Microgaming Poker was launched in 2003, an offshoot of online gambling software provider Microgaming. Originally called "Prima Poker", it was rebranded to reflect the provider's name in 2006.

The Wikipedia Mirogaming entry makes interesting reading:



So, what happened?

On February 15th 2008, online gambling operation eCOGRA announced the suspension of eCOGRA seals from the six Microgaming casinos belonging to the Casino Action group:



The matter was also reported in the Casinomeister eCOGRA seals suspension thread.

On February 20th, a representative of Casino Action gave the following update:



This turned out to be a quite spectacularly untrue.


Just seven days later, Microgaming issued the following Tusk licence termination statement, reported by online gambling commentator Brian Cullingworth:



That eCOGRA had described the financial collapse of six casinos and twenty eight poker rooms as an "administrational issue", and failed to issue any pertinent warning as to the severity of the matter at any point, is just one of many damning indictments of the online gambling industry that were seen as this issue continued to play out.

A month later, Microgaming announced that liquidators had been appointed - see the 20th March press release:



On the same day, in the Casino Rewards adds six casinos to its network article, PR Web announced that the six casinos were to be taken over by the Casino Rewards group:



So, in the end things turned out satisfactorily for the customers of the six casinos.


But what about the customers of the twenty eight poker rooms? Who is responsible for paying these players their balances?


These poker rooms were all "skins", or "white labels", of Tusk Investment Corportation, operating their poker branch under the name "My Poker Profit". Skins are glorified affiliate sites which send players to the parent company (in this case, Tusk) but with no access to player funds, the financial side being handled exclusively by the parent company. The "skin" has information on player numbers and maybe other relatively trivial matters, but they have no control over the finances.


For an excellent operator's description of the skin concept, and other relevant matters, see the open letter to Microgaming written by one of the skin owners, Red Nines Poker:



The poker side of the Tusk collapse has been discussed at huge length in the 27 Microgaming skins to close discussion at the 2+2 forum. I have not read every one of the 3000+ posts, but what I have read represents little useful information; for the most part, players are expressing their general confusion and anger, and a hope that their balances will not be lost.


One startling fact to emerge from the discussion is that the skin operators appear to have been treated with the same scant disregard by software provider Microgaming as the players. If you look again at the Red Nines open letter:



This latter feeling is also expressed by the players, some of whom took it for granted that Microgaming would honour their balances - these comments are taken from the mighty 2+2 thread:



Unfortunately, notwithstanding the opinions and hopes of both players and skin operators alike, Microgaming has failed to communicate.


In mid-2008, six months after Tusk / My Poker Profit collapsed, Microgaming received a letter from a lawyer representing one of the players who had a large investment, notifying them of a proposed court action. The player in question reported the matter in this short 2+2 post:



So: no comment from Microgaming, apart from one denial of responsibility when they were forced to respond.

There are therefore two questions to ask:


1: Is Microgaming going to honour the balances of the players involved in the Tusk collapse?

They may yet, but it doesn't look good. They have been uncommunicative to all involved parties, and the one occasion that they chose to break silence was to deny any responsability. It may be the case that they are waiting for the liquidation to run its course, at which point they'll survey the damage and take the necessary remedial action.

However, since they know the numbers involved from the liquidation report (see below), they know exactly the extent of their potential liability and should therefore be able to give some sort of indication of their intentions. The fact that they have not done so suggests to me that they are not planning on making the players whole.

So it's not looking good.


2: Should Microgaming honour these balances?

This one's easy. Yes. Microgaming should compensate the poker customers of failed licensee Tusk Investment Corporation, notwithstanding the fact that, as the software provider, they have no legal liability. There are two reasons for this:

In the first place, it's the right thing to do and they've done it before.

It's the right thing to do because the players are, at the end of the day, customers of Microgaming. Players, for their part, then have the confidence of knowing that, whichever licensee or skin they're patronising, they are safe because Microgaming is safe. Good for Microgaming, good for the players.


When the Tropika group failed in 2001, Microgaming paid - see the Microgaming to pay all Tropika players thread from Winneronline.

When Goodfellas Casino failed, Microgaming paid - see the Goodfellas thread at Winneronline.


On these occasions, Microgaming did the right thing and should receive all due credit.

Why would they not now?


In the second place, Microgaming have resposibility for having directed the skins to Tusk in the first place - look again at the open letter at 2+2:



So, Microgaming specifically directed these potential skin customers to Tusk.

And Tusk failed.


If you look at the liquidator's report to creditors, you can see that during the financial year in which Microgaming recommended Tusk to skins Battlefield and Red Nines, they were hardly doing well - total profit $282,000 for the year.


Maybe in late 2005, when Microgaming made the Tusk recommendation to these skins, they were doing less badly.

Or maybe they only had the 2005 report to go by, which may have been better.

Or maybe Microgaming knew that Tusk was struggling, and tried to help by sending them skin customers. Now there's a thought.

Or maybe they didn't look at the figures at all.

However, at the end of the day, Microgaming recommended Tusk.


Assuming Microgaming fails to honour the players, they can they expect to receive around fifteen percent of their balances from the liquidation - the $1,400,000 cash in the bank against the $9,000,000 total creditors is about 15%.

Of that $9,000,000, the sum total of the poker player balances is a cool $5,312,923:

Hopefully, Microgaming will break silence on this and offer to compensate the affected players. If they do not, it will be their first failure in these circumstances, and it will send a big, fat, red warning to players that their deposits at Microgaming operations are no longer safe.

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The above is an authorised reproduction, with a few alterations and deletions (images) necessitated by the forum software, of Caruso's original article:

http://online_casino_news.hundredper...icensee-in.htm

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Cliffnotes:

-Microgaming Poker encourages new skins to use its white label company, TUSK Investment Corp, to handle player funds.

-February 2008, Microgaming revokes TUSK’s license and TUSK announces insolvency. A liquidation firm is appointed to handle the dismantling of TUSK.

-28 poker rooms handled by TUSK including Battlefield Poker and Red Nines poker are immediately frozen and no one has been able to move money since.

-All player money and skin sites’ money is immediately frozen and remains unattainable.

-Microgaming says nothing to anyone, not the players, skin owners, or liquidators.

-Their ONE response was to a player (bigt2k4) in response to proposed legal action in which they denied any responsibility.

-Finally after a year, the liquidators report that TUSK has enough money left to reimburse players only 15% of their Microgaming account balances.

-These players were Microgaming customers, and through their silence, Microgaming has made it clear they have no intention of reimbursing their players the approximate $5 million that they will lose

Excellent resume of the situation, but all you will get in NVG is tl;dr

Maybe you should have titled it "5 million stolen from poker players on Microgaming" and kept it shorter.

Unreal that this **** keeps happening....... Giving all the ******s who think poker is rigged or should be illegal more ammo to keep up the lame azz arguments on a daily basis.

GG life

If I ever get my 4k back I'm gonna spend it on the most ridiculous BS possible

or ****ing regulated

nice post skiier, ty

i have not followed the situation very much, but am of the opinion that no one will be receiving any funds from their accounts.

The title is designed to get google hits when anyone googles "microgaming poker."

There are also the standard cliff notes at the bottom.

I remember that

I ran up an $8k roll on RedNines HU tables and withdrew all of it literally days before the **** hit the fan

I run good

I dont understand how the casino's get reimbursed immediately 3+ times but the poker players get left to dry.

Both businesses are setup to make money, why not use the rake money to repay the poker players just like the BJ profits were likely used to repay the casino players.

Thanks for taking the time to put this together skier_5. It sucks that online poker exists in a netherworld that allow unscrupulous operators to get away with so many scams.

Great post

microgaming is a disgrace.

It still amazes me that people will willing put money on sites with names such as 'Hot Pepper Poker' and 'Mr Urban Poker'. For starters, are there any people playing at these sites?

I still have 190$ that I got as rakeback left on Red Nines. That was like 5% of my bankroll back then..

Agreed.

Their silence in this matter is beyond appalling.

Probably not many, most of it was at:

__

I vote for 4,000 copies of Moneymaker's book (must be some company with some left over they'd sell now for $1 each). Put them all on bookshelves at your house and whenever someone asks about them, respond with "I hate money".

I had like 10k there, burn in hell microgaming...

As a fellow alum of my school, I feel sorry for bigt2k4, who had something like $400k stuck on there, which was like 80% or more of his roll.

Because there's undoubtedly a much larger amount of money involved this time, and Microgaming's market share has been in decline for a long time, so while I 100% agree they should do it this time, as well, I think they are unlikely to do so.

Yes.

So what? Full Tilt Poker is an equally hokey name. Or Bodog Poker - what IS a Bodog, exactly?

Cake is my favorite and I am still not sure why it is called cake.

One error:

That was Tusk/Casino Action's description, not eCOGRA's (1, 2)

eurolinx ftw

If that number is true this is absolutely outrageous and not right. I feel so so bad for this guy.

hey guys I agree it's a great post that sums up this ****ty situation well, but I can't take credit for it. Caruso and soul rebel (and probably some others i apologize for missing) deserve the credit. I'm just the messenger.