FTP Remissions Deadline is Here, Don’t Wait for GCG to be Your Advocate

After more than two and half years, former Full Tilt Poker players from the U.S. are able to file a petition for remission to reclaim their account balances.  The deadline for filing those petitions is tomorrow, November 16, 2013.

The company chosen to handle the administration of the remission is Garden City Group. GCG provides a website through which the petitions must be filed, and although they include some information, the site leaves open just as many questions as answers.  No one at GCG is willing to address those questions with any members of the media.  I wrote last month about some of the misinformation that has come from the group, and today I was told that they were aware of the article, however, they have not seen fit to respond to any of the issues raised, and once again today, the persons in charge of speaking with the media, have refused to do so.  This has been the case since April 2013.

Players can check that site for instructions to file. If you have received your control number and do not plan to dispute the balance they have on record for you, you should be able to file and have little or no issue with receiving your funds. The Poker Players Alliance has reported that the AFMLS of the Department of Justice has indicated than an optimistic time frame for payments to begin in non-disputed claims may be first quarter of 2014.  If however, you fall into any other category, you are still at the mercy of GCG employees who have shown little or no knowledge of the basis of those account balances at all.    Continue reading

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New Jersey Online Approvals Published, Soft Launch Quickly Approaching

NewJerseyTo date, five casinos have been issued internet gaming permits in Atlantic City.  By New Jersey law, the casino is the only one entitled to such a permit, it is the casino who would have to request approvals for companies they would be partnering with for online services. The five permits issued belong to:

  1.   The Borgata Hotel Casino and Spa
  2.   Golden Nugget Atlantic City
  3.   Trump Plaza
  4.   Trump Taj Mahal
  5.   Tropicana Casino and Resort

In order to receive a permit, a casino in good standing, must write checks totaling $ 350K upfront with another $300K to follow before real money gaming occurs.

Conspicuously missing is Caesars (4 casinos), and Resorts.  The other two casinos in town, Revel and Atlantic Club have apparently chosen not to participate at this time.  Atlantic Club filed for bankruptcy protection yesterday. Online gaming permits will only be issued to brick and mortar casinos in Atlantic City via N.J. law.

The following companies were granted transactional waivers to conduct business in Atlantic City with the casino that jointly petitioned with them for such approval:

  • CAMS, LLC.     Continue reading
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Atlantic Club Files for Bankruptcy Protection, Possible Plans for the Auction Block

atlantic clubAs was rumored the last week in Atlantic City, the Atlantic Club has filed for Chapter 11 bankruptcy protection and put itself on the auction block. Reports say that $ 15 million is being put up by a hedge fund to finance the bankruptcy and keep it running while the bankruptcy is pending. It is expected that any auction bids would have to exceed that value.

Documents show that the company lists their employee pension plan as a creditor, with “unknown” in the value column.  It was reported during the spring that the Atlantic Club’s employee pension fund was unfunded to the point of $ 32 million.  The documents also show legal fees owed to three firms totaling more than $ 1.4 million. Bally Gaming (technologies) is owed $ 615,000, US Food Service is owed $ 560,000, and WMS $418,000. The electric company, and IGT, along with other various companies listed under “trade services claims” round out the list for the largest 20 creditors.  All total (the top 20), not including the pension fund, are more than $ 5.5 million. The full creditor matrix lists more than 2000 creditors, most appearing to be personal names, potentially those that would be owed via the pension plan or other employee compensation due.

This same time last year, Atlantic Club was already crying poverty and threatening bankruptcy. They were bailed out by PokerStars, the online gaming giant from Isle of Man, who had hoped to purchase the casino, potentially looking toward online gaming being approved in New Jersey.  The purchase price at the time was $ 15 million, including bonuses for the Chief Operating Officer Michael Frawley and the Chief Financial Officer Eric Matejevich. In order to save almost 2000 jobs, PokerStars immediately began funneling some of that purchase price monthly into the Atlantic Club coffers, keeping the casino afloat.  By February 2013, they had already paid $ 11 million of the $ 15 million to the casino but shortly after Governor Christie signed the internet gaming law into effect in New Jersey,the Atlantic Club killed the deal with PokerStars, with the casino admitting they thought that now the property was worth so much more. Atlantic Club’s COO, Michael Frawley stated at the time “The Atlantic Club remains committed to the aggressive pursuit of the opportunities presented by online gambling.”   Continue reading

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Caesars Woes in Massachusetts Could Span Farther

Caesars Entertainment, a giant in the U.S. casino industry, was dealt a blow by the Massachusetts Gaming Commission after learning that the Commission may deem the company “unsuitable” for licensing in the state.  According to a Caesars’ SEC filing on the matter, the commission, relying on reports from its Investigations and Enforcement Bureau, “primarily cited” concerns over Caesars relationship with Gansevoort, the company that would be branding Caesars boutique hotel under construction in Las Vegas, formerly the home of Bill’s Gambling Hall.  The commission report, which is not yet public, reportedly does cite concerns that an investor in Gansevoort, Arik Kislin, has been identified as having ties to organized crime in Russia.

Caesars had signed an agreement with Suffolk Downs Racetrack in Boston to manage their casino at the track.  After receiving a copy of the briefing from the commission, Suffolk Downs asked Caesars to withdraw as a qualifier from their license application.  Caesars then agreed to the withdrawal in Massachusetts, after also severing its ties to Gansevoort in Las Vegas.  Gary Loveman, CEO of Caesars seemed surprised that removing the company’s relationship with Gansevoort was not enough to continue suitability approvals in Massachusetts.  As first reported in the Boston Globe, Loveman said  “In other jurisdictions if you do something that raises a regulator’s concerns . . . in almost every instance as long as you discontinue or disassociate it is considered a reasonable action”. The Globe has also reported that Suffolk Downs plans to move forward to procure the casino license, finding  a management partner other than Caesars.

According to the SEC filing however, the Gansevoort ties may not be Caesar’s only problem, and those problems may not be limited to Massachusetts.

The report claims that the commission report “noted matters” that pertain to Mitch Garber, CEO of Caesars Interactive and CEO of Caesars new subsidiary, Caesars Acquisition Company. Garber, who came to Caesars in 2009, was previously the CEO of Party Gaming (now bwin.party), and was so at the time that the Unlawful Internet Gambling Enforcement Act (UIGEA) was enacted in 2006.  Party went on to agree to a non-prosecution agreement with the U.S. Department of Justice, forfeiting $ 105 million and admitting to certain gaming related federal felonies including violations of the Illegal Gambling Business Act, Wire Fraud and Bank Fraud.  As reported by DiamondFlushPoker.com in March, Party admitted to using payment processors that were intentionally miscoding credit card payments through banks in the U.S., to using ACH processors to accept e-checks from their players. In many instances players deposits were sent to particular individuals at an international remitting company in Gibraltar and then simply transferred to the players accounts at Party. Party further admitted to masking outgoing payments to its customers in the U.S. by using intermediaries that used bank accounts in the U.S. in the name of “Advanced Marketing Solutions”, not Party Gaming.

Before moving to Party Gaming, Garber was the CEO of Firepay, and during his tenure there, Firepay serviced customers in the USA, processing payments for online poker, casino games and sportsbetting.

Last, but certainly not least, the SEC report notes that on October 11, Caesars was informed by FinCEN (the Financial Crimes Enforcement Network of the U.S. Department of the Treasury) that Desert Palace, the Caesars subsidiary that owns Caesars Palace in Las Vegas, is being investigated for alleged violations of the Bank Secrecy Act.  FinCEN is determining whether to impose civil monetary fines or take additional enforcement actions. A federal grand jury is investigating.

While Caesars notes in their filing that neither they, nor their subsidiaries, have been found unsuitable in any jurisdiction, and that no final findings have been submitted by virtue of the aforementioned investigative bodies, they can make no assurances about the possible outcomes, how they might affect the financial position of the company and at this time, they cannot predict the range of loss, if any. Caesars currently carries a whopping debt of ~ $24 billion.

Caesars operates casinos in 13 U.S. states and six countries. They also have recently launched an online poker product in Nevada and are awaiting a permit for approval in New Jersey.  It is unclear what impact these investigations may have in  jurisdictions other than Massachusetts but each individual jurisdictional gaming commission will be watching the outcome.

 Edit 10/22/2013: Typo correction

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Garden City Group: Comedy of Errors or Still Room for Redemption?

Garden City Group, the company hired by the US Attorneys Office to handle the remissions process for victims of the fraud that kept them from their Full Tilt Poker balances before the company changed hands, is not necessarily entitled to a passing grade for their actions in dealing with those victims to date. They have given out erroneous information, both by phone and in writing, and no one in power at the company is willing to discuss those errors.  They have however, recently begun to backtrack and take steps to correct their mistakes.

According to a press release by the US Attorneys Office in the Southern District of New York on March 13, 2013, Garden City Group was hired to facilitate the remissions process for the Asset Forfeiture and Money Laundering Services division of the Department of Justice and are responsible for processing the remissions claims based on parameters set by the AFMLS.

Sadly, as well known as they are in their own community, Garden City embarked upon communicating with the potential victims only months later, when they reported that the remissions process was beginning.  Such process began on September 16,2013  and will close on November 16, 2013. Since that time, GCG has advised some possible claimants that they are not eligible to submit a petition.  That was wrong, anyone can submit a petition. There are certain categories that will be denied remissions once the petitions are reviewed (this should not be happening prior to the bar date, November 16, 2013). Some of those that could face issues are “affiliates”. While GCG has refused to clarify what parameters will be used to determine who has that dreaded “affiliate” status, they have, in writing and by phone, advised some potential claimants that they are not eligible, that they have already been tagged as an “affiliate” based on information from the original Full Tilt Poker. While their customer service support people were matter-of-factly telling legitimate players that they had no chance to collect remissions, they never bothered to check whether whatever data they were working from was correct. After many phone calls and other contacts with the folks that really make the decisions, GCG has finally agreed to look for aid in deciphering the data outside of their own kingdom.  Since that time, they have regrouped and made at least some concessions, without ever having admitted to their mistakes.    Continue reading

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G2E Gaming Experts Discuss Bad Actors Clauses and How They Impact State by State Regulatory Approvals

A late day conference panel at the Global Gaming Expo in Las Vegas didn’t draw the crowd it deserved due to conflicts with other panels, but some experts from the gaming industry had some strong views on who should be in the online gaming market and who shouldn’t.

Melissa Blau, Director and Consultant at iGaming Capital moderated the panel and led out with the question on how one defines the term “bad actor” for purposes of regulatory approvals.

Yaniv Sherman, V.P. and  Head of Business Development and Sales for 888 led out saying that the term has various connotations but is really just the opposite of someone who is licensed.

Jan Jones, V.P. of Communications and Government Relations for Caesars Entertainment agreed and added that for regulatory and legislative purposes the term means simply “not licensable”.

David Deitch, Attorney with Ifrah Law in Washington, said the term refers to specific definitions of those companies that would not get licenses.  Deitch pointed out that suitability for licensing was always determined by the regulatory agencies, but that in Nevada, the legislature took that job away from regulators this year.

Michael Rumbolz, Director of Seminole Hard Rock International, somewhat agreed with Deitch, saying in the past legislation is usually broad leaving suitability questions up to the regulators, enumerating things in the law that potentially “could” disqualify any applicant, but with the decision made by regulators.  Now, newly signed legislation in Nevada, for example, discards that premise with the legislature making the decision prior to any applications.  Continue reading

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Gaming Regulators to Casinos: We Know What Your Real Reasons Are for That Brown Envelope

That was the message that some past and present regulators offered at the Global Gaming Expo in Las Vegas when talking about complaints they receive from casino operators about their peers. The conference panel entitled: “Regulator or Referee: Dealing with Jurisdictional Disputes” told licensees “we understand your game”.

“Regulators don’t really want to be in the middle of anything” said Dennis Neilander of Kaempfer Crowell and former chairman of the Nevada Gaming Commission .  We know that some, even most, of the complaints made by licensees about other licensees are simply to gain some competitive edge. The divisions investigate anyway though, and do not rule by either the “shield or the sword”.

“We used to cringe, then sigh, when that anonymous brown envelope showed up at the door”, said Neilander. We were always pretty sure what would be inside. The panel agreed that the operators spend a lot of time watching each other, as they should,  and sometimes file anonymous complaints with the gaming commissions when they see their competition either making strides in areas they either never thought of, aren’t yet licensed for, or where they just can’t compete.

“We are required by statute to investigate all complaints”, continued Neilander noting that Nevada has even just strengthened that statute. “But we also have the responsibility to promote competition”.    Continue reading

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AGA President Addresses the Press, Talks About Online Plans, Competition, and Getting Players On Their Side

aga-logoLast week at the Global Gaming Expo in Las Vegas, American Gaming Association President and CEO Geoff Freemen conducted a media conference to discuss plans for promoting a further crackdown on illegal online gambling in the U.s.  Part of the AGA’s effort to further this goal is to leverage the new fictional movie, “Runner Runner”, both to engage the public in further discussion and to educate policymakers across the country for the need to safeguard Americans from illegal operators like those depicted in the movie.

AGA: Fiction is Close to Reality

Runner Runner, starring Ben Afleck and Justin Timberlake is a fictional account of what happens when a college student goes broke from online gambling and decides to chase down those that he feels are responsible. The movie is opening in theaters this week in the U.S.

According to the AGA, Americans spent $ 2.6 billion on illegal gambling websites in 2012 and represent almost 10 percent of the $ 33 billion worldwide market. The research used by the AGA (via H2 Gambling Capital) reinforces the need for protection of Americans from illegal online operators like those depicted in the film said Freeman.

The movie, according to Freeman, is “all too close to reality” and shows why its necessary for further legislation. To date, only three states Nevada, Delaware and New Jersey, have enacted laws to allow online gaming.  Nevada has two sites active, New Jersey and Delaware are expected to follow with launches later this year.

Freeman makes note that the AGA preference was, and still is, to see federal legislation in force.  Despite federal bills being introduced several times over the last few years, none have been able to make it into law.  State by state legislation seems to be the alternative, with more and more states considering legislation and watching the progress in those with laws on the books.  When talking about various intrastate launches, Freeman noted “We will not be left behind”.

The AGA wants to very aggressively promote their message and have put an commercial advertisement together to do so.  According to Freeman, movie theatres have declined to include the ad at movie showings, but the organization will find other ways to promote their message, including an online web showing dedicated to do just that.

What the AGA is looking to do is assure that there are minimum standards in place for age verifications and responsible gambling, that tribes are included in regulatory framework, and to give law enforcement the tools necessary to keep out “bad actors”.

It’s no secret that the AGA and its members lobbied for a “bad actors” clause in Nevada and were successful in seeing that a five year ban was placed to disallow licenses to online operators that continues to operate after December 2006. In New Jersey, despite those efforts, no bad actors clause was inserted into the law itself. The decision to determine licensing recommendations rests with the NJ Division of Gaming Enforcement, who conducts all necessary investigations to determine suitability.

Moves Against the Competition

Within the past year, the world’s largest online poker company, PokerStars of Isle of Man, took steps to purchase a casino in New Jersey. (Licenses for online gaming must be tied to brick and mortar facilities in the state.)  Once the potential acquisition was made public, and months later when the Governor of New Jersey signed online gaming into law, the AGA petitioned the Casino Control Commission to ask permission to speak against PokerStars receiving approval.  They petitioned for legal standing to make those arguments as well.  The acquisition agreement fell apart in late April, and eventually PokerStars instead partnered with Resorts Casino, to provide online gaming for them.  The petitions of the AGA were moot once PokerStars withdrew its application for an interim casino authorization, the license necessary to own and operate a casino. While the license for suitability of PokerStars to operate with Resorts is pending like all others at this time, it’s now confirmed that the AGA took further action by contacting the gaming authorities in New Jersey to still press their agenda to deny a license to the Isle of Man operator. The DGE does not comment publicly about outstanding applications.

When I asked Freemen about the AGA’s actions against PokerStars, he would not comment on any related litigation matters but he further said that their position is that the company operated illegally and should not be licensed.  When I asked further about other companies that also offered online gaming prior to current legislation specifically making it legal in certain states, he reiterated that the AGA’s stance is that companies that operated post 2006 (after enactment of UIGEA) should be denied licenses.  He did further admit however, that the reason for taking the stance is the competitive edge that AGA members feel PokerStars would have if they came to market in NJ.  While its been speculated for months that this was the real reason for the action, this is the first time that the AGA has admitted their motive, although still asserting the illegality of PokerStars operation since 2006.

PokerStars was named in a civil forfeiture suit in April 2011, and in 2012, the company settled with the U.S. Department of Justice. They admitted no wrongdoing in their settlement, nor did the DOJ demand that they do so.  The DOJ did receive admissions of wrongdoing from other companies that operated in the US prior to 2006, some in the form of non-prosecution agreements with felony admissions. The Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006 is an enforcement act that relies on predicate offenses already on the books in various states before 2006.  The AGA issued a white paper in 2011 specifically saying that UIGEA does not define illegal online gambling, yet the AGA and its members use the 2006 as a line in the sand for determining who operated illegally.

AGA Wants Players on Their Side

Freemen went on to say that the AGA wants players, their customers, on their side.  I spoke to Freeman after the briefing.  He insists he was sincere in hoping to get customers to understand and stand with the AGA, and he again confirmed that it was the competition for AGA members that brought about their actions against PokerStars.  I will give him due credit for admitting the motives that most players knew were in place, and plan to meet with him soon to discuss the AGA’s relationship with the players.

What is important to realize is that the players have learned to be more vigilant in their trust of online operators.  It was the players that unearthed a huge scam that took place in online gaming several years ago by Ultimate Bet/Absolute Poker. Many thousands of US citizens make their living playing online poker.  Many of those have left the country to continue to play post Black Friday, including on PokerStars. Players have made conscious decisions after being burned on who to trust and who they want to have their business. Players have gotten a lot smarter than anyone gives them credit for.

Competition is part of doing business, any business.  It’s my opinion that it should not be feared, but embraced, as an incentive to provide what the customers want and need. The player advocate side of me hopes to be able to show the AGA that players, especially poker players, are smart adults, capable of making decisions on their own on where to play.  The best possible world for those players is to have as many choices as possible available to them.  Players will choose to do business with whom they trust, the companies that offer what they want.  They will avoid those companies that don’t fit those categories.  Players also want protection against the bad guys, we just disagree on who the bad guys are.  No one wants their money stolen from them, or a game that isn’t fair.  We also want age verification and we want as many choices as possible available to us.

Maybe we can find a way to all be on the same page.





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Full Tilt Poker Remissions Process Begins

Full Tilt Poker LogoMore than two years after the US government barred U.S. online poker players from playing on the Full Tilt Poker website, the chance of those players being reunited with the money that should have been in their players accounts, got a step closer today.

Garden City Group (GCG), the company chosen by the US Department of Justice to administer a remissions fund to repay U.S. players, began sending out notices to potentially millions of U.S players today, in which the players may file to be considered for compensation.

The website created by GCG, where those eligible for a possible remissions payment have been checking for months, has been updated, stating that emails have begun to be sent to victims of the fraud perpetrated by Full Tilt Poker and that eligible victims will be able to petition the U.S. Attorney General to recover their losses resulting from crimes of the original company.

The email process to eligible victims is expected to be completed in two days and beginning on Wednesday, September 18, those that received the emails can follow the instructions to submit a remissions claim. Those emails include instructions for players to view their account balances. If players believe they are eligible to participate in the process and do not receive an email, the can file a new petition with a link that will become available on the GCG website on September 18.

The Asset Forfeiture Money Laundering Section of the D.O.J., responsible for remissions, has decided that payments will be calculated based on the final balances in players accounts as of April 15, 2011. GCG has information received from Full Tilt Poker (prior to it’s forfeiture of all assets) and will assume those values of players accounts are valid.  If a player, after receiving an email and accesses the information thru the link provided, agrees with the amount shown, he may submit the petition request. If they disagree with the amount shown, they can file a dispute, including documentation to support his claim.

If anyone believes they are due compensation from this remission but their name does not appear in data received from FTP (they will receive no email from GCG), they will be able to file a new petition, and will need to provide the amount of their FTP Account Balance through the Petition Filing site, and will need to submit documentation to substantiate their claimed FTP Account Balance.

The deadline for filing for this remission is November 16, 2013.

The GCG website includes a “Frequently Asked Qestions” link, which can be seen here.

Since at least April 15, 2011, a date known in online poker as “Black Friday”, U.S. players have been unable to recover the funds they had in their players accounts. The U.S. Attorneys Office, Southern District of New York, seized the Full Tilt Poker domain and shut down the site pending civil fofeiture charges, including criminal charges against several principles. Shortly after the action, the U.S. government gave permission to Full Tilt Poker to return the players money, but the company eventually admitted to no longer having the funds available to do so.

Additional charges were filed against Full Tilt Poker and its Board of Directors at the time, including fraud allegations, allowing players to be considered “victims”.  The U.S. Attorney issued a statement in 2012 advising that the player “victims” will be eligible to request compensation via the remission process.

Full Tilt Poker, settling its civil suit with the U.S. D.O.J., forfeited its assets in mid 2012.  PokerStars, another company cited in the Black Friday charges, also settled with the D.O.J. in 2012, admitting no wrongdoing, and agreed to acquire the FTP assets forwarded by the previous company.  It is the money paid by PokerStars in their settlement that is allowing sufficient funds to be available to repay the victims. It is the Rational Group, owners of PokerStars, that now also owns and operates the “new” Full Tilt Poker online poker site.  There is no ownership/management affiliation between the old Full Tilt Poker that was not able to repay its players, and the new Full Tilt Poker, owned by Rational.

PokerStars repaid its own U.S. players account balances in 2011 as soon as it was possible to do so.  Full Tilt Poker players outside the U.S., known as “rest of world” players, were able to have access to their funds via the new ownership in Full Tilt Poker since November 2012.

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Exclusive: Rebuck Interview – “New Jersey Will Be the Best in the World”

New Jersey: Best in The World

David Rebuck, Director, NJ Division of Gaming Enforcement

In an exclusive interview one-on-one interview with Diamond Flush Poker, David Rebuck, the Director of the New Jersey Division of Gaming Enforcement talked openly about where New Jersey can fit into the i-gaming arena, how preparation for launch is progressing, obstacles that are part of the mix and what he expects to happen down the line.  I found him to be open to the questions, candid with his answers and committed to providing the tools necessary for internet gaming to be a success in Atlantic City. I was particularly impressed with his goal: “In short time, New Jersey will have not only the best system in the country, but in the world.” He’s not a man willing to settle for second place, his commitment is clear.

The Wire Act Opinion: “It was a Sign”

“We were preparing well before the law was passed” said Rebuck. The DGE posted a draft of proposed regulations for internet gaming on June 3, barely 3 months after the bill was signed into law.  “We were working on developing regulations and standards for some time, just in case.”  The turning point for Rebuck was the Department of Justice’s legal opinion regarding the Wire Act. In December 2011, The Office of Legal Counsel for D.O.J. made public their opinion that the Wire Act of 1960 referred only to sporting contests, not poker or other gaming. According to Rebuck, “we knew that this had a significant impact on interstate play in the U.S., we used it as a signal to plan on moving forward, and we did. Other jurisdictions and casino operators should have been preparing as well.  It was a sign of what was coming.”     Continue reading

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