PokerStars settles for $731 million, buys Full Tilt, pays players
The world’s largest Internet poker company, PokerStars, is settling with the government to the tune of $731 million more than a year after a crackdown on online gambling.
And, in possibly the best part of the deal, the company is also buying former competitor Full Tilt Poker and paying back its customers, who were left locked out of their accounts after the site’s U.S. operations were shut down last April.
In the agreement with the Manhattan branch of the Department of Justice, PokerStars will forfeit $547 million to the government over three years. The payment will settle civil charges that the company engaged in fraud to sidestep U.S. regulations on online gambling.
Part of that pot will go toward repaying Full Tilt’s American players.
PokerStars will also fill a separate bank account with $184 million within 90 days to pay back the balances owed to foreign Full Tilt customers. Unlike Full Tilt, PokerStars’ international site has been steadily operational and the company has already reimbursed customers left in the lurch after its American operations were shut down last year.
As part of the government deal, PokerStars did not admit to wrongdoing and will be allowed to apply to once again offer online poker for real money if and when the U.S. makes it legal.
The company will also pay the government $225 million for Full Tilt’s assets. PokerStars said it plans to relaunch Full Tilt in most markets as a separate brand operated out of Dublin, Ireland.
The settlement with the Justice Department prevents PokerStars from hiring on Raymond Bitar, Howard Lederer, Rafael Furst, Chris Ferguson, and Nelson Burtnick – all Full Tilt honchos who are either named in criminal indictments or civil laundering cases related to the case.
“We are delighted we have been able to put this matter behind us,” said Mark Scheinberg, chairman of the Board of PokerStars.
Manhattan’s U.S. attorney Preet Bharara had stronger words.
“Today’s settlements demonstrate that if you engage in conduct that violates the laws of the United States, as we alleged in this case, then even if you are doing so from across the ocean, you will have to answer for that conduct and turn over your ill-gotten gains,” he said.
Players just wanted to know whether the process of retrieving their funds would be “unduly burdensome,” said John Pappas, executive director of the Poker Players Alliance. Most likely, they will have to apply to the Justice Departments for the money.
“We applaud that the parties made a process for the restitution of the players a central component of the agreement, and appreciate the government’s commitment to the fair treatment of the players,” he said.
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