Full Tilt Poker seeks French investor

story from The Telegraph (UK)

By Richard Blackden, in New York, 6:00AM BST 26 Sep 2011

Full Tilt Poker, the Dublin-based poker company accused of being a Ponzi scheme by the US government, is trying to seal a deal with a potential French buyer, according to the company's lawyer.

The company is in talks with the unnamed French investor and has also had an expression of interest from another possible buyer, said Jeff Ifrah, a lawyer for Full Tilt.

Full Tilt, which is regulated in Alderney and supports more than 500 jobs on the outskirts of Dublin, has been on the back foot since April when it was one of three online poker companies targeted by US authorities for alleged illegal gambling, money laundering and bank fraud. Last week, Preet Bharara, Manhattan's chief prosecutor, raised the stakes by accusing Full Tilt of being a "global Ponzi scheme."

"The future is a question of whether we can still find an interested investor," said Mr Ifrah. He declined to comment on the initial allegations made in April.

Online gambling companies have been under threat in America since 2006, when the Unlawful Internet Gaming Enforcement Act was passed and prohibited banks from transferring funds to gambling sites. Full Tilt, Poker Stars, which is based on the Isle of Man, and Absolute Poker were accused by US authorities of trying to work around the ban to continue to operate in the US.

In last week's lawsuit, it was alleged that Full Tilt's ability to process payments had been so weakened that it was crediting players' accounts with money it didn't have, and now owes players $390m (£252m).

In a statement late last month, Full Tilt said that it believed "offering peer-to-peer online poker did not violate any federal laws." It added that "our players should know that Full Tilt is fully committed to paying them back in full and restoring confidence in our operations."

Full Tilt is also facing a class-action lawsuit from poker players in the US trying to recover their money. "If it's (Full Tilt) not being taken over, then someone should be stepping in to protect the interest of the creditors," said David Greene of Edwin Coe, a London law firm representing the players in the US.

A sale of Full Tilt will be further complicated because Alderney's Gambling Control Commission revoked a licence from the company at the end of July. The Commission met every day last week in a London hotel to decide whether to reinstate the licence but has yet to make a ruling.

"There is, as they say, a lot of hair on this deal," said Mr Ifrah. Full Tilt's lawyer also took issue with the claim by US authorities that Full Tilt was a Ponzi scheme. "It was completely inappropriate. It does not appear in the complaint and was not supported by anything in the complaint," said Mr Ifrah.

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StuZel Silver 2
3887d ago

Who in their right mind is going to buy or invest in a company that owes nearly $400m - There could be absolutely no value in a name that has been tarnished as a Ponzi scheme and whose directors are under investigation by a federal governement. For a fraction of the price any potential investor could emply the world's best software engineers to replicate a site that could be as good as FTP and invest in an international advertising campaign with a leading  PR company. Alas - there will be no buy out - and any monies that might be recovered from this mess will go to lawyers, government agencies, licensing authorities etc...........