One Month Later
THE WEEKLY SHUFFLE, 2011-05-15, by OzoneOne month ago today, the United States Department of Justice issued indictments against the owners of PokerStars, Full Tilt, and Absolute Poker/UB. "Black Friday", as that day has become to be known in poker circles, changed the online poker landscape forever. The storylines that have unfolded as a result have been numerous and not easy to keep up with. At the one month anniversary of Black Friday, here are some short-form glances at a few things worth knowing for anyone with a casual interest in online poker.
At the present moment, the loose consensus in the online poker world puts the value of money trapped on Full Tilt for U.S. players as worth $0.82 on the dollar. There is much less optimism for UB money which is being valued at $0.35 on the dollar. PokerStars has already returned more than $100 million to their U.S. customers.
Last week, UB and Absolute Poker laid off their combined 11 sponsored pros. In a "final statement" following the lay off, former UB pro Joe Sebok offered an apology for not being able to accomplish what he wanted to through his sponsorship of the beleaguered company. He did admit he was naive in thinking he could change anything. It is estimated that Sebok made $600,000 in his nearly two years of acting as a sponsor for UB.
Black Friday has given poker more mainstream media exposure than ever. Recently, a TIME magazine article focused on the lives of Isaac Haxton and Justin Bonomo, two American online pros who are contemplating a move abroad in order to be able to continue playing the game. The article went far in profiling Bonomo when it said that the move will probably require him to break up with his girlfriend. Hopefully he hinted this to her before showing her the TIME magazine article.
Despite chopping them off at the knees, Black Friday has not affected PokerStars and Full Tilt's positions as the two largest poker rooms as of yet. While each have sustained a sizable hit, they are both still significantly larger than Party Poker. It seems hard to imagine PokerStars being overtaken as the largest poker room anytime in the foreseeable future. However, payment processing headaches and a large U.S. presence could eventually undo Full Tilt. The site remains around three times larger than Party Poker, but it will be interesting to see if they maintain that distance moving forward.
UB and Absolute Poker are considered all but dead at this point. It's just a matter of how long it takes the corpse to stop twitching.
The largest benefactor of Black Friday appears to be the Merge Gaming Network. They have absorbed a larger percentage of the U.S. market than competitors Bodog and the Cake Network. The Merge Network has seen its "7 day player average" at PokerScout.com increase every day since Black Friday. However, the network is still just around 5% of the size of PokerStars prior to April 15th.
Two things will be interesting to observe regarding the Merge Network. First, just how much of the U.S. market will gravitate towards them? If there is a Stars/Tilt replacement, it is Merge. Just how large of a replacement it will be remains to be seen. The second thing to watch is, will the DOJ go after them at some point? They are doing exactly what Stars and Tilt did only they're doing it after the DOJ made a heavy move against the practice. That would make them seem like even more of an obvious target than Stars and Tilt were prior to Black Friday. The editors of PokerTips maintain a position that money is far from safe for Americans at any online gambling site at the present time.
The DOJ stepped up asset seizures recently by grabbing five homes owned by persons indicted on April 15th. As Forbes reported, one of the homes belonged to former Playmate Destiny Davis. Davis married payment processor Chad Ellie the day after he was charged by the DOJ. Ray Bitar, an owner of Full Tilt, had his four Glendora, California homes seized.
It took a few weeks, but UB and Absolute Poker entered into an agreement with the DOJ to return U.S. player funds. PokerStars and Full Tilt entered the same agreement shortly following Black Friday and were returned their domain names for doing so. In a press release, the company stated its, "top priority has always been, and remains, the refund of account balances to its U.S. players." However, they claim they face, "several legal issues," preventing them from returning player funds at the present time.
The storyline with the most potential for fireworks moving forward is Full Tilt's payment processing woes. Since Black Friday, the poker world has gradually placed less faith in Full Tilt monies after seeing PokerStars refund players with relative ease. One month ago, no one could have imagined a day where money on Full Tilt was worth just $0.82 on the dollar, but that day is here. The poker world seems to be growing more anxious as more time passes; in the days after Black Friday, it was generally agreed upon that Full Tilt money was worth around $0.90-$0.95 on the dollar. Considering the weeks of silence from Full Tilt, including a grand total of zero Tweets from Howard Lederer and Phil Ivey since April 15th, players with money at the site seem surprisingly calm. This tranquility will not last forever. A lot of people have a lot of money stuck on Full Tilt. With the WSOP right around the corner, the money on Full Tilt represents much needed liquidity for a lot of people trying to make a living playing poker. It will be interesting to see how much longer the poker world tolerates silence from Full Tilt.
The Weekly Shuffle is our Sunday column with our observations and commentary on the poker world. Have an idea for an article? Leave a suggestion on the feedback page.
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