PokerStars to Make Former PKR Players Whole
Two months ago, 11-year old Microgaming Poker Network skin PKR Poker halted operations as it was announced that the online poker room had filed for administrative protection, roughly the UK equivalent to the United States’ bankruptcy. At the time, MPN said that it believes PKR would have no problem refunding customers their deposits, but as time has gone on, it does not appear that such a basic thing will happen. That is why PokerStars announced today that it will make every PKR customer whole, even if they were not already PokerStars customers. The money comes with no strings attached – players can receive the money and cash it out immediately.
PKR only gave the briefest of messages to its players at the time, only saying that it had filed for administrative protection and that more information would follow. In a blog post in early May, MPN’s Head of Product, Alex Scott, tried to give a little bit more information:
On the evening of the 3rd May 2017, PKR informed Microgaming that it it [sic] was in the process of seeking professional independent advice due to financial difficulties and instructed Microgaming to stop deposits, withdrawals and gameplay for PKR players.
Today, the 5th May 2017, PKR informed Microgaming that it had applied to the court for an administration order. Administration is a procedure which acts as a protection mechanism for insolvent companies, the primary objective being to rescue the company as a going concern.
He then discussed the status of player funds:
PKR has repeatedly assured us that player funds are held in a segregated client account, for the express purpose of storing such funds, in accordance with their licence obligations in the United Kingdom and Alderney. We believe this to be true.
Microgaming does not hold any player funds whatsoever. Player funds are held only by PKR and it is now the duty of PKR’s administrator to return the funds to players.
It is important to note that simply maintaining a segregated bank account for player funds does not automatically mean that player funds will be returned immediately or at all. PKR’s administrator will ultimately decide how to return money to players.
It is obvious now that PKR is not going to return funds to players, hence why PokerStars is stepping in. My colleague, Haley Hintze, was likely correct when she surmised at the time of PKR’s shutdown, “The filing unfortunately freezes the online bankrolls of all PKR players, who are likely to be classified as unsecured creditors as a court-supervised administrative resolution moves forward.”
PKR very well may have had the money in a segregated account, but as Alex Scott said, that “….does not automatically mean that player funds will be returned immediately or at all.”
For its part, PokerStars has said that the primary reason why it is spending its own money to help out PKR customers is that it is simply the right thing to do. The poker room said in a blog post that it will be a relatively simple process for most PKR players, as the majority also already have accounts on PokerStars. Those who do not need to create a PokerStars account, but other than that requirement, they can withdraw the money immediately, if they would like.
Interestingly, PokerStars readily admits that while the primary motivation here was to do what is right, it also knows that it will likely gain customers from this move and that many of those already with PokerStars accounts will probably use the money to play on the site.
So, a cynic would say that PokerStars is just using this as a marketing opportunity, knowing that much of the money they give out will be put right back onto the PokerStars tables. It’s possible that this is the case, but really, why not just let both things be true? PokerStars sees this is a chance to both do something good for people in the poker community and drum up some good will and additional patronage. The two don’t have to be mutually exclusive.
After explaining some of the mechanics of the refund process, PokerStars went on to explain how it protects players’ money and how the UK Gaming Commission dictates that it do so. PokerStars said, in part:
Seeing players left with no protection is one of the many reasons that we advocate for safe and sensible regulation. As an industry leader, we have the responsibility to lead from the front and demonstrate the importance of sound business practise. While we can’t always be accountable for how other companies in our industry act – and it’s not our role to be the world’s online poker police – we can lead by example and encourage others to put players first.
The poker room also noted that it has no plans to acquire PKR or “revive” its popular 3-D poker software.
“We’re doing this,” PokerStars said, “because we think it’s the right thing to do for the poker world and to encourage others to join us in putting you, the player, first by segregating and protecting player balances from operating funds.”