A Look at Why Pokerstars Was Able to Pay Out its US Players So Fast

Q: Why Was Pokerstars Able to Pay Out its US Players So Quickly After "Black Friday"?

A: Note: This article is just my opinion

Pokerstars, Full Tilt Poker and UB/AP all had funds frozen on "Black Friday".

As of the time of this article (May 12th), only one of the companies (Pokerstars) had paid out its US players, while the other two (Full Tilt Poker and UB/AP) have not yet initiated the process.

This begs the question - why was Pokerstars able to pay out its US players so much quicker than Full Tilt and UB/AP?

The answer to that question lies in the licensing agreement that Pokerstars has with the Isle of Man government.

The King is standing next to the Pokerstars logoThe Isle of Man has always required Pokerstars to hold player funds in segregated and protected accounts. This means that the money that belongs to Pokerstars' customers is held in separate accounts from the general operational funds of the company.

It's important to note that the DoJ froze certain bank accounts belonging to Pokerstars, Full Tilt Poker and UB/AP because they feel as though all three companies are breaking the law in regards to the UIGEA and financial transactions involving US citizens. The DoJ did NOT freeze accounts in order to seize money that belongs to US players.

Because Pokerstars segregates player funds, they were easily able to pay back their US players without an issue.

Full Tilt Poker, on the other hand, was not required to segregate player funds, and this is why they have run into such a problem when it comes to paying back their US players.

Full Tilt Poker (and UB/AP) will presumably need to provide a detailed accounting to the DoJ in regards to the funds that the US government seized. How much of these funds belong to players, and how much belong to Full Tilt Poker?

Full Tilt Poker presumably has player funds commingled with operational funds in these seized accounts, which is (I'm assuming) why they are having trouble paying back their US players. It stands to reason that Full Tilt Poker is desperately trying to piece together and properly account for recent transactions to prove to the DoJ that they have frozen player funds in addition to operational funds. If Full Tilt is successful, then presumably the DoJ will release some of the frozen funds so that US players can be paid back. As mentioned, the DoJ wants every US player to be fully paid back.

So, if you are wondering why Pokerstars was able to pay back their US players so quickly, it's because they had their player funds segregated and protected, while Full Tilt Poker and UB/AP did not. If they had, then their US players would have been paid back already.

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