Business/Finance

Full Tilt Poker: French tycoon Tapie agreed to buy

Friday, September 30, 2011

Troubled online gambling operator Full Tilt Poker said Friday that French business tycoon Bernard Tapie has agreed to buy the company and its assets despite its legal troubles in the United States and the revocation of its gambling license.

Full Tilt said in a news release that Tapie - a former government minister, sports tycoon and actor - has agreed to the sale on condition that the company settle its legal troubles favorably. Company executives are facing federal charges of money laundering and fraud to run a gambling business in defiance of a 2006 law that prohibits online poker operations in the U.S.

The site attributed its announcement to Laurent Tapie, managing director of Groupe Bernard Tapie. Laurent Tapie said the group signed an exclusive agreement with Full Tilt's board for the sale, according to the statement.

Attempts to reach Tapie were not successful on Friday. A telephone call to Groupe Bernard Tapie by The Associated Press went unanswered.

Full Tilt said the agreement includes a plan to repay balances of players worldwide who haven't had access to their gambling funds since April.

Federal prosecutors in New York said that in March, Full Tilt had $60 million in funds to cover $390 million in player balances, and had used $444 million to pay company executives and board members, including a few well-known poker professionals.

U.S. Attorney Preet Bharara last week said Full Tilt was running a Ponzi scheme, an allegation the company said is untrue.

Bharara spokeswoman Carly Sullivan declined comment to the AP on the report of a Full Tilt-Tapie deal.

The announcement comes one day after gambling regulators on the British Channel Island of Alderney revoked Full Tilt's gambling license that it used to operate its online card room worldwide. The executive director of the Alderney Gambling Control Commission said Full Tilt had severe financial problems including bogus accounting, unauthorized loans and a failure to report significant material events.

Full Tilt shot back with an unnamed statement saying the commission's decision potentially damaged its ability to be sold.

Full Tilt's operations in the United States were effectively shut down after several top executives were named in an April 15 indictment that went after Full Tilt, Absolute Poker and PokerStars, as well as individuals accused of helping the companies process money.

Prosecutors said the companies tricked banks into processing payments by setting up shell websites and disguising transactions as sales for things like golf balls and flowers.

Full Tilt on Friday cited Tapie's experience in saving financially troubled businesses and bringing them to profitability. It specifically cited his 1990 purchase of sportswear maker Adidas.

Tapie was awarded $449 million in 2008 over the botched sale of Adidas after he said he was defrauded out of millions in the sale.

Tapie served six months in prison in 1997 after being convicted of bribing soccer players to throw a 1993 match against Olympique Marseille, a team he owned. He was also convicted of fraud for deliberately misleading authorities about a luxury yacht.

It was not immediately clear whether Tapie's past would hinder Full Tilt's ability to obtain a new gambling license. Gambling regulators typically investigate potential licensees, though commissions in different jurisdictions vary in how strict they are on background checks.

Several phone calls to the Alderney commission received only a busy signal after business hours in Alderney on Friday.

But the commission's executive director, Andre Wilsenach, said in announcing Full Tilt's revocation that the business could be licensed again.

"It is important to note that the revocation of (Full Tilt Poker's) licenses does not, as has been suggested, prevent a reactivation of the business under new ownership and management," Wilsenach said.

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