POKERSTARS SETTLES WITH US DEPARTMENT OF JUSTICE
The world’s biggest online poker operator, PokerStars, in July 2012 reached a last-minute settlement with the US Department of Justice over claims of illegal gambling operations. The settlement stands as breaking point in online poker history, as it salvaged the reputation of the market’s biggest player and rescued player funds for thousands of players from then-biggest competitor, Full Tilt Poker.
July 31 2012 will likely be remembered as one of the most important dates in online poker history due to the groundbreaking announcement of a settlement deal between PokerStars and the US Department of Justice.
Leading up to the settlement had been more than a year of conflict between players, operator and authorities over the allegations of illegal gambling operations and payment processing in the US. PokerStars admitted no wrongdoings in its settlement deal, but managed to broker through a complicated deal with the DoJ, which would secure its future operation as well as that of its then-biggest competitor Full Tilt Poker.
The debacle had a long run-up in which thousands of online poker players were left in uncertainty over their funds with Full Tilt Poker, reported to be well above $350 million worldwide. PokerStars had like Full Tilt Poker been targeted by the DoJ as part of the Black Friday events, but had almost immediately guaranteed all player funds. Full Tilt Poker, on the other hand, admitted to being unable to pay out players. As part of the settlement deal, PokerStars assumed this responsibility and pledged to take over Full Tilt Poker and its entire player debts in return for a clean sheet with the DoJ.
The deal was remarkable to say at least. Running up to the surprise takeover, Full Tilt Poker had for months been reported to be in intense takeover talks with a French investment group, led by the colorful Bernard Tapié. The group, which was reportedly agreeing to pay back Full Tilt Player worldwide in return for the rights to acquire the company assets, was indeed looking as a new Full Tilt owner until the 11th hour. Then, in a surprise move, the DoJ announced to have reached a deal with PokerStars instead. The deal was announced simultaneously by the DoJ and PokerStars and immediately caused jaws to drop across an entire industry.
In the wake of the events, PokerStars is now the owner of Full Tilt Poker, allowing the company to consolidate itself further as the market’s sole dominating force. The Full Tilt Poker brand has by now been re-launched across a number of national markets, with a new license and a full guarantee of player funds.
With all of its twists and turns and its surprise happy ending, the tale of PokerStars’ last-minute settlement with the DoJ and the following takeover of its biggest competitor and its entire player pool to this day remains one of the single biggest moments of importance in online poker history.