GPWA Times - Issue 21 - May 2012

In a candid interview, Poker Players Alliance executive director John Pappas shares his surprise over Full Tilt’s post-Black Friday death spiral and looks at the future of online poker legislation in the U.S. VN: Let’s start with Black Friday. Where were you when you heard about the indictments? PAPPAS: I’m embarrassed to say Black Friday happens to fall on my birthday. April 15th is my birthday, but I had informed my staff that I would be out of the office on Friday on my birthday and I was playing golf with some friends and not to reach me. VN: Did your staff follow your instructions? PAPPAS: Murphy’s Law, I literally was in my car at the golf course that morning, looked at my BlackBerry and said, “Should I just leave this in the car?” And I said, “Nah, I’ll bring it with me.” And thank God I did. I was at the turn, playing golf, and my phone just starts blowing up. E-mails, phone calls, text mes- sages, I finally pull it up and promptly told my friends, “Drop me off at my car, I’ve got to go back to the office.” That’s where I was, and it was not a very happy birthday. VN: I can imagine. At what point in the process did you realize that we were facing a sort of water- shedmoment in terms of online poker in the U.S.? PAPPAS: I thought we were facing a watershed moment in how the government was really go- ing to enforce it. It had really been around the edges, and the players hadn’t felt the pain up un- til then, although the companies had been feel- ing the pain [of] death by a thousand cuts. There had been a number of seizures of small amounts of cash and the closing of certain bank accounts for about a year and a half leading up to Black Friday, and the sites, wanting to make sure the customers felt secure with their money online, simply just covered those losses with their own revenues, and the players never felt anything from it. Even though players’ money was seized, the sites essentially just reimbursed the players without the players’ ever knowing that money was theirs. So we were seeing that building, and I think obviously the crescendo was Black Friday and the ultimate impact on the players was not only those moneys being seized but the domain names being seized and their ability to access those sites now was completely eliminated. And now [for] players, despite some sites that they can still go on and play, the market has essen- tially been decimated. VN: PokerStars was the first to pay back their players. How surprised were you that they were able to get that sorted with the DOJ that quickly and the money out to the players that fast? PAPPAS: Not surprised. I have dealt with the senior management at PokerStars. It’s no se- cret to anybody that they have been support- ers of the PPA financially as well as helping us build our membership with their own players. They always operated very professionally, and they had a very strong legal team in place in anticipation of something like this, and they were able to very quickly go into the DOJ and negotiate a deal to insure that the players got repaid, because I think that was a priority for them. It’s interesting to see even if Black Friday didn’t happen where PokerStars would be in the U.S. market today. One could speculate that PokerStars may have voluntarily decided to leave the U.S. market. Because of all the am- biguity and the building of the seizures over the previous year, they may have felt that, hey, maybe we’re going to take a step off. VN: How surprised were you that Full Tilt went under in the wake of all this? PAPPAS: I was surprised. Honestly it was a shock to us. I think that Full Tilt was unfortu- nately just not well prepared for Black Friday, and they were maybe playing aggressive poker at a time that asked for conservative play, and because of their aggressive play, when the DOJ shutdown occurred, they were essen- tially caught flat-footed and unable to restore the players’ money, and that’s been obviously a huge issue for the community, because we’re talking about $150 million of U.S. players’ money that is yet to be returned. VN: Now the PPA is first and foremost a play- ers’ organization. What types of stories, and what types of feedback did you hear from the players after Full Tilt went under? PAPPAS: It was mixed. I think that players felt that they’d been duped, that they’d been scammed. Some were upset with the PPA be- cause we had an association with Full Tilt. I can tell you that as a player organization and as a grass-roots advocacy organization, we never had any insider knowledge [regarding] the business operations of either Tilt or Stars. They were simply helping us support financially our effort to unite players and bring this grassroots organization together. We took steps immedi- ately after Black Friday to remove some folks who were on the board of the PPA who were also involved with Full Tilt Poker and we tried to reaffirm with the players that we’re standing with them in ensuring that their money is re- turned. And that has been our clarion call since Black Friday: Full reimbursement of the play- ers’ money. We’ve made that very clear to the DOJ. We’ve made that very clear to members of Congress. I’m not saying we’re the sole reason why this is happening, but I do believe the rea- son there’s been such an emphasis on getting a deal for Full Tilt that will restore players’ funds has a lot to do with the pressure that we’ve been applying on lawmakers as well as the DOJ to say that that’s got to be a priority. We can’t liq- uidate Full Tilt and not fully repay the players, particularly in light that you allowed PokerStars to fully repay their players. It wouldn’t be right to say, “Whoever buys Full Tilt only has to pay 50 cents on the dollar or 75 cents on the dol- lar, or you only pay back deposits and not win- nings.” It wouldn’t jibe with what the DOJ had already allowed, so we made that very clear. VN: In terms of your dealings with the DOJ, what is your sense of where their priorities lie in terms of settling something with Full Tilt? Where does the repayment of player funds lie? PAPPAS: I think it’s very high on their list, I really do. I think for them it’s a PR issue. They don’t want a million angry poker players clam- oring at their door. And I think they recognize that they want to get as much money out of this as possible, too, out of seizure and settlement, so they believe that a suitable buyer of Full Tilt needs to step up and pay the players, and that will help them not have to spend the money that they plan to get out of this in repaying the players. VN: Let’s circle back around in the after- math of Black Friday, as we move into the summer. As you’re talking to legislators, because the job of trying to push legislation through hasn’t gone away, how was their re- A birthday to remember COVER STORY Where to now in the U.S. – and who’s driving ?