I, along with probably everyone else in the United States, filled out a bracket for March Madness, but I didn’t join any pools this year, mostly because I felt ill prepared and didn’t give much thought to college hoops this year. To me, it didn’t make much since to try to put any money pride down based on a strategy I hadn’t fully thought through.

So you can imagine my amazement when something as simple as not putting my bracket in a pool draws parallels to the growing clusterfuck that is the Federated Sports and Gaming situation. Ever since Wicked Chops posted some of the bankruptcy documents on their site, there has been a sense of inevitably that attempts at “reorganization” are likely going to give way to “liquidation”. After all, the company has debt in excess of $5 million dollars, despite having $15k cash in the bank and another $115k in other receivables. If you combine that…it stills means that the debt:cash ratio is a staggering 38:1, of course this is before you take into account the assets that are the Heartland Poker Tour and the Epic Poker League (and maybe the Global Poker Index, but I can’t imagine that IP being worth too much).

Yes, it is a little unfair to exclude the assets from that ratio, and it would bring it down a fair bit, but it does get worse, what with FS+G not paying All In all the money for the acquisition while taking money from Pinnacle Entertainment in order to pay down the acquisition costs…something they have not yet done. Add on top of that the fact that they seemingly haven’t paid anyone the full amount of money owed, and you have to wonder if the players were actually the only people that did get paid out of this deal. I am no expert on bankruptcy proceedings and I freely admit that, but from a layman’s perspective I can’t see Federated surviving without a serious miracle, and even if it does it doesn’t look like anyone would be willing to throw $1.4 million  at players after the “long runway” didn’t even last past 3 events (and presumably less, given all the creditors).

I was sold on the idea of a professional players league that gave back to the players because, at its core, it was a good idea. Unfortunately the amount of money you would need to survive the initial red ink it probably somewhere in the high 8 digits, and even then you might never get profitable in today’s poker climate. Daniel Negreanu’s assertion that Jeffrey Pollack was a snake oil salesman may be true from his point of view, but I’m not willing to take that line. (As I’ll elaborate later…) Jeffrey and Annie Duke gave me a writing job that I didn’t ever expect to get and never gave me the impression that they were out to screw me or the players. Whether that was a facade or not I have no idea, but I just have a tough time spewing hatred at any one person, because I never got the impression they would do something like this.

And yet they did.

War of Words

Thursday made things much more interesting, with an article from Cardplayer going into greater detail of just how screwed FS+G looks to be at this stage in the game. The fact that FS+G owes what they do is not surprising, and as stated earlier the issues with All In, the HPT, and Pinnacle Entertainment have just highlighted the problems that Federated has been having over the course of their operation. To make matters worse though, Cardplayer cited court documents suggesting FS+G wanted roughly $170k per month for employee salaries, using cash collateral from Federated Heartland to pay for it. For its part, the HPT was requesting $112k for the same period, and in either case this was immediately objected to by All In Productions. In the end, a much smaller amount, $45k, was given for the month of March, which was about 1/7th of the budget they had requested initally. Clearly, the courts aren’t looking too fondly on the situation, and with as little cash as Federated has right now, I am not surprised.

Federated, for its part, didn’t look too fondly on the Cardplayer article, and issued a press release and elaborated the situation to Pokernews the next day.  Early in the article, Cardplayer suggested that reorganization plans were being rejected by the court, and I would tend to think that was a misstep on Cardplayer’s part. I don’t think wages for a company in bankruptcy qualify as part of the reorganization that readers care about, so it was a bad generalization. But with court filings on paper stating that FS+G tried to get much more than $45,000 per month for their budget, they suggest that the reorganization budget was what they had planned all along. When the filings say that you initially requests one number, and got a different, much lower number, it usually means your number was rejected. Unless of course you metaed the judge by giving a number way higher than you needed…in which case well played. Cardplayer was quick to point this out, linking to the exact documents that they needed to prove their case. FS+G said that no one contacted them regarding any of this, but in Cardplayer’s defense there really wasn’t a need to when everything was in black and white.

The first, most low hanging fruit is the Federated budget, which you can find on page 11 of this document, that details the not $45,000 reorganization budget. The second, and this is the most amusing, is the All In response. When you can say this in a filing:

(b) explains the exorbitant salaries and wages requested.

you pretty much don’t have to make your case. Basically All In rejects the idea of using HPT revenue for FS+G expenses, which, in fairness, is what I thought they bought the HPT for in the first place. But since the HPT hasn’t exactly been completely paid for yet (a point made by CP, refute-confirmed by FS+G, and confirmed again in court filings), its hard to be allowed to use what is effectively collateral against that unpaid debt for your own expenses. With the $45,000 budget basically covering anything non-wage related, I don’t see employees (or contractors) getting paid much this month, if anything. Which, it had better, and telling us this in a press release can be met with a “well no kidding” when you look at the difference in requested and accepted budget.

The point of all this is that when you say “oh we expected this”, and its this easy to call you out on it, it brings the rest of your statement into question. Sure, Epic Poker the site is still out and chugging out content, but the tour is on life support, and since the fourth event and freeroll are two months overdue, its safe to say the door are closed pending some hail mary. The fact is, while Cardplayer may be guilty of some hyperbole and making poor guesses, the article itself was pretty dead on. There is more I could say about this but I think its better to read the court documents for yourself and draw your own conclusions.

Snake Oil Anyone?

This brings me to a worrying conclusion that I arrived at after reading this press release. It read, to me at least, as somewhat defiant, that “things aren’t as bad” even though both Cardplayer and the FS+G release said largely the same things. When was the last time we had something like this happen? Oh yea, Black Friday, when Full Tilt and UB would send out press releases that always said “of course we will pay everyone back” and now FTP is in the “please God one time” phase and UB is beyond dead. I’m not saying that FS+G is in any way the same, its just that the release left the same bitter taste in my mouth. And that’s not a good thing for the company.

Daniel Negreanu made a point in his Weekly Rant vlog that he felt Jeffrey Pollack in particular was a snake oil salesman and would make a better politician than executive. He contended that the WSOP has actually got even better and that at least people weren’t getting turned away from the main event. I think this is totally revisionist history on Daniel’s part. If this was a widely held opinion pre-Federated, I haven’t heard it, and in fact I even remember people fawning over the fact that he was the Chairman of the company and was going to help run EPL. His track record at least up to the end of his WSOP tenure was not poor, NASCAR and the WSOP both went in positive directions during and after his tenure, so its unlikely he didn’t know what the fuck he was doing. That said, as with many things related with Epic, its hard to sell a business model like this, and I think some of his criticisms come from his very obvious disdain for the (former?) commissioner of EPL, Annie Duke. As much as I give FS+G shit for completely screwing things up, I have never been given the impression that they wanted Epic to fail just for an easy 1 year paycheck, that just doesn’t make sense to me and shouldn’t make sense to you.

Simultaneously there is talk that the people involved in Epic Poker’s monumental collapse should be “excommunicated”, or at least the two faces that we can recognize (Annie Duke and Jeffrey Pollack). For sure even if the first season can be salvaged this bankruptcy hasn’t been good for poker(tm) and is dragging down a great entry-level poker brand in the HPT, but it by no means is the worst thing to happen to us either. The company was run poorly, yes, and I know there are probably arguments that can be made that this is like Full Tilt, only replace player accounts with player equity. But the company was never able to capitalize on the players being at the events, and they certainly weren’t making any money on the events they were running, so I don’t know if there is a way you could compare the two. I mean…at least Full Tilt was making money…FS+G can’t really claim that. But it’s really easy to grab our torches and pitchforks and assume the worst because, lets face it, that’s how we have grown to expect our poker scandals to be, nothing but the worst.

What Went Wrong?

I suppose the question I would like to see answered, but probably never will, is just how they spent the money they did. Even if they were paying themselves way more money than a startup should, I can’t see that being the sole reason the company ate it so quickly. Without any basis in reality and completely without evidence, here is one plausible chain of events:

• They had what they thought was a “long runway” of startup cash and did indeed hope that the brand recognition of the players and online poker sites.
• Black Friday happened, but rather than re-evaluate, the company made its first gamble, that US regulation was going to come as a result of the charges, which would allow poker to be better received by both TV and the masses. Admittedly we got more coverage in the media from all this, but it was not the kind that was going to spur legislation.
• The company gambled further that ratings would be high enough over at CBS to justify not needing to time buy for long, unfortunately Saturday/Sunday afternoon slots in the fall don’t usually win you many viewers in the US (football season anyone?)
• FS+G then acquired the HPT on what was effectively a loan, assuming that the HPT could fund other FS+G ventures (that would never have happened).
• FS+G ran its events exactly as planned, but likely accrued much higher costs than it had anticipated. The relationship between FS+G and the Palms was, as suggested by Quadjacks, quite strained, so that may have contributed to the beginning of the end.
• Finally, a combination of bad press (see every single Conduct Committee decision), lower turnouts, and poor execution likely caused the final blow, an investor pulled out and refused to give any more money to the venture, either just before or during the 3rd event.

That last one is the one I really, really want to know. My current running theory is that Epic did have enough money to make it to the end of the year…and then likely file Chapter 11. The problem is that someone the board might have gotten skittish and decided to quit while he was only slightly behind and bolted. The problem with this theory is, in fact, the massive scale of the debt as well as some of the delays in payment with All In as early as October 2011. I want to cling to this because I find it hard to believe that people could be this bad with money, but I guess you never know. (My finance degree is currently rocking in the corner saying to itself “The economy is based on rational decisions…the economy is based on rational decisions…)

For My Part…

As a columnist for Epic Poker (a position I do not anticipate getting back, if nothing else than because my job is definitely expendable), I met a lot of good people, and my interactions with Annie and Jeffrey were way more positive than other people seem to think they would/should be. I did not, and presently still don’t, feel like they were out to screw investors for a quick payday, because, hell, I got paid way more than the rest of the poker industry would pay for written work. Its an unfortunate by-product of the way money outside of playing is generated that the poker media gets paid garbage, and Epic was genuinely trying to change that. That said, I feel that mentality spread to the top management, who were arguably getting paid  more than the  $2.6 million in overlays should have dictated. Do I know what was acceptable? Hell no. Heck, if I find out they got paid next to nothing (and I mean actually next to nothing, not “the 1%” next to nothing), then I will retract that statement right then and there. But for a company of 22 employees, that was an awfully high salary figure coming from that initial budget. If it included Federated Heartland’s payroll, I will concede that point as well, but I have been under the impression it isn’t.

I am not a disgruntled employee, and as you have seen up to this point I am operating under the same amount of information as all of you. I do have an outstanding invoice with Epic (my own damn fault for submitting it when I did), but as someone in the computer industry I know that sometimes startups fail. While I would be happy to eventually get paid for my work, I recognize that I’m not high on the list, and with FS+G’s initial budget having room for expenses (that was likely cleaved in the revised version) I don’t think they wouldn’t try to pay me if given the opportunity. Naive? Probably. But I just don’t have the evidence to support the notion that I’m getting screwed. I mean, what could I do to Annie and Jeffrey for things truly went under? Not sure I’d have to do anything. The failure by itself will blacklist them from future poker endeavors, at least in the short and medium term. In the long term, maybe they can take a crack at it, but its just not likely, the damage has already been done.

I for one to not think that Epic Poker will come back. I feeling like the HPT and some of the non-tournament EPL stuff may survive, but that’s about the extent of it. I find it hard to believe that the creditors would be willing to put another $1.4 million into the company (and that’s WITHOUT including the expenses of actually hosting the tournament). Sure, the folks at FS+G will try, but ultimately I don’t think they will succeed. They might be able to get out of bankruptcy protection intact, but not enough to host another tournament, at least not the one they planned. If they do, that would be a HUGE win for the company, because that would be happening against all odds. In either case, the great “Players First” experiment is going to die after one season, its just whether it dies at the end or in the middle is all we are squabbling over right now.

It would be nice to see players get the kind of treatment that Epic Poker was promising at the start. Unfortunately, it doesn’t look like it will be Epic that will be the ones doing it, and that’s sad for the entire industry.

Federated Sports and Gaming Bankruptcy Docs Released

My big mouth pretty much guaranteed I was going to write something much more substantial on this. Needless, to say the story isn’t getting any better. If you need a primer, check out the Cardplayer articles in the grade section.

Final Grades:

• Cardplayer – A: Less for putting out the story and more for responding to the FS+G press release claiming they got their facts wrong by linking the very documents they got the information from. See, if Black Friday taught us anything, its that we will find a court document on poker related issues.
• FS+G – F: Public perception being the king here, they didn’t help their case with the press release situation. That’s on top of the documents showing a multimillion dollar debt and some pretty annoyed creditors.
• Matt Glantz’s analogy – F: Upon further review, the penalty has been change from 3rd and long to 4th and Outside the Stadium. He didn’t know it at the time, but I refuse to acknowledge that

States Go No Steps Forward, Two Steps Back

Last week I gave out some not-so-flattering grades to a few states for their efforts in online poker, even New Jersey because I hadn’t heard much from them regarding online poker. Well, turns out I was right to be paranoid, because the “expected passage” has been pushed back from March to April, after the Governor’s office took issue with some of the requirements in the bill. Its not the worst thing that could happen, but delays like this can snowball…so hopefully this is the last time. Moving to the midwest, while Iowa did pass the online poker in the State Senate, the Assembly is having none of it, with the Speaker saying it doesn’t have much of a chance of getting through that chamber. Both sides of the aisle are willing to admit its not a partisan issue, and the Speaker does say that “timing” is an issue, but if it met the deadline what’s the harm in an up or down vote?

Final Grades:

• New Jersey- D: How you plan on still getting poker up and running in 5 months when Nevada has taken well over a year is beyond me, and I would rather see intrastate does right rather than sloppily.
• Iowa Senate – A: A 29-20 vote to approve online poker in the state means that, with a 26-24 Democrat tilt, that there was definitely some crossover in voting.
• Iowa Speaker Kraig Paulsen – F: Saying “I didn’t even think it was an issue until last week”, is not an excuse not to put it on the ballot. Its an excuse to be lazy. I don’t even care if it fails, give online poker its day in court.

Online Sites Shakes Things Up

A couple online sites have done some pretty interesting things lately, whether they are good or not is open to interpretation though. Pokerstars probably has the more positive of the two stories with the introduction of Rush Zoom Poker, which gives the same similar an experience not seen since Full Tilt’s Rush Poker. This concept was quite popular and it was a shame that only one site had it, so its nice to see Pokerstars come up with their own version of the poor man’s multitabling. Though, as fellow podcaster Matt Kaufman pointed out, one has to wonder if GBT would go after Stars if they figured it was too close to the “Patent Pending” Rush Poker formula. In other online news, Bodog has decided to tackle collusion on its site by allowing players to get full hand histories 24 hours after the hand had been played. This effectively moves collusion policing from the site to the player, while simultaneously giving players the ability to get full histories whenever they want. I can’t be sure Bodog is on the right track here, because calling the player base you are address this toward as “whiney poker pros” isn’t the best way to keep business.

Final Grades:

• Pokerstars- B: What? A B for Pokerstars??? Its just Rush Poker with a different name to make it look and feel different from the Full Tilt version. I want to give them an A, but its not the most original innovation, even if it is incredibly welcome. Also, I’d be concerned that it really is too close to the FTP version, and what GBT will say about it if they complete the deal.
• Bodog – D: Fine, keep your “fuck everyone, we’ll do what we want” corporate stance, I get it, its what makes you you. But the press release was clumsy and I totally see this getting exploited to the point that you just handed a serious bodog player a database of all their opponents hands. Its not the best scenario…but then again Bodog’s numbers and legal situation aren’t the best position either.

Full Tilt Rumors Go Positive for a Change

First it was Gaming Intelligence, then eGamingReview, (and since they are paywalled I’m not bothering to link) but sites are starting to report good things from the GBT acquisition front. Turns out all that hedging GBT’s lawyers were doing was just to give them more time…or something…because the deal could close this week and they are hoping to have the site up and running within a month of getting full control and licensing. I…remain skeptical, but nevertheless this could be welcome news if it does pan out.

Final Grades:

• GI and EGR- A-: Thanks for getting the rumor out there, God knows we needed positive information. But, I reserve the right to flip this in the opposite direction if its Saturday and nothing has been announced.
• GBT- B-: Look, I know acquisition of a screwed up company like Full Tilt was going to take time. But so will the setup, and I highly doubt you’ll have it ready within a month. I would start saying a month of “a bunch of conditions” because when you put ink to paper on the deal people will start the countdown.

Pokernews Starts “Muck” Section

I guess AsianSpa has landed a writing gig, which officially means anyone can do it. Then again, I’m fairly certain that a) the point was proven when I was given a fucking podcast without any credentials and b) I just entitled myself to some #BadJuJu. Seriously though, its an interesting move on Pokernews’ part to put all their op-eds in one spot and name it after the part of the deck no one really gives two shits about. OK, that’s not fair, sometimes people want to see the muck for bizarre reasons. OK, in all seriousness, I’m totally on board with poker sites having op-eds and random stories (hell, its what I do) because, frankly, poker “journalism” consists largely of parroting press releases and tournament results, and thus is quite dry. And I didn’t say this because I’d totally write for them…no, of course not. That would be selling out. And I’m totally not going to do that…

Final Grades:

• The Concept – A-: I’ve been probably reading more of the off color stories from Pokernews for a while anyway, so the fact they have them clumped up in one location works well enough for me.
• AsianSpa as a writer – ???: OK, I’m used to his thoughts in 140 character format, so we’ll see. Can’t say I mind what I’ve seen so far though.

I dont think I could have expected some of the stories I will talking about this week, not by a long shot. The only time I expected to cover Ray Bitar, for instance, was when he was inevitably found guilty. Never expected to hear New Jersey sprint to the “we’ll be the next state” line for online gambling, and I never would have expected someone who hasn’t really done anything in 4-5 months to remain near the top of The Nuts leaderboard. Ok…maybe that last one I expected, but things definitely went all over the place this week, and now it’s time for the professor (read: the TA) give out the passing (and failing) grades:

Ray Bitar Apologizes to the Poker Community

In what it turning into a continuous “late by a day” scheduling conflict for Negreanu’s new “Weekly Rant” vlog (seriously, why do you think we switched to Thursday releases for Rabbit Hunt), Ray Bitar apologized to the poker community last Tuesday. Perhaps, not surprisingly, it sent the poker world into a frenzy…and not in a good way. While we are sure to get Daniel’s opinion on this tomorrow, pretty much everyone else sounded off on the issue with a mixture of “Fuck you”s and “Go to hell”s and maybe a couple “bat to groin” references. Needless to say, it didn’t go over very well. Some of the anger was, in my opinion and with complete bias, unjustly directed at Pokerstrategy, the site that posted the interview. Look, you couldn’t and wouldn’t have done better, if you had gone after Bitar with the “tough” questions there would be no interview to give, it would look worse than when Quadjacks tried talking to Howard Lederer. I sincerely hope there are more interviews after this one, but I’m not holding my breath, until I see it I will just think was a level by Bitar so he could pretend to clear his conscience.

Final Grades:

• Ray Bitar – F with a percentage of 0%: I don’t care that you are sorry. Sorry doesn’t bring back $300 million to the poker community. Sorry just assuages your own guilt (if that) and doesn’t contribute anything toward making the players even remotely whole. What I do care about is that you better be working 24 hours a day to get a deal signed, and then, for good measure, that you (and anyone else that helped contribute to this) get a good fight from the DOJ for making our industry look like complete garbage.
• Pokerstrategy – A: Yes yes, bias because Matt wrote the story…I get it. But honestly, no one else got Bitar to even speak. Not even close, and if this is the start of a set of meaningful interviews with the man then I am all for it. The fact they got it probably implies a boatload of work on their end, so I have to give them the A for effort.
• The Writhing Masses – B: Any vitriol at Bitar is warranted. Any vitriol against PS, the “affiliate based” poker media, or any indictment against poker in general is not. We probably could have done better to comport ourselves in this situation, but I dont give conduct grades (yea, you remember that  system don’t you?)

Erick Lindgren is Apparently a HUGE Sports Fish

This one is probably last column’s news more than anything, but the 2+2 thread got big over the weekend so it probably qualifies. Erick Lindgren, who was probably better known for his massive stable of poker horses than his WSOP bracelet, was evidently not very good at sports betting. Like…really bad. Seven figures in debt bad. This thread “exposed” another paper tiger within the old guard, someone that had achieved a high level of respect within the poker industry only to find himself torn down by his own vices (Full Tilt affiliations notwithstanding). What is more astounding is that it sounded like most people in the know actually knew about this, but played with him anyway because Lindgren was such a huge fish. The risks some people will take to get an edge…I don’t think I will ever be able to pull that kind of trigger…

Final Grades:

• Erick Lindgren – F: Pretty self explanatory here, if his rep doesn’t go to shit here I’m not sure what it would take. It’s unfortunate to see one of the “good guys” of poker have such a huge leak, but I think it was a leak that flooded the basement of the house 2 blocks over it was so big.
• Phil Galfond – A: I’m starting to understand why Gary Wise had/has/will always have a huge crush on the guy. He wrote a very good blog on the matter and deserves as many reads as possible. It’s tough to find someone that can be as articulate about as wide a range of poker subject as Galfond is, and he does another good job at tackling the issue of debt within poker.
• Harlalabob Voulgaris, Brandon Adams, Daniel Negreanu – B: OK, we got a few professional perspectives and they all said the same thing “I knew, but…” If you knew, why are you surprised? Also, why was this kept under wraps from the general community? I mean, not saying there was a conspiracy theory, but I really think he should have gotten called out way before it turned into a 2+2 thread in 2012.

GBT Still “Reasonably Confident” in Completing FTP Acquisition

Not to be outdone in terms of getting some solid news out, Pokernews and Wicked Chops (sorry for paywalled article) spoke to GBT’s legal counsel Benham Dayanim that effectively parrots the same lines that GBT has been making the last couple weeks, that they are “reasonably confident” that the acquisition will go through. I am going to have to take Wicked Chops’ side on this though, as I see it increasingly troubling that the tone get scaled back the way it is. The tune from GBT has gone from “this will happen” to “this might happen if…” and that’s a bit worrisome even if the deal gets done. While not news by itself, the fact that the deal is still in progress worries some, leading to the belief that GBT is looking for a way out.

Final Grades:

• GBT – D: Even if you are getting the deal done, you aren’t instilling a lot of confidence in your potential future (non-US) customers by jerking us around like this. If you are in acquisitions, you probably should have said from the get-go that these things take time.
• The Poker Media – A-: More power to the media for constantly asking, but I’m sure GBT is getting fed up with the hourly they have to keep paying Deyanim given how many interviews he has had to do.

States Do More…Things Related To Online Poker

A couple of states have recently made moves regarding online poker, some good, some bad. Perhaps somewhat predictably, Mississippi saw it’s poker legislation die on the vine (yes I know it was reported on today, quiet, it happened last week) and New Jersey jumped out of nowhere and announced they’d have a bill on the Governor’s desk by the Ides of March. The stateside solution to the online poker regulation problem seems increasingly like the only one that people are willing to take up these days, with the US Congress pretty much cockblocking itself at every moment, it seems like we should hope the states are a little less apprehensive about such a measure.

Final Grades:

• Mississippi – D: No F for them because honestly what did you expect?
• New Jersey – I: They get my incomplete grade for the week because we’ve heard this song and dance before only to see Chris Christie decide to veto it for various reasons. With the Wire Act reinterpreted, and a softening of the governor’s stance, they may soon get their A.
• California – C: In the Pokernews article, California got about as much praise as it would get from a New Jersey state senator in saying that they actually had the regulatory structure to run online poker sites. So why don’t they? Aside from being preoccupied by their own eternal budget issues, California has a varied of poor and wealthy tribes to work with, not to mention the card clubs that dot the state. It’ll be harder than desired to get a bill passed there, but it isn’t impossible.

ESPN’s Feburary The Nuts Rankings Dissected

I am aware this was two weeks ago and I have little excuse to complain about it now, but I appear to be a topic short and there are a couple things I wanted to say about this anyway.  ESPN’s The Nuts segment has always been about perception and popularity, which is a nice balance between all the mathematical POY systems out there. But it’s also why Phil Ivey, despite having bubbling the LAPC event as the pinnacle accomplishment of the month, is number 3 on the list. Sure, Ivey is the best player ever, but so is Tiger Woods in golf, and he isn’t doing that well and it shows in his (albeit math-based) ranking. I don’t think I’d modify the rankings too heavily, but if Seidel’s comment involves him not doing anything in 4 months, he shouldn’t be number 2. How Duhamel isn’t higher is also beyond me; he is having a Seidel-like start to his 2012 and is on pace for a great year, and Numbers 2-4 haven’t really done enough to deserve the ranking they are at. As time progresses, the opinions of the media panel will adjust appropriately, but I just feel like they move slower than the pace of results sometimes.

Final Grades:

• ESPN’s Choices – B: Not terrible, but I’d say Seidel, Ivey, and Katchalov all need to be dropped a couple of pegs and Selbst and Duhamel need to move up. Still, when it’s a reshuffling of the deck chairs and not a completely new set, it’s better than nothing.

Correction From Last Week: I had said that @Kevmath had coined the term “Overdue Tuesday” (something that amusingly could have applied to Ray Bitar this past week), but it turns out Mike Stein (or @QuantPoker) got to it first. Sorry for the mixup!

This column is going to be a bit different than my work in the past. Before I would take a specific person or entity that was in the news and effectively give a thumbs up/thumbs down based on the merits. Now, however, I’ve decided to focus more on the topic, choosing five stories that impacted the poker world in some way over the past week and how that story made us, the poker world, feel as a result. Its unfortunate that, in the first week of this new version of my column, there are many failing grades being given out, but then again when you have more DOJ action and a bankruptcy filing is hard to think anything else was going to happen.

Unlike previous columns, where I would try to gauge the “mood” of the poker community as a result of these topics, I’ve decided, since this is presently on my own blog, to make it more of an op-ed then it already was. So the views you see are my own, and while I will draw from the reaction of the community, its not a guarantee I will view things as well or as badly at the public at large. The grades are decided pretty simply: the more negatively the story looks like as a whole, the lower their grade. The poker community has priority on how it looks, but sometimes we think things are worse then they are and vice versa. That said, lets see what we have for this week.

Bodog Indicted by Department of Justice

Well the general reaction to this news was “and we are surprised how?” Indeed, and I can’t be sure this was Kevmath’s coined phrase, but Overdue Tuesday seems like the right way to put news like this. Pretty much throughout the entire last decade, Bodog’s reaction to any DOJ action has been met with a stiff but resolute middle finger. Calvin Ayre continued this by both denouncing the charges as a media ploy then subsequently using his statement as a way to plug his own site as the only place you would see his interviews. At the end of the day, it shouldn’t even matter much to the poker world because the District of Maryland is slapping Bodog with sports betting, not poker. It would have been hypocritical to begin with given the Wire Act (re)interpretation, but sports betting was still a big no-no. The Bodog brand pulled out of the US poker market last year, and the reincarnation of that site, Bovada, is neither named in the lawsuit nor taken down.

Final Grades:

• Bodog: F – For thinking they wouldn’t eventually get charged.
• Calvin Ayre: D – Didn’t fail purely because he actually responded to charges…something we’d like to see others do.
• DOJ: D – For finally pulling the trigger but minus points for thinking they’d actually get to trial.

Federated Sports and Gaming Files for Chapter 11 Bankruptcy Protection

Oh dear. Even if people were expecting that this was going to happen at some point, no one probably wanted it to happen midway through the first season. FS+G’s Chapter 11 filing comes at the heels of rumors that the fourth event was pushed back due to lack of cash and that Pinnacle Entertainment was thinking of buying the company. With Pinnacle owed $2 million and the cash on hand Federated had standing in the 5 digits, it seems like these rumors have some legs. Really no one comes out ahead here. The people directly or indirectly employed by Federated are now in danger of losing their jobs and, for the players, the fourth event and the $1 million freeroll might not happen at all. And on top of that the reputations of top brass at FS+G like Annie Duke and Jeffrey Pollack, and you have a pretty disastrous situation going on over there.

Final Grades:

• FS+G: F – For running out of runway wayyyyy before they should have.
• Annie Duke/Jeffrey Pollack: I – Giving an incomplete pending what happens next, the range I will give is a C if the last event and freeroll happen to a F if the words Chapter 7 get attached to court documents.
• The “naysayers”: B – For only giving a couple “I told you so”s while also saying that this is still a bad day for poker.

Armchair Ethicists Sound off on EPL Issues

My partner-in-crime on the Rabbit Hunt podcast arrived at the conclusion on the air that what EPL did was unethical; that letting people play in the third event knowing they didn’t have enough money was misleading to the players that factored in the freeroll in their calculations about whether they’d play. It was…a theory that I admittedly had difficulty debunking, but my best counter is that its very possible they had investors put out after the 3rd event failed to attract the numbers seen in the 1st event of the series. In either case, Matt (and others with some less eloquent arguments), took to the internets to voice their opinions on the subject. At the risk of sounding bias, I have to wonder how much the shady nature of the companies surrounding poker have made us think everything is a conspiracy to fuck over the players. From UB (superuser and subsequent coverup), to FTP (no money and subsequent coverup), to many smaller sites (no security and subsequent efforts to play it down), it seems like no one is doing things right. Which makes the questioning of Epic, if anything, all the more valid, because all other things equal, there are more bad apples than good apples these days. I personally don’t think they planned for this, and that there were investor pullouts at some point, but I will say this, if Epic folds and there are no more events, the criticisms will only get louder.

Final Grades:

• Both sides of the argument: B+ – The points are valid, but care must be made to not link this situation with UB/FTP, because they aren’t even close. Admittedly, and possibly because its so easy to drown out the “Daniel was right, Annie sucks” crap on forums, the actual discussion have been civil…ish.

Daniel Negreanu is Daniel Negreanu

I “praised” Daniel for his ability to edit videos on the…I think 2nd video he had done for his fans. Admittedly, they are better than what I could do, granted he’s using some fancy Apple-related BS and my Windows-master race brain can’t be bothered with that sort of thing. All this said, I have to give Daniel some credit here even though he hasn’t really done any news of his own; he has thrown himself into the Full Tilt and EPL arguments pretty heavily of late, and I have to say I like that someone other than the plebes are getting into these discussions. Others do it far more eloquently than Daniel does (Matt Glantz comes to mind), but Daniel has a…I guess passion that no one else really has. I’m actually anxious to see his next vlog, if nothing else than because I want to see what I can pick apart when he inevitably gets to Epic Poker.

Final Grades:

• Daniel Negreanu: A – As much as I may disagree with the man at times (see the nearly guaranteed rant about EPL coming soon), he is actually doing things to connect with fans, and I can’t fault him for doing that.

The WSOP-C National Championship To Allow 100 Additional Players, Will Be Televised

I have a little less to say about this story than I initially thought I did, but this does a good job of rounding out the week’s news. The Circuit’s freeroll is now a freeroll with a big asterisk, as players who did well in the last two year’s worth of WSOP series are also eligible to play in the event. Of course, if you are in that category you have to pony up $10000 to play, and even then the field will be capped at 200 players. Still this seems like a reasonable way to get more people involved, even if it potentially waters down the freeroll value by making it more shark-filled. Also on the docket is the fact this will be televised…or at least the final table. Provided the big pros dont pay the $10k and then run the table, we may see a regional player get some national recognition out of this decision.

Final Grades:

• WSOP: B – More players in the freeroll and making it a TV final table are both nice, but why July 6th? Can’t the ESPN crew start earlier or maybe not have it during the Main Event? Oh, and a definite knock on the grade for the attempt at gallows humor Seth tried pulling the day FS+G filed Chapter 11, didn’t work too well…for some anyway.
• ESPN: A – Any decision to carry more poker, no matter what it is, is ok in my book.

And thus ends any effort I am going to expend to make this post sound news-y or professional because, frankly, I did not need more bad news this week, but when it rains it pours. FS+G’s filing comes both suddenly and not suddenly at the same time. As Kevmath put it, had this news broken yesterday, it would just have become another part of “Overdue Tuesday”…or whatever the day was being called after the Bodog/Ayre indictment. The company had financial questions dogging it from the beginning, and while it would be ridiculous to think they were going to try to make money from the first event, its equally difficult to believe that, in this climate, they wouldn’t have at least some trouble staying afloat. This…seems to be on the high end of “troubles” and really it just boils down to a couple factors.

For one, they had absolutely terrible timing for getting this tour off the ground. No one could have foreseen Black Friday (at least from this side of the fence), and when the Epic Poker League was announced in the beginning of 2011 it seemed like a novel, albeit expensive idea. Staying vendor-neutral (or, as I believe Annie called it at one point, “being Switzerland”) was probably another somewhat dangerous move to take, but whatever, if sites wanted to pour money in via their own sponsored players who is going to complain? Well…then Black Friday happened, and it made high buy-in tournaments more volatile as a result. Not only that, but sponsorships dried up and the poker world as a whole contracted a fair bit. It was certainly a difficult time to get a new tour off the ground, but I’m not sure they could have stopped the train once it started at that point.

The other factor was bad publicity. The poker world was divided regarding the league, with some thinking it was a step forward and others proclaiming that it was doomed to fail from the start (thinly veiled critiques of Annie being the commissioner notwithstanding). In the end, the efforts to “PGA-ize” poker were a complete mess, and it was this that drew the worst criticism. Between Chino’s prior debts, DeVita’s prior crimes, and Ferguson and Lederer’s present legal troubles, there was no way Epic was going to win in any of these situations. It seemed like no matter which stance they took they were blasted for it, and while it would be nice to clean up the game, it seems like at the moment really cares.

I imagine that, at some point, the funding was drying up faster than expected. When you think about it, there was $400,000 added to every tournament, plus a $1 million freeroll, plus no rake, plus TV production costs, etc. You can see that this was a big sinkhole, and Epic needed to find a way to get revenue fast. Unfortunately, it doesnt look like they got it fast enough, or some investors got the hell out sooner than FS+G would have like, which leaves us in our present situation.  I don’t pretend to know where the money was coming from, and how it was funding Epic up to this point, but I would like to think that in their initial plan they were going to make it at least a full season, to the fact we are where we are makes me wonder what exactly changed, or whether the reality of the true cost of the operation caught up too late.

Now I know people are going to start dancing on the corpse (looking at you KidPoker), but its not quite over yet. As Duke and Pollack are quick to stress, it’s Chapter 11, which allows for reorganization, not Chapter 7, which is a straight liquidation of assets. I…don’t really know what assets they’d be able to give in that event, but at the very least we have seen companies come out of Chapter 11 before, so hopefully FS+G is one of them. I imagine some connection to the “Lederer family is evil” will be made and all I have to say is, on a personal level, to shut the hell up. I was paid for writing an article that was a summary of real news because Annie herself recommended me for the job. And even if this isn’t as much a career for me as it is for some others that will be affected more by this, I do consider myself a member of the poker media, and we have been treated extremely well by FS+G thus far. It’s unfortunate that I am talking about this in the wake of a bankruptcy filing, but this company did manage to employ quite a few people that could use jobs in this crappy poker climate. As I said back when this all started, people shouldn’t be cheering for Epic’s demise, because if this tour (or one like it) does succeed, I can’t see how it’s bad for players.

While this news is, in all likelihood, something everyone should have seen coming, hopefully FS+G can crawl out of it and at the very least finish off the first season of the tour. As for now, life goes on.

I suppose some of this has to do with the fact that I have both friends and relatives that are gay, but I haven’t really thought twice about someone when I’ve found out someone was gay. I mean, think about it, they were gay before you knew, and they were your friend then, why should their sexual preference impact anything? If it does, you weren’t really friends to begin with, or you seriously need a reality check because its not like their personality is gonna insta-flash to something else now that you know. We really had only one high-profile example of a gay poker player in Vanessa Selbst, but she seems to be doing pretty well for herself. I know there is an additional stigma for being male and gay, but I would like to hope at least in professional circles people can adopt the rule of not being a dick to Jason for this. I for one applaud Jason’s decision to come out to the poker world, but honestly, it shouldn’t change a damn thing. It’s not like he’s gonna all of the sudden do worse in poker because of it, in fact he won a bracelet in 2011 after he started becoming more comfortable with himself, so…if anything, he’s gonna start playing better.

My only nitpick I can make here (and you knew I would) is that poker is not a reflection of the demographics of the world. If that were true, 50% of the players would be women, not 3%. I’m not saying that gay people don’t play poker (again, see Vanessa and Jason), but I wouldn’t immediately buy that 10% of the field is fearing to come out and just needed that little kick. At the same time though, we are (hopefully) more accepting than the general population, and we can just accept people for how they play on the felt and not give a damn what they do off it. Once again, kudos to Jason for writing this post, its probably harder to tell your immediate family something like this but coming out in public is a huge step as well. If this causes others to do the same, more power to them.

No, this issue stems from the fact that most players have not paid up and, up to this point, have not indicated they plan on doing so. Such names include recent winner of $2 million AUD Phil Ivey, prolific poker backer Erick Lindgren, and, oddly enough, Team Pokerstars Pro Barry Greenstein. I have to ask though, just how much of a poison pill is this debt?

Much Ado About Nothing

I won’t pretend to know exactly how much GBT is willing to pay for the assets of Full Tilt, but the raw numbers already put the sale at a sizable sum. It’s $80 million for the purchase of the assets from the DOJ, and $150 million (roughly) for a player fund so non-US players can get their money back. They are already getting a discount of $150 million in US player assets that they don’t have to pay back, but I assume they may have walked out if they had to pay that, so whatever.  You are talking about a sale price of over $230 million, and that’s just on day 1. I’m sure the costs of getting the site running, making it profitable again, etc, are going to add to the final price tag.

So you have to wonder, just how much of a danger is this $10-20 million? Dayanim states that he doesn’t want his client to deal with litigating all of these individual liabilities post-sale, and wants to get it all sorted out before the sale concludes. I, for one, think that this is entirely correct and is very likely GBT’s honest opinion of this situation. However, I do not think that this is a “deal killer” that they are very cleverly suggesting that it might be. Even if they found additional liabilities that Full Tilt Poker has that they have to pay after the fact, I can’t imagine using the players as the reason for the backing off is the real reason. Now, they might see these player debts as a means to an end, an ability to close off some of these debts so the sale price doesn’t continue to go up, and of course I’m not going to start rattling off non-existent sources, because Tapie’s lawyer stated he can’t comment about it right now. But it does make you wonder, why did they bring this up now?

Tinfoil Hats…Activate!

Remember last week when Subject: Poker released that investigative report on Chris Ferguson’s bank accounts? Remember how angry you (likely) were that Chris might be holding up the deal? Yea, I get the feeling GBT saw that reaction, saw the debts during their due diligence, and a light bulb had to have gone off in one of their heads. As stated earlier, Laurent Tapie said that Chris Ferguson couldn’t do a damn thing to stop this deal, and I’ve conjectured that he wouldn’t follow through anyway because he’d be Satan, not Jesus, in this instance (yes, the irony of Ferguson being an atheist while using this example does not escape me). Well, if I’m looking at these debts, and I’m looking at the public reaction to the words “deal stopper” and “<insert player name here>”, what should I do to convince some of these recalcitrant players to cough up their money? Yea, I’d probably take to the media waves and say that these player liabilities are a “serious obstacle” to the deal as well, it just makes rational sense. Couple that with the amusing timing regarding Phil Ivey coming out from the darkness and winning A$2 million and you have a recipe for Chris Ferguson-like reactions from the poker community.

OK, so the question is, did they do this on purpose? Without knowing when they found out about these player debts, I’m going to say yes, they probably did. Something strikes me as off that all of the sudden a maximum of $20 million is going to keep GBT from completing a $250 million transaction on a risky investment. Similarly, anyone worth their salary is going to pay attention to how the press is handling this, and when you see a reaction like we did last week with Chris Ferguson, you can’t help but put some of these players on trial in the court of public opinion. Some very specific names were dropped here, some we knew (Ivey and Benyamine being the two prime examples), and at least one we didn’t see coming (Barry Greenstein?!). Now, it’s worth noting that these debts are considered FTP assets (if FTP’s accountants had a lick of common sense), so I don’t know exactly what GBT is thinking is an issue here, unless there is a problem with the debts being dissolved as it goes through the liquidation process. This brings me to my conclusion on this:

In essence, I think that GBT really does think the player debts are an issue, but it’s not a deal breaker by itself. That said, if they can get the players to pay back their Full Tilt debt in some form before the transfer of ownership by putting them up to public scrutiny, then its win-win for GBT.

OK, so not really tinfoil hat, because I do acknowledge GBT has a point, but still, this wasn’t an “out of the dark” press spree, this was done knowing how we would react, and I can’t help but feel a little off as a result.

Barry Responds

Up to this point, Greenstein has actually taken to responding on 2+2 about this matter, and, it being 2+2, there has been a…uh…lively discussion on the merits of this. Here’s the post directly from the site as of 7:06pm ET:

I have been inundated with calls from all the poker media sites regarding this, so it’s easier for me to respond in one place. Obviously, 2+2 has become the main place where people discuss online poker so I’m posting here. It would be nice if everyone who owes money discusses it openly so there is a better chance that they will make good on their debts and the money will end up in the pockets of players with balances on FTP.

My statement to the press and the poker community:

I borrowed $400,000 to play on Full Tilt a few years ago, before PokerStars had high stakes games. I didn’t pay it back, hoping that some people who owed me and had money on Full Tilt would pay me there so I could use that against the debt. (I’m only owed about $150,000 now). I have assumed when this case is resolved, the DOJ will allow methods for dealing with debt to FTP.

Tapie Group contacted me last week and asked if I would pay them directly. Their attorney offered me the opportunity to pay in installments so I could have a chance to use money owed to me. He even offered me the opportunity to discount my debt if the US players don’t get paid in full. I told him that I have never paid less than I owe on any debt and I would rather wait until the DOJ establishes a fund for the US players. I don’t believe my debt has any impact on the sale to the Tapie group as they have alleged. I was concerned about taking money due to US players and giving it to the Tapie Group because it is understood that the Tapie Group won’t be the one paying the US players. On the other hand, I realize that the total debt counting other players is substantial, especially because I would include in that tally any money taken from FTP once it had become insolvent.

Here is an excerpt from the letter I sent to their attorney:

“The consensus in the poker community is that all money owed to Full Tilt or taken by investors after the company became insolvent should be used to pay back player’s funds. If I were to make a deal with you it would look like I had turned my back on the best interests of the American players.

Even though the terms are easier for me if I deal with you and it will fulfill my legal obligation, I have to see how things work out with the DOJ and try to make good on my moral obligation to the US players. I assume at some time in the future the DOJ will establish a pool of funds from Full Tilt’s assets that will be used to pay off some percentage of the player balances that are owed.”

Now, its worth stating that Barry is the first, and thus far, only pro to address this issue, really at any point. Ivey had this thrust in his face after he filed his lawsuit back in May, but he never really had to respond to it. Now I have a problem or two with both sides of the issue. On the one hand, why is the Tapie Group asking for direct payments: they haven’t even taken control of the company yet. If anyone should be getting paid back, it would be the dried husk of a company that is Full Tilt Poker, or an individual at the company as the case may be (some suggested the money came directly from Ferguson, but that’s not confirmed). Is Barry right in holding off? Well, so long as Full Tilt is in Tiltware/Pocket Kings hands, yea, he at the very least shouldn’t be paying back GBT for it. I’m not sure if Barry could get the money to go into a DOJ pool, but if he was actively looking for a way to make that happen I’d be willing to throw a couple brownie points his way. The thread is ongoing and going quite strong as of right now so I’d head in that direction (if you can sift through the noise) to see what the general consensus is, but not paying GBT seems like the obvious move here. He should be paying back FTP only, at least at this stage. I think that the fact that Barry was even willing to respond says a lot about the man, and if he’s got a debt with FTP, he will eventually pay it back. How he does it though, seems to be open for debate.

I’ll put the tinfoil hat back on for a second and consider this. Again, these debts to the players should be considered assets, and anyone that’s going to go through the liquidation process as a trustee is going to see this and try to work out a plan to get that back. GBT stands a good chance of not being able to dictate the terms of that repayment, to the point where they may get a raw deal. In this particular case, GBT loses value on the company, and the worry is that they may lose significant value just by having someone in the US government dictating the terms, not their own lawyers. Thus, GBT is hoping to get the money themselves without having to go through liquidation via a seperate process, and again using the shame of block the deal that pays (if the DOJ cooperates) $300 million back to poker players. It strikes me as a tad dishonest, but they are taking a massive loss (hopefully) to give players their money back, so I have a tough time nitpicking if that money was going to go to paying back players. Seeing as I don’t know, all I can say is they are trying to get the cash before the DOJ has a chance to mess with it.

Conclusion

GBT is looking out for itself in more ways than one, and I don’t expect a business, particularly one that deals with acquisitions, to do anything differently. This is a complicated sale on a risky investment that is going to involve liquidating assets, giving them to the US Justice Department, then re-selling them to GBT with the hope that the DOJ won’t screw it up. When faced with a $10-$20 million asset that could get trimmed at a whim, GBT tried getting ahead of the problem by appealing to the masses to have the professional players pay that money back. But as Barry Greenstein has pointed out, he shouldn’t have to pay back GBT, and any money out of Full Tilt’s debts should, in theory, go toward paying back the massive debt on the players. I won’t say that either side is strictly wrong, but both sides are playing the angles, and we may have more to hear about this in the days to come.

Epic Poker - Winners & Losers: Aussie Million Winners and Online Poker Losers

Our tradition of missing big news by a day continues on the Rabbit Hunt. We covered all the news related to Full Tilt before today’s GBT bombshell, so at the very least you can get caught up on that front. Needless to say, we will likely be talking about today’s news next week. Still, there were other things to talk about, from Ivey winning the Aussie Millions SHR (apt timing at that), to changes in the WSOP schedule and Pokerstars rake, we have a packed program this week as always.

Cardrunners - Rabbit Hunt: 84

Pokerati (http://www.pokerati.com) – Disclaimer #1: OK yes, I know, I used to write for the site so I might be a tad bias in placing it on this list, but the blog gets read by thousands of people a day and remains one of the best “insider” blogs out there, certainly when it involves the Las Vegas poker seen (have you heard of the Pokerati game at the Palms?). Dan Michalski, the longtime EIC/owner/boss man over at the site can be credited with helping me maintain my CR position, get me the job over at Epic Poker, and still says I am a capable writer, which means a lot to me because that means even though I left for greener (read: paying) pastures evidently I do deserve what I get. Likewise, the man and his team of bloggers know what they are talking about, and I’d always recommend Pokerati for a read to those that want to learn more about the inner workings of poker.

Quadjacks Radio (http://www.quadjacks.com) – Disclaimer #2: I have shit on Quadjacks in public. I just have. I used to complain about the way they go about doing things, and am annoyed when the conversation turns into what amounts to a populist 2+2 rage. With that complaint out of the way, I can’t see a poker landscape without these guys. Brought in by their 24-hour coverage of Black Friday (of which I definitely participated), the site grew from a small interview site to one of the bigger independents out there. They do cater to the 2+2 crowd as I said, but that is perfectly fine, and they are really good at what they do. Before this sounds too much like a backhanded compilment, I will say this, for daily poker needs, give these guys a listen. Recently they’ve been giving specific timeslots to others for shows (such as Jared Tendler getting his own show based on the mental aspects of poker), and I think that will work very well for them. I would say these guys are filling the gap that Pokerroad created when they went into hibernation post-BF, and Quadjacks is doing a hell of a job carrying that torch.

Subject: Poker (http://www.subjectpoker.com) – Created almost in direct response to the wave of unsubstantiated rumor-mongering in the post-atomic horror, Subject: Poker is the brain child of 2+2 poster NoahSD and others. They focus more on investigative journalism more than anything else, opting to release quality articles infrequently rather than the normal stories every day. Thus far, its worked really well, although they haven’t been without their own missteps too (Merge to be indicted last September anyone?). While I would love to find out how they get some of the information they get, I am content with just reading what they have to offer, and given the fact the rest of the poker media eats up the articles they write, you probably should too.

Pokerfuse (http://www.pokerfuse.com) – Disclaimer #3: These guys actually have some nice things to say about my podcast, so I may have formulated my opinion around that. Still, this is a general poker news site that does really well at what it does. They are trying to start up a profitable business without resorting to the affiliate model (per their FAQ), and while that is going to be difficult in the current climate, it is by no means impossible. As with many of the other sites, they have something unique to offer in what they write about, so they definitely make the list as well.

Wicked Chops (http://www.wickedchopspoker.com) – I’m just doing this because..well..they are Wicked Chops, and to round out my five sites to go to. They are definitely in the “old school” category but always have decent stuff posted, and even have decent summaries for their paywall articles, which I give a big tip of my hat for.

I strayed from individual blogs (Pokerati is far from that at this point), but you get the gist. I’m sure, even if you have heard of one, two, or even three of these outlets, there is at least one you haven’t checked out yet. Give the indie sites some love.