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Alderney Postpones Full Tilt Licence Hearing

by Jason Gorringe, Tax-News.com, London

29 July 2011


The Commissioners of the Alderney Gambling Control Commission have announced their intention to adjourn the hearing into the future of the licence issued to Full Tilt Poker, currently suspended, until a date no later than September 15.

In response to a pre-hearing application, the Commissioners said that it had been decided that a deferral of the proceedings would be in the best interest of Full Tilt customers, many awaiting the return of deposited funds. The Alderney Gaming Control Commission said it was to allow FTP licensees the option "to further pursue advanced commercial negotiations, which could lead to a more beneficial outcome for players' interests."

A group of unnamed European investors are said to be considering acquiring the company's UK, Irish, and possibly European portfolios in a deal yet to be finalized. The investors are thought not to be interested in purchasing the company's US business - currently subject to criminal proceedings in the US. In purchasing just the non-US portion, investors may distance the remainder of the business from US legal proceedings.

Dubbed 'Black Friday', on April 29, 2011, Full Tilt Poker, Pokerstars and Absolute Poker had their US operations suspended by US authorities when a suit was brought by US prosecutors over the companies' alleged use of sham payment-processing frameworks to unlawfully provide Internet gambling services to the United States.

Under the terms of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, offshore operators are effectively blocked from access to the lucrative US internet gambling market. Specifically, the Act prohibits gambling businesses from knowingly accepting payments in connection with unlawful internet gambling, including payments made through credit cards, electronic funds transfers, and checks.

US authorities allege that the three companies - two of which were industry leaders (including Full Tilt) - circumvented federal laws and ‘tricked’ banks into processing illegitimate payments. The three sites are to be charged with illegal gambling, bank fraud, and money laundering accordingly, US prosecutors said. The US government is thought to be seeking USD3bn in compensation from the companies.

Full Tilt has yet to repay US players, and the company - based on its current financials - will in all likelihood be unable to meet a compensation claim of that magnitude.

Canada is reportedly also examining Full Tilt's activity, regulated by the Kahnawake Gaming Commission, in light of the US proceedings.

The Alderney Gaming Control Commission said:

"The Commissioners [have] adjourned the substantive hearing to commence as soon as possible and in any event not later than September 15. Further details regarding the exact date and venue of the substantive hearing will be announced as soon as practical."

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: business | law | international financial centres (IFC) | offshore | internet | gambling | Alderney | Canada | United States

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