Pretty perfectly sums it up. Changed one word for clarity



But although it is 9 figures it's not huge. In my earlier ballpark figure for value at $300m 3 times earnings - Zynga is/was looking at a $20bn IPO - Whilst Fulltilt is unlikely to have the appeal of Zynga $300m potentially leaves a lot of upside if an investor can get agreements done with all of the people/companies/institutions/governments listed above.

But it takes a lot of time...

With the DOJ attempting to seize/have subject to forfeiture Lederer's and Ferguson's personal assets would that potentially have a big impact on the completion of a deal?

I could see a scenario whereby a new investor comes along and purchases Full Tilt for the cost of being able to pay out all RoW players. What about US players? Wasn't it mentioned that the current owners were willing to put some of their own cash back into Full Tilt if it could help accomplish the goal of getting a deal done?

Full Tilt seems like a decent investment if a new buyer doesn't have to put up the $150 million to cover outstanding US player balances and a reasonable deal could be reached with the DOJ. The problem with this theory is that I don't know if the current owners combined could put together enough money to come anywhere close to covering US player balances. Add to that the fact the DOJ has gone after Fergy's and Lederer's personal assets and it might make this idea seem even more far fetched.

Is it totally out of the realm of possibility the DOJ will be satisfied with the money they've already seized from FT? And if the DOJ is satisfied with what they've seized and the current owners can somehow come up with the funds to cover US player balances (and of course be willing to relinquish their control of those funds obv) I would think it highly plausible a deal could be consummated that would satisfy all parties.

I'm sure I'm missing some details so feel free to show me where I've gone wrong...

i doubt the average salary is 7k ...

the investors also need to sort out financing with their banks, french loan agreements are a bitch!

Thank you Noah and to those who added input. I think it was an important question to ask.

Ι don't know if you noticed, but the company didn't last.

This is pretty much a perfect answer, wish I could have found a way to make it that concise lol.
Obv any changes in any of the above, then force changes in other areas, etc etc. Its just isn't a quick fix situation, but the parties are still all talking with the same goal in mind, so that is a good thing!

First of all, your number wasn't originally 5 million per day.. it was 6 or 7 million. Notice how those numbers are different.

Second, you're still wrong. The actual rake number was around $2 million to $3 million/day.

Third, gross profit is an incredibly dumb metric of the profitability of a company.

Consider, for example, the fact that poker sites only raked roughly 40% of the money deposited on the site and that deposit and withdrawal fees range from about 2% to about 15% (AP/UB were apparently paying 20-30% for some reason). If we assume that 20% of the money deposited sits on the site (number out of my ass) and the remaining 40% is withdrawn, that means that a full 3.5x as much money is processed than is raked. So, a 2% deposit/withdrawal fee costs 7% of rake, while a 15% deposit/withdrawal fee costs almost 53% of rake.

Then, consider that affiliates were getting 35% of rake (and sometimes giving most of that in rakeback of course) for most of FTP's existence. Do you know what percent of rake was generated by affiliated players? I wouldn't be surprised if it's 30%, and I wouldn't be surprised if it's 90%, so that cost could have been anywhere from 10.5% of rake to 31.5% of rake. (And, of course, I assume that when FTP execs quote rake amounts, they count the rake generated from red pros, who actually made up a lot of volume and typically received 100% rakeback. So there's another massive unknown that raises the costs of doing business for FTP.)

Then there's bonuses and promotions which are another big chunk.

Those are all costs that are proportional to rake, and they're certainly not an exhaustive list. They could have varied from as low as, say, 25% of rake to as high as 85%.

Then there's the cost of running a business--having 700+ employees, giving them a place to work, feeding them, buying them computers, blackberries, etc. That cost them about $175M/year just for Pocket Kings, only one of their companies.

Then there's all their other employees, licensing fees, fraudulent deposits, chargeback fees, legal fees, taxes in a whole range of jurisdictions, etc.

Those are all legitimate costs. Then there are costs which were more discretionary such as their advertising and sponsored pros, their luxurious offices, loans to players, etc etc. Then there are the totally ridiculous costs that they should have been smart enough to avoid like theft from processors, the deposit shortfall, government seizures, etc.

Then, finally, there's the $10M/month in dividends. You actually have absolutely no clue whether or not FTP could afford to pay such an amount. Quoting gross rake figures--especially incorrect gross rake figures--really doesn't provide much insight into that.

If they come back, they better have an uber-duper-super software update.

This pretty much explains my skepticism that any potential deal ever finds its way to conclusion, as I think it's going to require $500m+ before even expending any money on building the new brand, and having to do so without access to a US player base. Remember, the initial outlays for all these sites back in the old days weren't nearly as high, and were scaled up as the sites grew. And didn't require, say, a half billion just to pay off old balances and civil penalties.

But weirder things have certainly happened.

this lol!

I heard a rumor some RUSSIANS were very interested.

This is not at all out of the realm of possibility, but DoJ won't be satisfied with the amount of money currently frozen, unless they're satisfied they've exhausted all possible avenues (e.g., located all additional potential Bitar/Federer/Ferguson back accounts, etc.) where such money may be hiding. Only DoJ knows whether they're at that point or not.

Well... it's complicated. Australia has what's called the IGA. It's basically like the UIGEA in the US--It makes providing online gambling illegal, but it doesn't make it illegal to play--except that it's much less vague. In spite of this, many poker sites still service Australia (though some do not), PokerStars even has offices there, and Full Tilt runs its largest promotional event there every year. These actions have come with essentially no punishmentt, but lately the Australian government has been threatening to do start enforcing its laws: http://pokerfuse.com/news/law-legisl...es-pokerstars/ http://www.news.com.au/technology/au...-1226059970964. It's conceivable that FTP could be fined by the Australian government some absurd amount of money ($1.1M/day for the entire time that FTP violated Aussie law).

The Australian government is also considering licensing and regulating online poker in Australia, which could be great for FTP if the regulations were favorable, could force FTP out of the Aussie market, could have virtually no effect, or could encourage the Aussie government to punish FTP for violating its laws for so long.

Incidentally, the Aussi government was probably the least significant entity on that list.

I thought the IGA was a supermarket

Wouldn't you think if the rumor about FTP being sold was in fact true that we would have heard it somewhere else by now? Over 12 hours later...

K...cool thanks Noah.
I'm an Aussie, The feeling I get from the govt here (particularly of late) is that they are having hard time with (live) sportsbetting and such, but are really not concerned with online poker so to speak, although they do lump it in with online casino's.
ATM the biggest debates/problems are over land based gambling (mainly slots) and online gaming as a whole is being put on the backburner.
With the exception of a few self righteous political wankers like Nick Xeno(whothe****canspellhisname)phon it really isn't even talked about as an issue over hear.

Beggars can't be choosers.

I mean.. online gambling wasn't really talked about in the US much before 4/15. Hell.. it was barely talked about on 4/15 or after 4/15.

Point taken.
I fear that the FTP saga will prick up a few ears (in govt) of those whom were selectively deaf before.
But they wouldn't impose fines etc...just regulate it.

Hope you guys gets your funds back. *Fingers crossed*.

For anyone interested in what sort of money can be made by an online poker site consider these figures from 2010:

Before anyone starts saying yeah FTP had way more players remember that FTP was getting no economies of scale as they had so much advertising/promotion/Pro's etc. An F1 team sponsorship for Pete's sake!

BWINPARTY - Poker Room Figures only:

Page 20 of annual report

Gross Revenues €166.7
Clean EBITDA 15.3%

888 Holdings

Investor Relations

Gross Revenues $38.4
EBITDA (I had to take out B2B and Casino/Bingo myself etc.) So around 10%

They're pretty small margins. If you have poor corporate governance it's really easy to screw up.

ft sold?

http://www.highstakesdb.com/2484-ful...been-sold.aspx

You're about 14 hours too late

Would be nice if Adam could clarify that article though.