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Thoughts on GBT/PokerStars purchasing FullTiltPoker

April 25, 2012

As we’re waiting for more news on what broke yesterday – White Tuesday, Red Tuesday, Super Tuesday as it’s been called so far –  whether the story of PokerStars buying the remains of FullTiltPoker is true, I might as well put my head out and write a little about my thoughts on the topic. To be honest, I don’t see how PokerStars would gain from buying FTP – except if it’s part of a settlement with the US DoJ following Black Friday.

First of all, PokerStars is by far the biggest brand in online poker – both when we’re discussing the number of players, the brand value and the software (that seems to be the general agreement). In that perspective, $750 mio. is a lot of money for a brand that no one really knows how the players will react towards, when it returns, but if it’s controlled by PS, it will probably quickly gain a lot of the trust back that players used to have in FTP.

Groupe Bernard Tapie pulls out

Anyways, we all got a little bit wiser yesterday, when Groupe Bernard Tapie announced their pullout of a deal to buy FTP because of  disagreements over such a deal with the US DoJ. Apparently GBT only wanted to allow players to withdraw their account based on their playing activity on the relaunched site, while DoJ insisted that all players should be allowed to withdraw within 90 days. I don’t know how GBT would think that such a procedure would have players regain their trust in FTP? It’s obviously a good point that it would force players to play at the site for at least some time, thus generating enough traffic to sustain continous supply of games and growth, but that just doesn’t seem like the way to go if you’re really serious about relaunching the FTP-brand. But GBT does not appear to be moving any further regarding FTP, so who will move in? Or will anybody?

Pros if PokerStars should buy FTP

Should PokerStars buy FTP it will of course offer an immediate boost to FTP, as PokerStars is among the most respected brands in the industry – if not the most respected brand – and that would offer FTP a good backing to get started with. Rumors are stating that PokerStars are willing to allow every player to withdraw their full account within 90 days without any further restrictions, which – as stated above – I believe is the by far best way to restart FTP in order to gain players trust again. But then again, it’s just rumors, and PokerStars are not commenting on the rumors at all except: “No comments”.

Purchasing FTP would of course be huge to PokerStars as poker players prior to Black Friday at least generally felt these were the – by far – best softwares, and I don’t see or hear any other softwares making such improvements that they would reach those levels. And there’s of course also the control of the two largest player pools (again before Black Friday) – not to forget.

Cons if PokerStars should buy FTP

As mentioned above, no one really knows how players will react to FTP returning, but with PS backing, it will probably not be the biggest issue. But still, you’ve seen before, that brands just can’t get through such issues.

Then there’s the legal issues. in GBTs announcement, they also mention that a major issue is the non-US courts, where most of the key assets of FTP is based. They fear that these courts might have another view on the issue and force a potential “acquirer of the assets responsible for all of those creditor obligation”, which GBT thinks is to big a risk, when considering the price tag. I’m sure PS will have considered these issues, should they purchase FTP, but it must be something to consider – unless it’s just smoke from GBT.

Then there’s the poker players. Aren’t online poker in general with as much competition in the industry as possibly? Less competition would in my opinion open up for worse promotions and less development in the services – Competition is the best reason to develop your services, innovate new services, offer good support and do a little bit more to attract customers. In Danish we have a saying that is something like: It would be like peeing in your pants to stay warm – I think for poker players, that it is very fitting in this case.

The competition issue is what the next section is about.

Potential antitrust issues

Even though the sites would function independently (as mentioned by you would think that there would be a lot of focus on whether the two sites are actually competing against each other. And with the new gaming legislations in EU and the following attention from the public, media and politicians, you would assume there will be a lot of focus from the EU on antitrust issues in the market, and even thought the EU might strike slow – they usually strike hard. Right, Microsoft?

There’s also the prospect of online poker in the US, which seems to edge closer and closer to a solution. You would expect everyone to want an open, competitive market, which I believe would also increase the US treasurer, and some also believes that filling the treasures after the crisis could be the main reason, EU countries are so interested in implementing new gambling legislation

So basically I see benefits for PokerStars, should a purchase of FTP go through, but are the benefits good enough for PokerStars to pull the trigger? There’s no benefits besides short term benefits for poker players – that’s for sure. I personally don’t hope (and think #fingerscrossed) PokerStars will buy Full Tilt, but feel free to add a comment about the pros and cons of such an investment. And to be honest, it is not just some random guys that broke the news, so I’m probably all wrong, misunderstood something (IANAL) or fail to see some benefits (or investor).

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