I only have limited time right now, so I will keep this short. However, here is my initial take on the situation, given in Q&A format:
Q: Why do we have to apply to get our own money back? Why can't the government just automatically send it to us, or put up some automated website for us to update our address and get checks sent out?
A: The government wants to make this semi-difficult, so people with low account balances (or ones just not paying attention) won't end up getting their money. This is simialr to mail-in rebate programs for products you buy at stores, where the manufacturer knows that only a small percentage of people will actually cash in on the rebate.
Q: Why is the government agreeing to this at all? If they are getting paid $80 million, and they owe US players $150 million, and they are dropping the case against Full Tilt to get more money, won't they be out $70 million?
A: The government seized about $45 million on Black Friday. They can't keep this money while players are owed, or it would look really bad. So in reality, they got around $125 million for Full Tilt, and they probably assume that $25 million will never be claimed.
Q: Why would Full Tilt's current ownership give away the entire company for free? While the value of the company has taken a hit as of late, it's got to be worth something!
A: This is actually a sweetheart deal for the existing Full Tilt ownership. The company actually has negative value at the moment. They have no license, have been shut down for months, the site's reputation (at least under present ownership) is ruined, and they owe nearly $400 million to their players. Here they actually walk away from all that unscathed. This is the best possible scenario for present shareholders.
Q: With the US government now in charge of disbursing US player funds, will they be reporting any cashouts to the IRS?
A: Yes, this is likely, but not certain. It is likely because the IRS is supposed to know about all income paid to US citizens, and this requirement was (illegally) dodged in the past simply because poker sites were already operating afoul of US law, and didn't feel like reporting anything to the IRS (and potentially hurting business). The US Department of Justice is unlikely to skirt the IRS' reqiurements, as this would be illegal. However, any money collected by the IRS does not benefit the DOJ at all, and they would only make such reports in order to comply with the law. It is also possible that they will only report cashouts over a certain dollar amount, similar to how some land-based casinos (legally) don't report small tournament cashes.
Q: Why is GBT entering into this deal? They can't offer games to US players anymore, and the brand itself is forever tainted. They are paying $80 million to the US government and assuming around $200 in debt to non-US players. How could this collapsed site be worth $300 million at this point?
A: GBT is said to act unethically at times, but they have never been accused of being stupid. They have likely done some number crunching and believe that they can recoup the $300 million and profit beyond that. They will immediately generate revenue from non-US players returning to the site, but perhaps the real value will be a down-the-road partnership with a US-based gaming company if online poker becomes legalized in the US. For example, GBT could license (and manage) the existing Full Tilt software for the Wynn Online Poker Room, and charge a hefty fee. They also have a chance of legally entering the US market at that time with their own site, as GBT never broke any US laws regarding offering online gaming.
Q: What timetable can players expect for getting their money back?
A: No idea. In general, the government isn't speedy about things, so expect at least a few month delay, but it could be more than that.
Q: Is this a done deal? Is it verified?
A: No. The DOJ will not confirm anything, and there is some skepticism within the poker media that the authors of the Yahoo article are not reliable. It is possible that some or all of this story is fabricated or exaggerated, even though it appeared on a mainstream site.
Check back to dandruffpoker.com for updates as they come (and I feel like reporting them.)
Please do not repost this without a link to dandruffpoker.com.
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