PokerStrategy.com Column - AGCC, You Failed.


Originally featured on PokerStrategy.com. 

It took nearly two weeks (and before that three months) for the Alderney Gambling Control Commission (AGCC) to revoke the license of Full Tilt Poker. We are only a few hours into this latest plot twist, but after a two weeks of silence, there has already been a big backlash against the AGCC by the players, no matter how inevitable this news was.

Should we be directing our frustration at the AGCC right now, after all they are not accused of money laundering, they didn't accept deposits that they couldn't process, they didn't report funds as liquid when they had been seized by the DOJ. These were all things that were out of control of the AGCC, and they noted this in their press release which stated they were 'fundamentally misled' about the funds at Full Tilt.

Out Of Their Control?

But let us look a little deeper into what was in their control. The accounting evidence in the determination notice was compiled by accountants Dixon Wilson on the 28 June 2011. These audits highlighted that around $331 million was seized by the US Department of Justice between 2007 and 2011. These frozen funds were reported as liquid, and should have been immediately brought to the attention of the AGCC by Full Tilt.

So in 2007 Full Tilt should have reported this, and by not doing so, they managed to fool the AGCC for four years?

Four years?

What on earth does a regulator do if they cannot notice a $331 million shortfall on account over four years? Is it not the job of a regulator to regularly audit a company with millions of dollars of customer money, instead of naively accepting whatever play money account balance is reported at the end of the tax year?

Where were the Audits?

It depends entirely on the industry and the country the business is in, but most regulators insist on annual accounting audits by third parties to ensure things like this do not happen. Full Tilt was a privately limited company, which usually means that they would be subject to less mandatory audits, but surely that is no excuse?

Very few privately limited companies would ever hold onto customer funds for significant amount of times like an online poker room does. In that regard they are operatively more similar to a bank, and with so much potential for financial ruin, surely the AGCC should have treated regulating them in the same manner?

Although I am sure that the AGCC do ensure company accounts are audited regularly, I cannot believe for one second that this happened with the degree of scrutiny they should have been. Let me remind you once again, $331 million seized since 2007 - how can any remotely experienced accountant miss that?

They told us that they allowed Full Tilt an extension on their hearing to pursue an investor as it was in the player's interest to do so, because it would enable the players to get their funds back. Rather fortuitously this also allowed them to get £250,000 in operating fees that were owed to them. Now that they have revoked Full Tilt's license, I am not seeing much mention to them still looking to get the players funds back any more.

The AGCC are trying to say they were fooled by Full Tilt for all this time, I say that the AGCC failed us. Would the events of Black Friday still have happened no matter what they did? Yes. But had FullTilt been regulated with more scrutiny, had they been audited properly in the last four years, not only would Full Tilt's accounting shortfall been noticed sooner, this most likely would have been prevented from ever happening at all.

PokerStrategy.com Column - Should the Red Pros Give Their Earnings Back?

Tom Dwan
Tom Dwan has pledged
$1 million to the players
Originally featured on PokerStrategy.com

Right now, Tom 'durrrrr' Dwan is winning over lots of frustrated Full Tilt Poker customers with how actively and openly he is handling the latest revelations.

In particular, sticking to his pledge to pay back the $1 million that he was paid by the site, direct to the players. Not only has he set a great example most of us can admire, he has also urged his fellow Full Tilt Pros to do the same, and pledge back some of the money they made from the site.

Elsewhere, the first European pros sponsored by Full Tilt and also one of their biggest affiliates, The Hendon Mob, made a statement on their site saying that while they admire Dwan for this, they wont be doing the same, and that most of the revenue they got from the site went to pay the staff of their own site.

Pretty much all the other Red Pros have been noticeably silent over the last week. It is understandable, right now large sections of the poker community want to direct their anger at anyone who had anything to do with Full Tilt, and there are few people more symbolic of the site more than the Red Pros. Not only that, now many people are echoing Tom Dwans suggestion that the Red Pros should take some brunt of the responsibility for what happened, and pay back some of their endorsement money.

So should they?

Red Pro or Team Full Tilt?

Before I go on, let me quickly distinguish between Red Pros and Team Full Tilt, because it is important. Team Full Tilt is made up by the 15 players who are said to have the biggest deals, in some cases equity shares, and in some cases helped found the site.

A Red Pro is one of the 250+ players who were sponsored by the site and contracted to play a certain amount of time at their online tables. In return some got sponsored into live events, some were given bonuses, and others were on $30 p/hr + 100% rakeback deals. In many cases the deals were hybrids of all three.

I must admit, I had always been very jealous of anyone with the Red Pro deal. I have no aspirations of being a professional or a sponsored player, but $30 an hour + 100% rakeback? Those of us who have come to rely on rakeback for a percentage of their winnings can only view a Red Pro deal as a holy grail. I, like I am sure many people, have wasted a significant amount of time working out how much money I would pull in as a Red Pro, by 16-tabling low-mid stakes games, while enjoying the feeling of being a sponsored pro, and giving out 'I Bust a Pro' t-shirts to anyone who managed to felt me.

We already revealed in our interview with poker agent Nick Ferro that most of the Red Pros didn't sign any contracts. This of course highlights just how unregulated the handshake business of poker is, and no doubt is one of many clues as to the downfall of the site.

It also reveals how low down in the food chain they were, and just how little influence they had. Do you think that 99% of them had the first clue as to how Full Tilt operated? Other than those with actual shares in the company, I doubt most of the pros knew any more than the guys in customer support, the marketing department, or the staff canteen.

But they were ambassadors of the site I hear you say. Surely the fact that these well known pros gave their seal of approval to the site influenced customers to sign up, assuming their money must be safe? I have no doubt that will have happened in some instances, but how many of us can honestly say they signed up to a site because professional poker player X said we should? Most of us sign up to a site because of bonuses, rakeback, traffic, soft games, big tournament guarantees, good software, rush poker, or a funny little dog avatar.

The players that likely have influenced some of us to sign up are those players at the top end, the guys in Team Full Tilt, who do have a say in the way the company did business - the Iveys, Dwans, Fergusons, Hansens, and Matusows. No offense to them, but nobody signed up to Full Tilt because of Perry Friedman, Berry Johnson, Jeff Madsen, or David Pham (Four names I have picked at random from the huge list of Red Pros).

What Value Did Red Pros Bring?

Team Full Tilt
There were over 250
Red Pros before Black Friday
Which makes you question, if they had such little influence, both in the back room and from a marketing point of view, what was the point of all these Red Pros? I completely agree. The money a Red Pro could stand to get was ridiculously high compared to what they actually brought to the company.

I would say that the only marketing benefit most of the red pros provided was to completely saturate the televised tournament fields with Full Tilt badges, other than that they were really just a luxury of a site that wanted to claim to have the most sponsored players.

So, in the aftermath of the events of the last week, should they feel guilty about all the money they were able to make, in return for relatively easy work? Of course not, they were just the lucky b*****ds we all wanted to  be.

When presented with such a generous deal like this, few of us would want to jeopardize it by investigating the inner workings of a business 99% of us believed was making money. When presented with lucrative bonuses, most of us don't set the money aside, just on the off chance our new employer gets accused of being a ponzi scheme, we spend it.

And lets not forget that a great deal of these players have seen a complete reversal of fortune. Instead of laughing all the way to the bank, many of them currently have their own bankrolls currently in limbo on the site, amounts they may not have deposited had they not been hired as Red Pros in the first place.

I think this debate comes down to one of whether you consider a Red Pro an employee or an ambassador. For me, the Red Pros were just employees of Full Tilt Poker, nothing more. They treated it in the same way most people treat a 9-5 job by doing what they were told, trying to make as much as possible, and not wanting to rock the boat when they had a great deal. No doubt this is one of the reasons most of them haven't said a word on what has happened in the last week.

They had no more influence or insight into how the business ran than anyone else at the Full Tilt other than the share holders and upper management. For most part they were greatly overpaid, but being lucky enough to be gifted such a dream job does not vindicate them in this scandal.

by Barry Carter

PokerStrategy.com Column - Should PokerStars Get Rush Poker?

Originally featured on PokerStrategy.com

Rush Poker
Rush Poker
It was revealed this week that PokerStars are working on their own version of a fast moving ring game, like the ground-breaking Rush Poker. With Full Tilt Poker doing anything but rushing to get their players back at the table, the timing would seem to be perfect for Stars to capture the rapid poker market

Some of the initial feedback from many in the poker community has been quite negative, and a lot of the Stars regs are concerned that Rush will kill the cash games. The biggest criticism of Rush Poker in this regard was that it split the cash game traffic on Full Tilt and took a lot action away from the regular games.  The high volume nature of Rush Poker and the fact you no longer had to wait long for a hand also appeared to turn everyone into nitty rakeback players, making the game itself a tough place to make a profit.

Killing the Game?

Both concerns are well founded. Thankfully, prior to Black Friday, Stars had over double the average cash game traffic on Full Tilt and even without US custom still has significantly more, so the likelihood of it killing the non-rush games is much less likely. It will no doubt take a significant portion of the traffic from those games, but there should still be healthy traffic in the standard ring games.

As for the fact it turns players into nits, that is true, because any innovation that allows players to multi table more efficiently and generate more rake is going to appeal to the tight regulars. That is the state of online poker today, and if you do not like it, there are plenty of sites with poor software and less regs (I mean that by the way, that’s not a pro-PokerStars swipe at their competitors, there are plenty of softer sites out there specifically because it’s hard for regs to multitable).

SuperNova Elite More Likely?

Not all the regs will be complaining about implementation of a rush format, one group that presumably already started licking their lips and doing VPP calculations are those players striving to make SuperNova or SuperNova Elite. Black Friday had a negative impact on SuperNova Elite chasers outside the US because it significantly reduced the traffic in a lot of the games these players relied on to hit their volume targets. This could redress the balance a bit, and I could imagine a ton of action in December from players trying a last ditch attempt to hit 1 million VPPs.

The Future is MobileYou can say what you want about Full Tilt (and we all are) but Rush Poker was a genius idea. It was undeniably fun and addictive poker, even for those of us that had gotten sick of the standard No Limit cash game format. And as a business concept, it was even better, as it allowed us to pay rake at a faster rate than ever before, and turn even recreational one-tablers into genuine high volume grinders.

Talent imitates, Genius Steals: I fully expect Stars to take the existing product and do something much better with it. Just before Black Friday, Full Tilt was just starting to expand their mobile version of Rush Poker, and this is where I expect Stars to pick up and improve. The future of online poker, just like just about everything else in life, is mobile, and if there was ever a poker format the lent itself to mobile gaming, it is Rush Poker.

I for one am quite excited to see what PokerStars can do with Rush Poker, I don’t think I will kill the non-rush cash games (Though it will have an impact for sure) and with the biggest poker room in the world behind it, I think it could actually be very attractive to brand new players (Perhaps the only remaining part of the Full Tilt legacy that is).

by Barry Carter

Joining PokerStrategy

With poker in the current state it is in, surely I would have to be mad to leave arguably one of the most stable poker media companies in the business? I would, and I am pretty risk averse during the best of times, so anyone who knows me would probably have guessed I wasn't going to be leaving PokerNews to invest in magic beans. I am pleased to announce I am going to be joining PokerStrategy.com , mainly as a content writer, but with a few other fun things on the horizon too.

Some people in the UK or US may not know a great deal about PokerStrategy, but in the rest of Europe they are a giant. Alongside PokerNews & PokerListings, they are part of the 'Big 3' of poker affiliate sites, as well as probably the biggest strategy site out there (To date I have probably worked for the two best, most self explanatory, domain names in poker, PokerNews and PokerStrategy).

What they are not as well known for, at the moment, is their news content - that's where I come in. Their actual content is great, and the community is incredibly strong, but I'm not sure as many people know about their news content as they should. That said, they have recently had some exclusive statements from Full Tilt, so I guess they are now on the map. They want to establish themselves as as not only the number 1 strategy site, but also the number 1 news site, in poker. My job will be raising awareness of this, and hopefully ensuring that we have unique content that keeps people coming back for more. 

It is a perfect mix of security and challenge for me. One of the real appeals was the challenge of establishing them as the number 1 news site out there, but also having the safety net of them being a massive site with plenty of resource and talented staff to pull it off. This is also without doubt the best ever time to be a poker journalist - not in terms of finding work, in that regard its possibly the worst time, but in terms of finding things to write about. It seems a new scandal breaks every other day at the moment in poker, so one thing is for sure, I wont be bored. 

A change is as good as a rest as they say, and I really can't wait to get my teeth into this exciting new venture, so bookmark PokerStrategy.com, because I am going to be shoving it down your throat anyway. 

Leaving PokerNews

I never thought I would be saying this, but I have decided to leave PokerNews.  It was a tremendously tough decision because I really enjoyed the job, the company, and the people. The only reason I have left is because a new opportunity has arisen, and after five years I really felt ready for a new challenge. 

Lots of people when they leave a job, particularly it seems in poker, use the opportunity to moan about their former employers and air some dirty laundry - that wont happen here. I have nothing but respect for everyone there, have genuinely enjoyed every minute of it, and think there are some tremendously talented people there. In my opinion they are the best at what they do, and in particular have raised the bar for live tournament reporting.

In particular I want to publicly thanks CEO Robbie Davies, who has been a great leader and friend over the last five years. In particular he was very supportive both when I released my book, and more importantly when my Father passed away last year. He was just as supportive when I told him I was leaving, he was a real class act about it and his priority was making sure I was doing what was best for me. Tony G is also one of the most generous guys you are likely to meet on the poker circuit and it has certainly been entertaining having him as the public face of the company you work for. 

I'm still tying up a few loose ends at UK PokerNews for the rest of the month so you will still see my name on there for a while yet, but my work for the main PokerNews.com site has come to an end. 

Poker is a small world and I know our paths will cross again many times in the future, I wish everyone at PokerNews the best of luck and hope we will all stay in touch. 

On to an exciting new venture, which I will detail in a future blog post this week. 
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