What a PokerStars Buyout of Full Tilt Would Mean
Last week, rumors that PokerStars would buy out Full Tilt rocked the poker world into excitement. The rumor was fueled with more credibility when it was reported that Groupe Bernard Tapie's efforts to buy the troubled site had fallen through due to a disagreement with the U.S. Department of Justice (DOJ) over how quickly Full Tilt players should be repaid. While there is no official word from PokerStars confirming the buyout as of now, multiple poker media outlets have worked with independent sources to confirm that the deal is in fact done for all intents and purposes.
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The buyout will cost PokerStars $750 million. More than enough to repay the $330 million owed to all Full Tilt players worldwide as well as settle with the DOJ. It is also rumored that as part of the deal, PokerStars founder and operator, Isai Scheinberg, who was among the eleven men indicted by the U.S. on Black Friday, will step down his position with the company.
So what does this buyout mean for poker? Well, let's first start with the obvious. This is great news for poker. It's as though the poker economy just looked down and found $330 million on the ground. Poker players have plenty of reason to be excited. There were a number of people who believed the laborious buyout effort of GBT would never go through. Faith in the value of Full Tilt money had fallen as low as 10-20 cents on the dollar. The PokerStars buyout came out of literally nowhere and now leaves people evaluating their Full Tilt money as closer to 95 cents on the dollar.
As proof that some poker players can find something to complain about in literally every situation, worries of the buyout causing a monopoly in the online poker world were voiced this week. These concerns are absurd for a few reasons. The most obvious of these is that players should be chiefly concerned with getting their $330 million back. Even the most irrational doomsday monopoly scenarios are not as bad as Full Tilt players never being repaid.
The poker landscape will probably look a lot like it did before after this buyout: PokerStars and Full Tilt both with sizable player bases and sites like 888 Poker, Titan Poker, and Party Poker drawing in substantial business of their own. Concerns of a monopoly are just silly. There will always be multiple online poker rooms. There will always be one that's larger than the others. PokerStars will always be motivated to keep people playing at their site.
It would be surprising if Full Tilt players were merged onto PokerStars. Part of the value of this buyout from PokerStars' perspective is the Full Tilt brand so they will likely be operated as separate sites. It could be possible that the company will permit player-to-player transfers across the two platforms. Another motivating factor to operate them as separate entities is for the purpose of increasing their chances of getting into the U.S. market at some point.
One factor in this buyout that should not be overlooked is the impact of Isai Scheinberg being forced to step down from the company. Scheinberg has been compared to Steve Jobs for his talent for motivating people to build a world-class product. In a recent interview on QuadJacks, former PokerStars marketing manager Scott Yeates praised Scheinberg saying that he could out-talk anyone in the company about any aspect of the operation. In other words, Isai Scheinberg is PokerStars. All of the gratitude that poker players have for the PokerStars product can be directed at one man. It will be necessary to hope that the person(s) left in charge of the company have a business savvy more akin to Scheinberg than Ray Bitar, Howard Lederer, et al.
Assuming the deal goes through, which at this point seems to be a reasonable assumption as PokerStars likely would have made a public statement quelling the rumors if they were not true, players can expect to get their money rather quickly. What led to the demise of GBT's buyout efforts was the DOJ demanding players be repaid in full within 90 days of the sale. So it's safe to assume Stars intends on meeting that demand. It shouldn't be hard for them. After all, they were issuing refunds to their American customers within a week after Black Friday.
With the 90 day repayment demand being a deal-breaker for GBT coupled with their founder's history of fixing soccer matches, not to mention complete lack of experience in the gaming world, it now seems appropriate to feel relieved they will not be acquiring Full Tilt.