A deal has been signed between PokerStars and the beleaguered ,Full Tilt Poker (FTP), according to which $731 million will be repaid to ex FTP players.
Pocket Kings, the company that used to operate FTP, lost its license last year when a US court alleged that it cheated clients of billions of dollars. PokerStars, an FTP rival, has agreed to acquire FTP in exchange for which it has to repay $731 million to ex FTP players all over
the world.
According to the deal, PokerStars has to pay the US government $547 million, which the government will use to refund ex FTP players coming under its jurisdiction. PokerStars also has to pay $184 million to ex FTP players all over the world, in return for which it will receive FTP’s assets.
Raymond Bitar, chief executive officer for FTP, pleaded last month that he is not guilty of cheating FTP players of as much as $430 million. Preet Bharara, US attorney, has initiated proceedings against several FTP executives as well as Pocket Kings Consulting and Pocket Kings Limited.
In April 2011, Preet Bharara had filed cases against PokerStars, Full Tilt Poker, and Absolute Poker, as a result of which FTP lost its license to run an online poker business and hundreds of its employees lost their jobs. According to a recent report, both poker companies have requested a settlement although none of them has pleaded guilty. Mr. Bharara announced the settlements by the two poker companies, which allow US authorities to make sure that ex FTP players get a refund.
Last year, the US federal government indicted founders of Absolute Poker, PokerStars, and Full Tilt Poker and booked them on charges of money laundering, bank fraud, and illegal gambling. The prosecutors sought to recover $3 billion raked in as profit by these three companies.
The root of this crackdown on the part of the US federal government is the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, which prevents US financial institutions and banks from processing gambling related funds. Although no US law criminalizes online gaming, US companies are not given the license to operate online gambling sites. Although Full Tilt Poker and PokerStars offered paid poker services to US online poker players, they were forced to withdraw when the US government accused them of bank fraud and money laundering.
PokerStars spokesman Eric Hollreiser announced that PokerStars will re-launch FTP outside the US within three months.
