FTP Discussion Thread (Everything but big new news goes here. Cliffs in OP) - Page 741 - Poker News

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FTP Discussion Thread (Everything but big new news goes here. Cliffs in OP)

View Poll Results: Do you want the AGCC to regulate the new FTP?

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03-01-2012 , 10:28 PM

#18501

RoyalGamer

grinder

Join Date: Jun 2008 Posts: 472

Quote:

Originally Posted by TheDarkElf

Right. They won't be paying anything for those US players. Of course they won't be generating any revenues from them either. And without the pros, FTP loses it's identity. Their the ones who drew the players to FTP.

Sadly you are just trying to prove your opinion... FTP is long past "losing identity".. the only question is can it gain new one.

03-01-2012 , 10:29 PM

#18502

Haupt_234

Carpal \'Tunnel

Join Date: Dec 2003 Posts: 6,097

Quote:

Originally Posted by thejayman

I'm sure they can trim most of the useless couple hundred of pros they were employing.

are you calling Steve Yea useless?!?!

03-01-2012 , 10:31 PM

#18503

pineapple888

Carpal \'Tunnel

Join Date: Jun 2005 Posts: 13,111

Quote:

Originally Posted by TheDarkElf

And without the pros, FTP loses it's identity. Their the ones who drew the players to FTP.

I'm not so sure about this part. Nobody I ever talked to, pro or recreational, gave two ****s about the "FTP Pros". I (and everyone else there) told exactly this to a Full Tilt focus group held in Vegas about three years ago. From what I can tell most of their success came from 1.) software and 2.) staying in the U.S. after UIGEA.

Based on subsequent events, I can only think their whole marketing strategy was a cash giveaway for extremely vague and stupid reasons. I think they did it mostly because they could.

03-01-2012 , 10:44 PM

#18504

TheDarkElf

veteran

Join Date: Nov 2010 Posts: 2,667

Quote:

Originally Posted by pineapple888

When FTP started, I was playing in a 5-10 Razz game with John Juanda. The table was full and there were 13 players on the waiting list. They didn't want to start another table - they wanted to play JJ. Less than 5 minutes after he left, the table was gone - everyone, both the players at the table, and on the waiting list, left. And you don't have to go far to find people who "hate" Ivey now because he was the reason why they started playing FTP, and he let them down (at least in their minds).

To be fair, both of your reasons are valid, although I think you numbered them in the reverse order.

03-01-2012 , 10:46 PM

#18505

coolnout

Carpal \'Tunnel

Join Date: May 2009 Posts: 12,430

Quote:

Originally Posted by pineapple888

what? FTP's high stakes action always had tons of spectators. It was absolutely crazy during the Isildur1 sessions. Their pros were extremely visible. I remember Ivey busting out of the Main Event final table and 15 mins later he was home and playing on FTP. Poker After Dark was basically a big infomercial for FTP. Their pros got people comfortable with the idea of depositing and playing online. They brought many people in the door.

03-01-2012 , 10:47 PM

#18506

EYESCREW

Carpal \'Tunnel

Join Date: Mar 2008 Posts: 11,634

Quote:

Originally Posted by thejayman

If you count the $120 million in phantom deposits and $115 million the DOJ has seized. FTP should have made $400 million over the last 4 years.

FTP2 won't have to deal with higher process fess from U.S players and I'm sure they can trim most of the useless couple hundred of pros they were employing.

FTP was scammed by phantom depositors and those deposits have absolutely nothing to do with the earnings potential of the site as they'd have never been made if the people had to actually have real dollars taken out of their bank accounts.

03-01-2012 , 11:49 PM

#18507

DoTheMath

Pooh-Bah

Join Date: Jul 2006 Posts: 4,689

Quote:

Originally Posted by NxtWrldChamp

Just curious how you are getting to this 8M/annually #? Is that a joke?

http://www.forbes.com/2010/02/10/int...okerstars.html

Here is a glimpse of the profits these beasts were capable of. Estimated $500 million for stars in profits from 2010. FTP was smaller and I think a decent consensus was somewhere in the $350 million range.

I have no idea how much of each poker sites business came from the USA, but my guess is if Tapei takes it over they can manage to make more than 2.5% of what FTP made in 2010.

So yes, I would agree with ShipYo in saying you are delusional if you think FTP2 would only make 8M a year.

When you start with garbage assumptions, you end up with garbage conclusions.

FTP is not Stars.
The $500M estimate for Stars was unfounded. An estimate of $350M for FTP in 2010 is delusional. It only begins to make sense if you don't include the seizures, the thefts, the phantom deposits, the high cost of payment processors, the deposit bonuses, the rakeback, and the advertising budget. While it certainly does look like FTP didn't include some of those expenses when it calculated distributions to shareholders, they are actual costs and ate into real profits tremendously.
FTP distributed $440M to its shareholders over 4+ years. They didn't have a lot of retained earnings kicking around in the company. That would argue that FTP profits were about $100M per year, EXCEPT, they ended up over $300M in debt. So actual net profit looks a lot llke ~$125M ($440M - $315M) spread over 4+ years, or about $30M/year.
With the loss of the US market, they lose half their rake. I'm estimating they are also going to lose about half their ROW market due to loss of confidence, cash-out, and national license requirements. So rake is down to about 1/4 of what FTP had. Individual expense categories will not drop proportionally with rake. The cost of processing payments will drop more than rake, but the cost of most other previously existing expenses will not drop proportionally to rake. Most espenses will not scale with number of customers. I think I am being generous to estimate that their margin will remain the same. FTP2 will also have the new expense of financing the FTP1 player funds, since they won't be be getting deposits to cover these.

I actually think Tapie will make next to nothing in the first couple of years of operation, but the investors who put up the money to cover player deposits will make a fair return on their investment. Tapie won't start to make much money until he has returned the capital of those other investors.

03-02-2012 , 12:03 AM

#18508

knef

grinder

Join Date: Apr 2009 Posts: 615

Quote:

Originally Posted by TheDarkElf

"Should of" doesn't count...

Unbelievable, his grammar was right (as in 'should have', 'should have') and you still managed to 'correct' it to the atrocious "should of".

03-02-2012 , 12:54 AM

#18509

yesright

old hand

Join Date: Feb 2009 Posts: 1,345

Quote:

Originally Posted by DoTheMath

When you start with garbage assumptions, you end up with garbage conclusions.

FTP is not Stars.
The $500M estimate for Stars was unfounded. An estimate of $350M for FTP in 2010 is delusional. It only begins to make sense if you don't include the seizures, the thefts, the phantom deposits, the high cost of payment processors, the deposit bonuses, the rakeback, and the advertising budget. While it certainly does look like FTP didn't include some of those expenses when it calculated distributions to shareholders, they are actual costs and ate into real profits tremendously.
FTP distributed $440M to its shareholders over 4+ years. They didn't have a lot of retained earnings kicking around in the company. That would argue that FTP profits were about $100M per year, EXCEPT, they ended up over $300M in debt. So actual net profit looks a lot llke ~$125M ($440M - $315M) spread over 4+ years, or about $30M/year.
With the loss of the US market, they lose half their rake. I'm estimating they are also going to lose about half their ROW market due to loss of confidence, cash-out, and national license requirements. So rake is down to about 1/4 of what FTP had. Individual expense categories will not drop proportionally with rake. The cost of processing payments will drop more than rake, but the cost of most other previously existing expenses will not drop proportionally to rake. Most espenses will not scale with number of customers. I think I am being generous to estimate that their margin will remain the same. FTP2 will also have the new expense of financing the FTP1 player funds, since they won't be be getting deposits to cover these.

this seems like a perfectly reasonable assumption based on the facts/numbers as we know them.

Its possible that GBT isnt even looking past the first year.

Maybe they are hoping to get everything up and running and then sell on a quick flip as a viable running business?

03-02-2012 , 01:11 AM

#18510

blackfriday415

adept

Join Date: May 2011 Posts: 1,174

I propose that if you truly want ftp to reopen you show it!

No more posts in this thread untill we hear something from gbt, ftp or DOJ camp!

Let the silence begin!

03-02-2012 , 01:32 AM

#18511

yesright

old hand

Join Date: Feb 2009 Posts: 1,345

Quote:

Originally Posted by blackfriday415

I propose that if you truly want ftp to reopen you show it!

No more posts in this thread untill we hear something from gbt, ftp or DOJ camp!

Let the silence begin!

maybe FTPDoug will make a comeback?

03-02-2012 , 01:36 AM

#18512

tamiller866

Pooh-Bah

Join Date: Oct 2008 Posts: 3,651

Anyone remember this:

Quote:

The Team Full Tilt members have all made commitments to contribute their time and energy teaching others how to become better poker players, as well as increase their enjoyment of the game. Users can play against Team Full Tilt members for free by logging onto www.fulltiltpoker.com and joining the game. Laws and regulations permitting and when users feel ready, they can also play against Team Full Tilt members in low-stake, real money games, courtesy of Vert Enterprises. Any money won by Team Full Tilt members in those games will be donated to an international charity by Vert Enterprises.

TiltWare, LLC and World Famous Poker Players Launch Full Tilt Poker - The Next Generation of Online Poker Software

03-02-2012 , 03:36 AM

#18513

jrryjrryjin

journeyman

Join Date: Jan 2009 Posts: 254

Quote:

Originally Posted by DoTheMath

[*]FTP distributed $440M to its shareholders over 4+ years. They didn't have a lot of retained earnings kicking around in the company. That would argue that FTP profits were about $100M per year, EXCEPT, they ended up over $300M in debt. So actual net profit looks a lot llke ~$125M ($440M - $315M) spread over 4+ years, or about $30M/year.

Leaving out seized money and phantom deposits in your equation doesn't lead to a sound projection of future profitability. It's likely that there are other variables that could increase profits as well (not revenue).

Just out of curiosity, do you really not realize that or are you just posting whatever suits your point?

03-02-2012 , 03:41 AM

#18514

chinamaniac

Pooh-Bah

Join Date: Nov 2009 Posts: 3,720

Well support is still available and rather than waiting 2 days like I used to I waited less than 30 minutes to hear from them this time. Still waiting to hear back again

From: China
To: support@fulltiltpoker.com
Subject: Cashout
Date: Fri, 2 Mar 2012 02:00:24 -0500

Hi, I just tried to login to full tilt so I can play and it is not working. Any idea what's going on? I have quite a few dollars on the site and am looking to either play or cash it out. Any help would be great.

china

> Date: Fri, 2 Mar 2012 07:09:46 +0000
> From: support@fulltiltpoker.com
> To: China
> Subject: Full Tilt Poker - Account Query
>
> Hello china,
>
> We apologise but the system is currently down. Please check back later.
>
> Regards,
>
> Gearoid
> Full Tilt Poker Support

Will it be back up any time within the next few hours? I am looking to play tonight and have no other options and all of my bankroll is there.

Could you tell me my acc balance please? I don't want it getting screwed up if you are doing server maintenance or something.

03-02-2012 , 03:57 AM

#18515

Howard Beale

Formerly red

Join Date: Sep 2005 Posts: 22,190

Quote:

Originally Posted by Chinamaniac

Please check back later.

03-02-2012 , 04:06 AM

#18516

thejayman

journeyman

Join Date: Jan 2008 Posts: 224

Quote:

Originally Posted by DoTheMath

When you start with garbage assumptions, you end up with garbage conclusions.

FTP is not Stars.
The $500M estimate for Stars was unfounded. An estimate of $350M for FTP in 2010 is delusional. It only begins to make sense if you don't include the seizures, the thefts, the phantom deposits, the high cost of payment processors, the deposit bonuses, the rakeback, and the advertising budget. While it certainly does look like FTP didn't include some of those expenses when it calculated distributions to shareholders, they are actual costs and ate into real profits tremendously.
FTP distributed $440M to its shareholders over 4+ years. They didn't have a lot of retained earnings kicking around in the company. That would argue that FTP profits were about $100M per year, EXCEPT, they ended up over $300M in debt. So actual net profit looks a lot llke ~$125M ($440M - $315M) spread over 4+ years, or about $30M/year.
With the loss of the US market, they lose half their rake. I'm estimating they are also going to lose about half their ROW market due to loss of confidence, cash-out, and national license requirements. So rake is down to about 1/4 of what FTP had. Individual expense categories will not drop proportionally with rake. The cost of processing payments will drop more than rake, but the cost of most other previously existing expenses will not drop proportionally to rake. Most espenses will not scale with number of customers. I think I am being generous to estimate that their margin will remain the same. FTP2 will also have the new expense of financing the FTP1 player funds, since they won't be be getting deposits to cover these.

In the last four years, net profit was around $135 million. If you inclued the 120 million in phantom deposits and $125 million that the DOJ seized, the company would have made around $95million per year (135m+120m+125m/4=95m). Obviously GBT should not have these problems. IF GBT losses half of their player base, they therefore should still make around 50 million per year.

03-02-2012 , 04:28 AM

#18517

duh

Pooh-Bah

Join Date: Aug 2005 Posts: 5,741

Can anybody post a link to FTP's net profits from a reliable source? Does such a source even exist?

03-02-2012 , 04:28 AM

#18518

Blizzuff

veteran

Join Date: Jun 2009 Posts: 2,713

Quote:

Originally Posted by thejayman

IF GBT losses half of their player base, they therefore should still make around 50 million per year.

wtfmath

03-02-2012 , 04:39 AM

#18519

oneonth3run

old hand

Join Date: Apr 2011 Posts: 1,648

Noah made a solid post about this back in November:

Quote:

Originally Posted by NoahSD

In the following post, I'm going to speculate, leave lots of factors out, etc etc. I probably shouldn't do this because somebody's going to like write some article somewhere or something "NoahSD says that this is 100% true," but whatever, I think this is a pretty important point to make:

FTP's owners paid themselves $440M over 4 years. They stole somewhere on the order of $300M from players. (The actual amount stolen from players is still unknown.) So, if you don't include stealing from its customers, the company actually earned a net profit of roughly $140M over 4 years.

That's kinda like pathetic and stuff and much smaller than we all would've assumed. Part of that is probably because they paid themselves and their buddies in other ways that aren't included in the $440M, such as salaries to themselves, dividends from companies other than Tiltware, absurd salaries to their buddies, etc. But, let's use it as a baseline and look at some of the huge costs that they had:

* $159M DOJ seizure.
* $128M donation to US players for ****s and giggles I guess.
* $42M stolen by one payment processor (and likely more stolen by other payment processors).

All of those are costs associated with the US market, and they add up to $329M. (It ain't no coincidence, of course, that this number is very close to the number that the AGCC said was seized by the DOJ. They apparently can't distinguish between things like that.) So, if the US market had been less "questionably legal", it seems fair to say that they would've made $469M over that same period. That's $117M/year.

That number makes so much more sense, right?

Of course, there are tons of other costs that are much higher for US players than for non-US players: payment processing, legal costs, even marketing. And, of course, FTP was run about as stupidly as possible, so there are tons of simple ways that anyone who was half-competent could have raised profits or lowered costs. They could have, for example, not loaned David Benyamine some absurd amount of money and then let him pay it back by paying him an absurd salary to wear a patch. But, whatever. Let's just stick with this number.

I believe the standard estimate for US vs. ROW rake on FTP is 40% US, 60% ROW. So, if FTP suddenly lost all its US players on April 15th but received no hit to their reputation or lost any customers as a result of the shrunken player pool, it seems reasonable to assume that they would have earned about $117M * .6 = $70M/year.

(You might notice that this means that this implies that the US market actually cost FTP money. This is certainly possible, but remember that for a very long time FTP generated much more than 40% of its rake from the US. So, my $70M/year number is not the number that FTP would have earned if it juts stayed out of the US but rather the number that it would earn if it left the US on 4/15. Note that this also implies that this number is an underestimate because the effects of US processing fees are exaggerated by the high % of US rake in earlier years.)

But, it did receive a hit to its reputation, of course, and it will lose players as a result of its shrunken player pool (since more players makes more liquidity, which attracts more players). Let's say that that hit will cost it 65% of its revenue, leaving it with $25M/year.

Again, this is likely a low estimate because I didn't consider basic cost-saving/anti-stupidity measures and I was pretty harsh with most of my numbers. So, let's bump it up to $30M to account for some of that. I still think this is likely a low estimate.

Now, we don't know the terms of the deal yet, but say a reasonable estimate for how much Tapie is planning to pay is $400M. You can think of that as a repayment of players plus $100M to the DOJ (in addition to the money already seized), or you can think of it as repayment of ROW players plus a $250M fine to the DOJ, who then repays US players. Either way, it still costs roughly the same amount.

Well.. that's 7.5% interest on his money, assuming no growth at all, with relatively pessimistic numbers, and not accounting for appreciation of the underlying assets. That ain't bad, right? And, of course, that ain't even mentioning possible ways that Tapie could use the company with his existing holdings (which apparently is a huge selling point for him).

So, I mean, when people say that repaying players (whether partially through the DOJ or not) and paying a DOJ fine isn't worth buying FTP, I think they're just wrong. If I had a networth greater than, say, $3 billion, I'd buy the thing myself if the actual books numbers looked anything like what I just laid out.

(Some people will doubtless read this post and think "But, once he gives that money to the DOJ/ROW players, he can't get it back." These people don't understand what it means to buy a business. When you buy a business, you typically give your money to somebody else who then takes that money and buys a gold-plated house or whatever. In exchange, you get the business. In theory, you should be able to sell that business to someone else for roughly the same price, but in practice, that's sometimes/often not the case.

The same exact thing is true (though to a lesser extent) when you buy a stock. There's no guarantee that you'll find someone who's willing to buy it back from you if you feel like selling it (especially if you trade in weird obscure companies). Investments aren't bank accounts, and people who buy companies for a living know that.)

03-02-2012 , 04:42 AM

#18520

GutshotDan92

veteran

Join Date: Apr 2011 Posts: 2,065

Quote:

Originally Posted by Chinamaniac

I'm going to assume this is a joke...?

03-02-2012 , 04:44 AM

#18521

Howard Beale

Formerly red

Join Date: Sep 2005 Posts: 22,190

Quote:

Originally Posted by duh

Can anybody post a link to FTP's net profits from a reliable source? Does such a source even exist?

IDK if it can be said that there were any net profits when it appears that current liabilities roughly equal past distributions. That's a wash to my way of thinking. But then there is the 'what if' question of how would things look like w/o the DOJ processor seizures and the phantom deposits. I think that, at this point, the people that best know what the 'profits' actually were is GBT.

03-02-2012 , 05:02 AM

#18522

tamiller866

Pooh-Bah

Join Date: Oct 2008 Posts: 3,651

Noah went over this topic when the agreement was announced:

Quote:

Originally Posted by NoahSD

Pocket Kings financials:
http://www.subjectpoker.com/files/ex...d-Accounts.pdf

03-02-2012 , 05:05 AM

#18523

Rich Ghost

enthusiast

Join Date: May 2011 Posts: 81

Anyone got any actual news?

03-02-2012 , 05:28 AM

#18524

duh

Pooh-Bah

Join Date: Aug 2005 Posts: 5,741

Keeping in mind what we now know about this company and what they are capable of, does anybody else think it's ridiculous to believe anything contained in a financial report written for investors?