DOJ Denies 1500 Player Petitions in US Full Tilt Poker Remission Process

The long-running remission process orchestrated by the US Department of Justice concerning money long owed to former US-based players of the original Full Tilt Poker site received a bit of a jolt over the weekend, when the DOJ-hired claims administrator, Garden City Group, quietly posted a notice informing the public that the DOJ has officially denied petitions for about 1,500 players.

The abrupt notice from Ohio-based CGC, published late on Friday, delivered the jolting news in a single paragraph:

GCG has been informed that the Department of Justice Asset Forfeiture and Money Laundering Section has denied approximately 1,500 Petitions. Petitioners flagged for denial have been notified via email. Please be sure to check your email account’s spam or junk folder to ensure the message was not filtered. Denied petitioners have ten days to appeal the decision.

FlushDraw has been tracking the Full Tilt Poker remission process ever since the plans for it were announced as part of the late-2012 settlement between the DOJ and then-rival site PokerStars, which acquired all of Full Tilt’s assets in exchange for providing roughly $331 million for use in repaying Full Tilt’s global audience of players.

scales-justiceAbout $184 million of that went to non-US Full Tilters, once PokerStars parent Rational Group relaunched the FTP brand.  However, the remainder, nearly $150 million, was held in abeyance by the DOJ for the soon-to-follow process of refunding those US-based players.  Therein lies the link to the hidden profit for the DOJ in the entire Black Friday prosecution.

Over the course of eight previous waves of remission payments made to former FTP players, GCG refunded about 44,000 accounts for a total of roughly $112 million.  The breakdown, by wave and date:

  • February, 2014: $76 million, 27,500 accounts
  • April, 2014: $5 million, 2,200 accounts
  • June, 2014: $14 million, 3,200 accounts
  • September, 2014: $1.8 million, 600 accounts
  • March, 2015: $2.8 million, 3,500 accounts
  • June, 2015: $4 million, 4,000 accounts
  • November, 2015: $5.7 million, 2,000 accounts
  • March, 2016: $2.6 million, 1,180 accounts

Rough percentages included in earlier GCG updates allowed for an approximation of remaining petitions.  The ballpark figure?  About 3,000 FTP petitions remained to be processed, because they involved disputed balances or involved some of the specific accounting shenanigans that were an unfortunately hallmark of that company’s operations.  For instance, hundreds of players were inaccurately tagged within Full Tilt’s accounting system as being affiliates despite not actually being an affiliate in fact, just because it was an easy work-around in FTP’s accounting system.

That lack of accuracy and accountability has turned into a headache for these players, hundreds of whom have had to prove that they weren’t actually affiliates.  Since the DOJ has declared that being a US-based affiliate of Full Tilt was active support of an illegal online gambling operation, affiliate-derived income is not being refunded to affected players.

Even worse, Full Tilt gave no thought to not commingling affiliate payments with poker play, often depositing said affiliate payments into ordinary player accounts.  That led to further excessive seizure of supposed affiliate payments and funds.

Friday’s announcement of the denial of roughly 1,500 petitions accounts for about half of those petitions still to be processed.  Not all of the 1,500 denied petitions are presumed to be affiliates of the old Full Tilt site, as some compensated pro players and business partners may also be included.  The 1,500 total also includes some players who both played on the site and had affiliate deposits made into their accounts, but who were net losing players, and had only net amounts of affiliate-derived incomes in their player accounts.

And that leads to the matter of the money itself.  The Full Tilt Poker accounts remaining to have their remission petitions processed were known to be disproportionately high-balance accounts.  At least $32 million of the specific set-aside for former US players remains to be distributed.  Garden City Group, the appointed claims administrator, gets several million for its work.  That work has yet to be completed but a $5 million total, based on paperwork released to date, is a reasonable estimate.

That leaves nearly $30 million in unpaid-balance money, and it appears that the protocols established will end up leaving most of that in the DOJ’s own pockets.  Let’s assume, for the sake of an example, that the other 1,500 or so petitions remaining to be approved contain higher overall balances than those already processed, even though many big bankrolls were successfully processed in early refund waves.

How much higher?  No one outside the DOJ or GCG knows for sure.  But, for the sake of this example, let’s be generous and say that the remaining 1,500 petitions which will eventually lead to successful refunds are, on average, three times as large as those in earlier petition payments.

To date, the paid petition have averaged a little over $2,000 per account.  Even assuming a generous tripling for the remaining 1,500 accounts that will receive refunds (and nothing at all for the other 1,500 that won’t), that means the DOJ and GCG might pay as much as $9 million in its final, drawn-out wave of refunds, which appears to have started already.  Maybe even $10 million.  I doubt it’ll be that high.

That still leaves at least $20 million more for the DOJ itself, funds that were set aside to refund Full Tilt customers that will never end up anywhere else but the US government’s coffers.  And that’s on top of the nine-digit settlement specifically agreed to by PokerStars to settle its own portion of the Black Friday case.

Whether the whole Black Friday case was an example of prosecution for profit remains a wide-open topic for discussion.  Regarding the FTP remission process, however, it’s clear that the DOJ did pretty well for itself, after all.

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