While prima may not control deposits and withdrawals I would expect all player funds would be stored through them. Having various companies responsible for account holdings opens a whole can of worms. It's essentially like someone being able to sit down at pokerstars and start playing against someone at fulltilt, then expecting fulltilt to transfer over money that is lost (vice versa).

Players from other skins who won money directly/indirectly from tusk players would become affected to.

If money is being stored seperately and not by a universal method calling battlefield and rednines a "skin" is clearly misleading.

A little essay entitled

"Why I believe all players will eventually get their money, and why liquidation isn't as bad as it sounds"

My speculation here is based on my experience as a high-risk lender and my involvement in several liquidations from the creditors' side. I don't know the specifics of the jurisdiction that Tusk is in, or the jurisdictions of their agreements with Microgaming. I also don't know the specifics of the license agreement between Microgaming and Tusk (perhaps someone from one of the skins with a direct license agreement with Microgaming can comment on my assumptions.

It is important to remember that liquidation is not the same thing as bankruptcy. Liquidation is also not the same thing as insolvency, although the two often go hand in hand. We have no evidence at this point to suggest that Tusk is insolvent, or that they will declare bankruptcy.

Who are Tusks likely creditors? Well, their biggest creditor is probably Microgaming. The license agreement probably makes Microgaming the primary secured creditor, and I would be very suprised if the agreement allowed any other creditor to have a blanket lien on company assets. There are likely other secured creditors, but these would be people like office equipment and computer vendors. Their collateral would not extend past a lien on the specific equipment financed. Even if the Microgaming contract did not specifically prohibit Tusk from incurring other secured debts, it would be exceedingly improper for any bank or financing institution to accept player deposits as collateral.

So, even if the player funds are not ring-fenced and held in trust, it is very likely that Microgaming is the party that will gain control of these funds in a liquidation.

So what is happening now? Microgaming is waiting for the liquidator to determine the extent of the assets and liabilities of Tusk. As the primarily secured creditor (if this is the case), the liquidator would likely be appointed by or at least approved by Microgaming. This will take some time, perhaps days, perhaps a week or two in all liklihood. Then Microgaming, along with Tusk management and the liquidator, will work together to figure out how to get the largest amount of money for the assets in order to pay out players, pay any money owed to microgaming, and then pay other creditors. The sub-licenses to the skins are an asset that will likely be shopped to other established skins, as there is value there - although this value is quickly dropping the longer this takes.

If there isn't enough money to pay back the players - between the cash Tusk has and whatever amount someone is willing to pay for the skin sub-licenses or their player bases - then we need to rely on Microgaming to make us whole. Based on their past history, they probably will.

I've been through this once before, when Bet Holdem abruptly left the U.S. market and decided to close shop. It took 2 months for them to complete a sale to Bodog, and then our accounts were transferred intact. I envision a similar scenario happening here.

So the bottom line is - this sucks, but IMO we'll get our money. I have a significant amount tied up, and if there was anything I thought I could do to speed it up I would - but Microgaming knows its in their best interest to move as quickly as possible. They aren't slowing things down just to screw with us.

You play at the same online poker room you own/work at? For real?

great post MLSchaff

Today I've been checking out a few sites to see what their financial policies were and saw a red flag today for Pacific Poker....I also checked out other sites and decided to just copy/paste their policies in this thread:

Pacific Poker:

Secure Transactions

Intersafe Global, which provides financial transaction processing services for Pacific Poker, is a leading transaction provider, with millions of online transactions processed annually. Intersafe Global utilizes sophisticated RSA public/private key encryption technology to ensure the secure transfer of sensitive data over the Internet. All transaction and personal details are stored on secured servers, which are protected by the most advanced Firewall systems. This means that making a financial transaction at Pacific Poker is absolutely safe.

Compare this to Pokerstars:

PokerStars players' poker money and account balances are held in segregated accounts and not used for any of PokerStars' operational expenses. These segregated accounts are managed by a leading European bank. The arrangements ensure that PokerStars can at all times fulfill its monetary obligations toward its online poker players, and will provide further reassurance that players' funds are always secure with PokerStars.

Check out the ladbrokes statement:

3. Brand Reliability
Ladbrokes is the world's biggest betting and gaming company. It's size and reputation reassures players that they will be dealt fairly and paid promptly. Ladbrokes, unlike other sites, does not employ robot players, shills or house players.

Ladbrokescasino.com,Ladbrokes.com and Ladbrokespoker.com are part of Ladbrokes plc.

Ladbrokes (The largest off-track bookmaker with around 2000 high street Ladbrokes shops)

Other Betting and Gaming licences in Europe, Latin America, the USA, South Africa and the Middle East. Ladbrokes has led the way in not only meeting the most stringent licensing criteria for these various legal jurisdictions, but also influencing the guidelines to promote higher standards for consumers. No name delivers you greater reassurance than Ladbrokes.

Everything you need in one place, with just one account from a company you can trust Ladbrokes.com brings you the full spectrum of the exciting world of betting and gaming in one place, using a single account. And, because these services are brought to you by Ladbrokes, the world's largest bookmaker, you can be sure that your account will be handled with complete security, discretion and integrity. (Please note, poker accounts are limited to 1 per person. Any subsequent accounts will be closed and investigated by our security team).

Our Poker Site is monitored by independent auditors.

Full Tilt Poker:

Banking and Transaction Processing - Real Money

Full Tilt Poker conducts their banking and financial affairs in accordance with generally accepted standards of internationally recognized banking institutions. Full Tilt Poker follows and adheres to applicable laws pertaining to transaction reporting and anti-money laundering laws and regulations.

PartyPoker:

We are licensed and regulated by the Alderney Gambling Control Commission and the Government of Gibraltar. Our games are powered by the PartyGaming system which is tested by iTech Labs , an independent tester of gaming and wagering devices, to ensure that our games operate correctly, are fair, their outcomes are not predictable and that the system is reliable, resilient and otherwise up to the highest standards of software integrity, including: access control, change control recording, fingerprinting of the executables and regular monitoring of all critical components of the system.

Many businesses operate for extended periods of time despite being insolvent. As long as they have enough cash on hand to pay their bills it is very difficult for outsiders to recognize a problem.

It appears that may have happened here. Tusk is apparently in sole charge of its player funds. Quite possibly much of that money has been lost through bad investments, used to pay corporate expenses, or simply stolen. Quite possibly this happened a long time ago and Tusk has been covering it up ever since. That would be possible so long as enough money was coming in from new deposits and operating revenues to pay withdrawals and operating expenses.

The alleged terminations of BFP and R9s by Microgaming probably created a crisis. Suddenly all the players from two of the biggest skins were going to withdraw at once and how could they be paid? Tusk's true financial picture would be exposed and so they decided to give up and liquidate. Naturally when Microgaming finally realized the situation they revoked Tusk's license.

Let me emphasize that this is all speculation but it all fits together very nicely. It even explains why Tusk failed to heed Microgaming's warnings and deal with the alleged rakeback rogues. The flow of deposit money attracted by the rakeback deals may have been necessary to hold things together. Thus it had to continue despite the danger that Microgaming would eventually get fed up and take action.

We've been here before in late 2006. Betcorp (BetHoldem and others) was operating on the Microgaming network despite apparently being not being able to cover player deposits. The passage of the UIGEA created a crisis; BetHoldem suspended all U.S. accounts and refused to let us withdraw. Maybe Microgaming would have bailed us out but it certainly did not seem that way at the time. I don't even remember anyone seriously talking about that possibility and certainly Microgaming wasn't talking. I truly believe that if Bodog had not bought them out we would have been stuck.

It isn't remotely clear that Microgaming has the money to pay you guys if it wants to. Don't fall into the trap of thinking the network operator must be a bigger business than its skins. In reality Microgaming is a software and service provider and the skins are its true customers. Some of those big online gaming firms are probably a lot bigger than Microgaming itself. In turn the gaming firms themselves are much like banks. The sum total of all customer accounts is probably much greater than the owner's equity in the business. For example a perfectly solid casino might have $5M of owner money but $100M of player accounts. That's not a problem as long as the $100M is safe and sound but it's a disaster if the $100M is lost or stolen. The amount of money due to Tusk players may be far greater than anyone involved can possibly payoff.

The big difference between this and the Betcorp thing is that Betcorp was primarily a sportsbook, that happened to run a couple of poker rooms on Microgaming. Microgaming was not involved in the sportsbetting side at all, and therefore wouldn't have been in a position to bail out Betcorp's players - they for the most part they were not Microgaming players at all. This is also why the sale to Bodog was worked out. Bodog wanted the sportbettors. If their primary business had been the poker rooms, Microgaming may have stepped in and helped arrange the sale to another Microgaming skin.

Everyone needs to read thsi post. I agree with it just about 100% This si why we should be worried. This is why we need to be active and not just sit on our asses and assume everything is fine.

I'd assume putting pressure on microgaming is our best bet?

Yes i did play on the site in response to someones question. I did so because we have a skin on the network - this means generic software and some branding - thats as involved as we get (no access to any software), so yes I do play. The idea of our skin was for the players on out live tour to have a central online point to get together for our own online tournaments.

We paid $25,000 for this last June and have made very little back - If I could do it again I wouldn't.

I have had a feeling for a few months now that all has not been right at MPP's end - but I never imagined this would happen.

My own opinion is that MPP have ignored constant warnings from MGS about R9 and BFP - because they take a significant cut of the rake from these two - if they are removed from the network they that is going to have a huge albeit devasting effect on the finances of MPP. I personally don't feel they could survive without these two on board.

as I have already mentioned we are extremely small time (140 players on database) however of the other rooms under MPP Poker.i.e. and a few others don't actually seem to be in use anymore adding more weight to the fact MPP needed the traffic of BFP and R9 to exist. From the sheer number of players concerned about their significant bankrolls or even more significant levels built up through RB suggests that BFP and R9 had alot of serious hitters on their multi-tabling extensively mean $$$ for MPP that they simply could not get through the other rooms that operate under them.

I only hope MGS step in m- how I don't know? When I approached them last year about a room for our live tour they passed us onto MPP (hmm thanks for that) as we weren't big enough to justify a skin under their wing. They get a cut of the rake as do MPP and we got the rest minus any deposit fees / chargebacks.

We have never been told how or who holds the players money - my feeling is that it is MGS which is good news for the players if I am right.

As a room owner I have as much information here as I have from MPP or MGS which is an unbelievably poor show. Fortunately for us we have very few players with funds tied up in the site and also we have a client base that will now move to a new site albeit we will probably set up an affiliate deal now rather than take this route again so we can build on the online community that we have set in place in the last 9 months.

I am being completely honest about this as we do not need to unknown players happy (we persoanlly know all our active players) - I am giving you guys the perspective from someone who has been shafted by this from an owners angle but also has more of an insight from the information provided directly to me and how I have found the company in question over the last few months.

We can move on if the **** really does hit the fan as we have other businesses (though the $25,000 set up fee is a kick in the teeth for less than a year's service), I feel for the players who have significant amounts of money that are stuck in transit and for the other room owners who have been dragged into this and for them their room was their only/main source of income.

I assume that Microgaming does the transfers between skins' accounts as players win/lose money from each other, as I know some other networks do. That doesn't necessitate that Microgaming's accounts hold the entire player balances however.

F**k....F**k...@#%$^#@^%&!

YOU KNOW HOW LONG IT TOOK ME TO BUILT UP TO 16K???

I SAY WE GET A CLASS ACTION ON THESE M**F**KERS!!!!

thanks for writing that, u obviously know a bit about this stuff, and i appreciate the extra info.
i wondered though, when you say our accounts will be intact, do you think, my un-redeemed rakeback will also be intact? as its kind of my money, i just didnt redeem it as i didnt envission being screwed over, its kind of a large part of what iv earned playing at the site.

Just be happy to get the $ back if and when we do. IIRC I did not get unredeemed rackback in the Betholdem thing. Which is why I always cashed out my rakeback daily.

Stellar Wind makes good points as well. I just have a more optimistic view. I also don't think we are talking about even a remote possibility of a shortfall being on the order of $100 Million, as Stellar implies. As far as Microgaming being in the position to pay off balances if necessary - they have done it before according to others quoted in this thread. So at least there is precedent for it.

bleh, just wanna express my frusteration in yet another post.

here's my question. Why does everyone keep blaming Red nines and BFP? This is clearly a Tusk issue. Yes I read that letter that Tusk is blaming Red Nines & BFP, its supposedly some internal letter that Tusk put out??? Do you believe Tusk or do you Believe MGS?

This is in MGS's latest press release::

The Tusk group's "Safe and Fair" seals from the standards and player protection body eCOGRA were pulled some two weeks ago following the discovery of non-compliance irregularities on a routine on-site review by an eCOGRA professional team. Subsequently, Tusk advised Microgaming that it was seeking liquidation, leading to the termination of its software license from Microgaming.

This is the 2nd press release from MGS and again they clearly state that Tusk advised micro gaming they were liquidating and then MGS yanked them. They tell you RIGHT THERE why they were terminated.

So you are telling me that their eCOGRA were pulled from their casinos 2 weeks ago because 2 POKER sites were giving rakeback? There's just noway.

What annoys me is that there is no word from the poker sites. They have to know in advance that this is happening or going to happen. An email from a site reasurring its members all will be good would be the right thing to do. They cant just hide and keep quite. I dont know how this works but i downloaded purple lounge today and its got all the same players. I made a new screen name and registered at the end it asked was i ******** stating you can have only one alias on the network. So my name on purple lounge would be the same as on battlefield.

Why cant they just transfer the money or cash out to our accounts? Its clear that its all one big site it seems mad to think we wont get paid because it would be pretty bad for PRIMA as a whole if that did happen. Its just fustrating not to get more news from the guys who run these skins/sites. A clear your money is ok it'll just take time would do. Iam sure that you dont make peanuts from your sites so you should honor the cashouts aswell as the rakeback compinies who lets face it got us playing there in the 1st place.

Again, Tusk has issued no statement so far. You're apparently thinking of a letter posted here that's purportedly from Microgaming to Tusk informing them that two of their poker rooms would be terminated for rakeback violations.

That's from an InfoPowa news report, not Microgaming's latest press release.

So your theory is that the letter (which was from Microgaming to Tusk btw) dated 2days before the outage has nothing to do with this? It looks like it was the beginning of the recent sequence which led to all this to me. MGN notifies Tusk they are terminating R9 and BFP, then they negotiate for a couple days and Tusk decides to bolt and agrees to take the blame publicly.

How much traffic did the MPP Microgaming skins have?
Peak traffic yesterday, the day after the plug got pulled: 2016 cash game players
Peak traffic one week earlier: 2030
Source: PokerScout.com

But it seems like every one of them is a 2+2 poster. Not surprising for a rakeback-fueled group.

I think the fact that it's a Tusk issues seems 100% correct, however I believe you're drawing the wrong conclusion. I'd never heard of Tusk before this issue came up. My skin, on the other hand, was dealing exclusively with Tusk. They're the ones who should have noticed that something was going amiss with Tusk, and that's why there's blame to be lain at their feet.

That said, I do believe that the moral obligation ultimately lies with Microgaming. I'm interested in the theory that they may not be large enough to cover the player debts. I know they have casino interests too, but frankly I have no idea not financially "large" they are.

Also, MLSchaff, I'll admit I don't know how these things work, but while the biggest sole creditor might be MG, players as a group should be a much larger creditor.

And what if the staff that your skin was dealing with at Tusk didn't know anything about the impending disaster either? It is typical business to hide possible disasters from your staff if you think it could pose a risk to your business (and this looks like one of these scenarios).

I still think the skins wouldn't have known anything about this.

Every MicroGaming skin, including both those that were shut down and those that weren't, use the same pool of players. If the balances were all kept by one house, you'd have...PokerStars (or Full Tilt). That is the very definition of the skin. But the account balances are managed by the independent skin.

So your telling me prima/microgaming as a whole does at best 15000 players? with 20+ sites

My point is that MGS is very likely a SECURED creditor, and even more importantly probably have a blanket lien on Tusk. This means that they have the first claim on Tusk's assets, and would be intimately involved in the liquidation process. This would be a good thing, as MGS certainly has an interest in seeing that players are kept whole. As opposed to if there were a bank that had a first secured credit position, who would not care if players were paid.

The fact that players "as a group" may be a larger creditor than MGS is meaningless if MGS has a secured position.

40 something I think, but yes.