According to the Wall Street Journal, the proposed Full Tilt purchase by a group of French investors could involve giving equity stakes to players owed the most money from the site. The Journal also reports that the French investment group could be looking to current Full Tilt owners as a source of investment capital. However, no existing owners would be part of company management moving forward.
Both revelations are a sign that the French bailout will not be a squeaky clean process. Members of the poker community had hoped for an investor who would cut a check for the sum of player balances and pending DOJ fines in order to acquire the site. The deal with French investors does not appear it will be of this nature.
By offering players with large sums of money stuck on the site an equity percentage, the French investment group can lower the amount of capital they need up front. Rather than paying full sticker price for the site, it appears they are attempting to offer less up-front capital while offering equity to players with huge balances. From the perspective of these players, this is much less desirable than simply being paid back in full. Rather than getting their money up-front, these players will now be put in a position to root for the site’s success in hopes that, over time, they are able to recoup the money they had stuck on the site. This equity handout plan will first have to be approved by the DOJ.
The DOJ would also have to agree to allow current owners to invest capital in the new company. This is a potentially contentious aspect of the French investors’ proposal; the poker world may feel uneasy about flocking back to the site while knowing the same owners who crashed it the first time around stand to profit from its resurrection.
In conclusion, these latest revelations from the Wall Street Journal about the dynamics of the Full Tilt bailout make it clear that the plan is less than ideal for players hoping to recoup their balances. Additionally, it is apparent that the agreement has a long road ahead before it can be finalized.