothing but poker, unlike most of the other sites Kentucky targeted.  And if Stars walks, the DOJ’s own coffers go wanting for several hundred million settlement dollars as well.  In our modern era of prosecution for profit, anything’s possible.

Note that such a line of reasoning is not only convoluted, it might even be ridiculous.  Still, it’s about the only way to make all the published rumors make sense.  Do I buy it?  Should you?

Not really.  And that’s were Part 2 of this week’s Big Muddy comes in, regarding the ongoing battle in New Jersey over whether or not online gambling will be allowed in that state.

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ESPN Announces 2012 World Series of Poker Broadcast Slate, a/k/a “No-Limit Tuesday”

WSOP 2012

Schedule for 2012 WSOP has been released

ESPN has just released the complete broadcast schedule for the 2012 World Series of Poker, which despite running for four months, includes just three events.  In addition to the main event, viewers will get a chance to peek at only the exclusive, charity-themed Big One for One Drop, which anyone can enter for a measly $1 million ($888,889 of which goes to the prize pool).  Other than the BOFOD, there’s a few hours of coverage from the WSOP National Championship, which will probably offer the best overall competition: it’s limited to what will probably be 150 or so players qualified via various criteria, including winning the main event at one of this past year’s WSOP Circuit stops.

Besides that, there’s the main event, and lots of it.  ME coverage begins on August 14 and runs all the way through the final table on October 30th.  Overall, all but a single hour of coverage will air on Tuesday nights on ESPN, with that oddball episode an afternoon kickoff for the entire series, scheduled for July 3rd on ESPN3.  Norman “The Couch Slouch” Chad, Lon McEachern and Kara Scott return for announcing duties.

Here’s the complete ESPN network broadcast slate:

Date  Time (ET)

 

Tues, July 3

3 PM — The Big One for One Drop (ESPN3)

8 PM — The Big One for One Drop

 

Tues, July 31

8 PM — The Big One for One Drop

9 PM — The Big One for One Drop

 

Tues, Aug 7

8 PM — WSOP National Championship

9 PM — WSOP National Championship

 

Tues, Aug 14

8 PM — Main Event

9 PM — Main Event

 

Tues, Aug 21

8 PM — Main Event

9 PM — Main Event

 

Tues, Aug 28

8 PM — Main Event

9 PM — Main Event

 

Wed, Sep 5

8 PM — Main Event

9 PM — Main Event

 

Tues, Sep 11

8 PM — Main Event

9 PM — Main Event

 

Tues, Sep 18

8 PM — Main Event

9 PM — Main Event

 

Tues, Sep 25

8 PM — Main Event

9 PM — Main Event

 

Tues, Oct 2

9 PM — Main Event

10 PM — Main Event

 

Tues, Oct 9

9 PM — Main Event

10 PM — Main Event

 

Tues, Oct 16

9 PM — Main Event

10 PM — Main Event

 

Tues, Oct 23

9 PM — Main Event

10 PM — Main Event

 

Tues, Oct 30

9 PM — Main Event Final Table

Want more coverage? Watch the WSOP Streams Online.

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A WSOP Stream for Everyone in 2012

Early May means run-up time to the World Series of Poker, when series officials announce final changes to the rules and fine-tune the series set-up to maximize audience potential and player participation.  One of the wrinkles announced today is a live web stream of all 60 WSOP final tables, which is great news, given ESPN’s overbearing devotion in recent years to the main event, and the main event only.

WSOP 2012

Live Stream for everyone's viewing needs

Most days will see two final-table streams, with a handful of days offering only one stream and a rare chance, if a tourney runs long, that three different streams might run on a single day somewhere mid-series.  The streams are scheduled to start each day at 1 pm and 2 pm Pacific Time, or 4 pm and 5 pm Eastern.  Each day’s designated “primary” event stream will receive a six-camera coverage package and commentary from one or more web-stream announcers, while the secondary event gets a two-camera mini-package with added commentary from that event’s final-table tournament director.

This should be decent, and it’s potentially great news for those  fans some distance from Las Vegas who might have a friend or relative final-table an event.  Before, there was little choice but to try to make very expensive, last-minute flight connections, or settle for updates via smartphone or websites.  This ought to be better, and if all goes well, it could supercede some of the on-site coverage brought to us by poker media outlets in recent years.

Nor was this the only major change.  In this week’s pre-series media conference call, the WSOP announced that it had revoked the four-year-old “Hevad Khan” rule, which had banned excessive celebration.  I’m less thrilled about this one, since it reeks of ESPN pulling rank and telling everyone else that they want to see people acting like asses for the camera.

To wit, ESPN has grown far beyond the point where they were a great coverer of sports events, and in recent years they’ve begun reshaping sports and entertainment for their own purposes, to the detriment of fans and viewers everywhere.  Fuck that nonsense, which starts with the omnipresent green-screen ad behind the unused batter’s box pimping their next televised baseball game.  Normal poker is just fine, thank you.  It’s all about creating a product that can sell more ads, except that the participants, the players themselves, aren’t allowed to sell much in the way of ads.  I think I can live without this latest corporate hypocrisy, whether or not it’s been dressed up for easier public consumption.

The ESPN-driven garbage even includes special rules for feature tables, at which players will be required to announce their betting actions, get “ESPN” tattoos, and swear allegiance to the Church of Norman Chad.  (I’m kidding about the last two… I think.)  The live streams should be better, if you actually enjoy poker.

Also, with additions to some of the secondary events always running at the Rio during the WSOP, including satellites, cash games and nightly deep-stacked events, there will be as many as 500 poker tables running at the Rio each day.  That’s essentially the entire usable floor space of the Rio Convention Center, which will be an impressive sight to see for those able to take part.

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California Tribe’s Deal with bwin.party a Good Deal?

Thunder Valley

Thunder Valley Tribe Casino makes a deal with bwin.party image from indiancountrytodaymedianetwork.com

One of the most interesting stories of recent days was the announcing of a deal between European online-poker giant bwin.party (parent of PartyPoker) and California’s United Auburn Indian Community, which operates the mid-sized Thunder Valley Casino Resort near Sacramento, the state’s capital.  The deal calls for bwin.party to offer online-poker services on behalf of the tribe, probably under the Thunder Valley brand name, in the event that “suitable intrastate legislation is enacted” in California.  The deal calls for a ten-year term of service between the United Auburns and bwin.party in the event such legislation becomes California law.  Financial elements were not disclosed.

For more details on the presser, you can click here.

So, good news?  Not good news?  This one falls squarely in the “good” column, not so much for the possible American market re-entry of corporate bludgeon Party, but for the signs that at least one of California’s tribal entities is seeing the light and taking appropriate measures to get back in touch with reality.

The Auburns’ proximity to state legislators in Sacramento might be giving them a front-row view into the other side of the equation, and that’s that everyone’s need to access this waiting new revenue stream vastly outweighs the tribes’ overbearing desires to maintain exclusivity and tribal sovereignty, two demands that simply have no valid place in the electronic age.

It would be very nice if the Auburn / bwin.party deal turned out to be the first leak in a rushing flood of deals, and all interested California tribal entities hurried to sign pacts with software developers and business providers.  California enacting online-poker legislation may be exactly that simple: if the tribal entities can get back in touch with reality, then the state likely has enough voting critical mass to push an online-poker pact through.  And given California’s size, a number of other states — and the feds — are likely to quickly follow.  Nevada can’t be a linchpin, but California can, and right the battle is mired in stubbornness and greed.  Here’s hoping the Auburn / bwin.party deal helps change that.

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Sale of Cake ‘Selected Assets’ Official; Lock Announces New Revolution Gaming Network

Lock Poker

Lock Poker Bought Cake Poker Network image from easiestpokersites.com

As expected, Lock Poker and Cake Poker officials this morning independently announced the sale of the Cake Poker Network to Lock Poker, which will be re-branded and relaunched as the Revolution Gaming Network.  Lock is expected to announce details of its pending departure from the Merge Network in the near future as it transitions to its new platform.

Cake sent out the following release to its PR list this morning:

Cake in Process of Selling Selected Assets to Lock Poker
Curacao, Dutch Antilles, May 7th, 2012 –  Cake Gaming N.V. has announced today it is in the process of selling selected assets to Lock Poker, enabling Lock to rebrand the existing Cake Network to Revolution Gaming. Cake will continue operations providing all of its current Network partners, sites and players the opportunity to be part of the Revolution Gaming Network.
Cake is excited about the benefits this deal will offer all of its partners and players, including increased player rewards, a richer tournament schedule and new product features.  This deal also allows Cake to focus efforts on its current European, South American and Asian business with another exciting announcement to soon follow.
Lock’s release and acknowledgment was similarly brief:
As of June 1st a whole new world awaits the Lock Nation.Lock is in the process of acquiring assets from Cake and will be re-branding the Cake Network to launch Revolution Gaming, driving technology, marketing, player rewards and implementing a richer tournament schedule. The LockPRO team will be at the foundation of these changes. They will come together and offer their recommendations on all levels, truly bringing the player into the boardroom.

To all existing Lock players this move will be seamless – it will take the form of a simple software update happening on May 31st. You will login to find your real money balance as well as everything else you know and love about Lock. Lock will also continue to manage their own stand-alone cashier so withdrawals will be as fast and easy as they are now. All players’ current player VIP rewards will only increase and all rakeback players will be moved over to the increased percentage on Revolution. More details coming soon.

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Trying to Reignite Limit Hold’Em: Negreanu Crushed in First PokerStars Limit Hold’em Challenge

Daniel Negreanu

Negreanu gets crushed trying to reignite Limit Hold'Em

Americans love no-limit hold’em, while Europeans favor pot-limit Omaha; so goes the standard wisdom.  Yet other forms of poker have their fans as well, and one can’t fault PokerStars for trying to reignite a bit of love in an old standby, that being the fixed-limit form of Texas hold’em.  Stars, with a concept called the Limit Hold’em Challenge, pitted off its biggest endorsement name, Daniel Negreanu, in a two-table, heads-up match against a young german LHE specialist, “RUaBot,” on Saturday.

“Kid Poker,” a/k/a Negreanu, has some serious limit fold’em credentials to his name even if he’s thought of more these days as an NLHE tourney regular.  This match-up, promotional tool or not, had an interesting premise: The two players would vie at $400/$800 stakes with a combined bankroll of $75,000 eventually in play, and if either play won that much against the other, that meant a victory in the match-up.

The surprise here wasn’t that Negreanu went down to someone who seems to be a pure LHE specialist; rather, the surprise was how quickly it happened.  Bouncing along on an extended case of run-good, RUaBot sent Negreanu to Bustoville in just 937 hands, or a little more than four hours of two-table, heads-up play.

For a complete recap of the match-up, our friend Martin Harris, a/k/a “Short-Stacked Shamus,” has a nice write-up over at the PokerStars blog here.  And this is a very good result for Stars and for limit hold’em, when such a famous player gets his hat handed to him, as it suggests to a lot of players that there just might be some money to be made at an exacting and math-based poker variant such as limit hold’em.

Will it translate into a surge in LHE interest?  Gotta think Stars hopes it does.

It’ll be interesting to see if someone recorded the hands and runs them through any sort of analytical software in the days or weeks ahead, to see how much of Negreanu’s crushing was due to run-bad, but also if he had any limit holes or leaks that RUaBot was able to exploit as the match went on.  In pre-match buildup, RUaBot claimed that the science of limit hold’em was well and good, but reacting and adapting to opponents’ tendencies was the art of limit.  And given the result, it begs the obvious question: Was Negreanu outplayed, or outlucked?

No telling when another of these PokerStars limit challenges might ensure, either.  Negreanu departed in a bit of a huff, as one might expect.  In a brief chat with RUaBot following the felting, Negreanu typed: “have never in my life played 2 tables HU LH and I never will again“.  I’ve left a table or two with that thought in my mind as well; it seems Negreanu was well and thoroughly tilted by the time this one wrapped up.

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Lock Poker to Acquire Cake Network

Update: The acquisition now seems confirmed via an affiliate-merger thread and comments over at PokerAffiliateListings.com — hh.

Cake Poker Network

Lock Poker to Acquire Cake Poker Network???

A couple of down-on-their-luck poker entities might be combining forces in a last-ditch effort for survival, as several sources report Lock Poker acquiring the Cake Poker Network.  Lock, plowing along through an unhappy existence at Australia-based Merge, seems poised to make another try elsewhere, and the cash-strapped Cake Network just might be that fit.

First news of the potential acquisition came via the dubious Gambling 9111, so let’s keep this one just shy of the “confirmed” column for now.  One of the earliest reactions — and that surprisingly muted — comes from CalvinAyre.com.  Ayre has a longstanding hatred of Lock Poker and its executive, including Lock’s CEO Jennifer Larson, so the mild tone of this reaction to the probable story is interpreted here that the deal is likely for real.

Both Lock and Cake remain embroiled in controversies that continue to simmer, in a handful of corporate missteps too numerous to mention.  Nonetheless, a Lock/Cake marriage would be a natural evolution in the online-poker business, which has seen the corporate ranks thin a bit over recent months.  With global dynamics and an increasing complex and competitive marketplace becoming the norm, the strong are getting stronger and the weak are searching for ways to transition and evolve… failing that, they keep on falling by the wayside.

According to the G911 piece, the Lock Poker pros would remain with the site independent of this corporate deal, which includes Annette “Annette15″ Obrestad, who inked a new pact with Lock just a few weeks ago.  Cake and its primary skin, according to G911, would also remain intact as semi-autonomous sites.

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