The news of poker companies Absolute Poker and Ultimate Bet heading towards bankruptcy has hit the online news websites. Although this has not been officially confirmed, it appears to be the unfortunate but inevitable future for these 2 sites. As of now US poker players using Absolute Poker and Ultimate Bet might just end up losing their deposits.
Madeira Fjord of Norway, who represents shareholders of Absolute Poker and Ultimate Bet’s parent company, Blanca Gaming from Antigua, stated in an email to shareholders that the company had a plan to file for bankruptcy in Norway since they had no cash on hand and no prospects for any cash flow in the near future. Blanca Gaming has also notified shareholders regarding their inability to make any payments towards the Norwegian company’s debts, claiming that there will be no future payments as well.
On the other hand Absolute Poker and Ultimate Bet have laid off 95% of their staff. Scott Tom and Brent Beckley, founders of Absolute Poker had been indicted on April 15th 2011 by the US Department of Justice, along with PokerStars and Full Tilt Poker. UB was not directly indicted but is affected due to its common ownership and shares operations, through parent company the Cereus Network, owned by Blanca Gaming.
The indictment accuses the companies of having “tricked and bribed” US banks into processing online gambling transactions, in violation of the UIGEA 2006. The DoJ seeks $3 billion in penalties and forfeiture.
In the aftermath, PokerStars and Full Tilt Poker, signed an agreement in order to release the funds of players, and although Absolute Poker and UB have been offered a similar deal, they are yet to settle. News is that they have not paid players even outside the US.
Absolute Poker and UB have been in trouble during recent years since they gained popularity. Absolute Poker refused to stop accepting US players in 2006 but a cheating scandal in 2007 destroyed its reputation in the market and with the players.
UB was involved in a battle with the shareholders over runaway spending, for example in 2009; they reported a loss of $33.7 million despite the income of $215.3 million. While shareholders were working on a plan to sell the company, UB was indicted last month by the DoJ for worse accusations with serious consequences.
While many players might still hope for their money to be returned if the companies do go bankrupt then that would mean a certain loss of funds for players who played at these sites.