Posts Tagged ‘FullTiltPoker’

1500 Full Tilt Remission Petitions Denied by Department of Justice

Sunday, May 8th, 2016

Most (but not all) of the remission payments for balances on Full Tilt Poker have been resolved. However, a notice appeared on Friday on


GCG has been informed that the Department of Justice Asset Forfeiture and Money Laundering Section has denied approximately 1,500 Petitions. Petitioners flagged for denial have been notified via email. Please be sure to check your email account’s spam or junk folder to ensure the message was not filtered. Denied petitioners have ten days to appeal the decision.

Impacted individuals have until Monday, May 16th to file appeals.

HatTip: Kevmath

What Are the Tax Impacts of the FullTiltPoker Remission Payments?

Friday, February 21st, 2014

In less than one week, many poker players will finally receive their balances that they had at FullTiltPoker when that online poker site was shut down as a result of “Black Friday.” According to the Garden City Group (the claims administrator hired by the US Department of Justice to handle the remission claims), the first payments will be made by the end of February. So how much of the money you receive will be income? Will 1099s be issued?

The answer to the first question–how much of the remission payment you receive is taxable–is “it depends.” This will depend on each individual’s facts and circumstances. I did an interview with CardPlayer last year and talked about some hypothetical cases. Some of this will be a repeat of that article while some of this will be new.

For most individuals, the amount of money you will pay tax on from the remission payments is the amount you receive less the amount you deposited less any money you receive that you’ve already paid taxes on. Let’s take three individuals, all of whom receive their full balances next week.

1. Joe receives $1,700. He earned it all in 2011, starting with a freeroll. He’ll have $1,700 of income that will need to be reported on his 2014 tax return.

2. Russ receives $1,700. He earned it all prior to 2011, and has already paid tax on all the money he’s receiving. He will not owe any tax on the remission.

3. John receives $1,700. He had a balance on January 1, 2011 of $500 (he paid taxes on this in previous years). He withdrew $500 during 2011 (and paid taxes on that). He’ll owe 2014 tax on the $1,200 he receives that he hasn’t paid tax on.

Those are all relatively simple scenarios. I can imagine far more complex ones; indeed, I spoke with someone today who has such a scenario. There are people with disputed balances, “Red Pros,” affiliates and others who still don’t know what they’ll receive. Anyone who doesn’t have a simple, straightforward scenario should consider speaking with a competent tax professional regarding their remission payments.

The other major question is whether or not GCG will issue Form 1099-MISCs to recipients. We don’t know the answer to this, and we likely won’t know until early February 2015. GCG hasn’t said they would (nor have they said they wouldn’t); they’ve been silent on this issue. It may be they simply don’t know. If 1099s will be issued, the deadline for mailing them out will be January 31, 2015.

The problem with issuing 1099s is that for most individuals the amount of money being received will not all be income. Almost everyone deposited something on FullTiltPoker; the return of those deposits is clearly not taxable. I could speculate on whether 1099s will be issued, but it would be just that: speculation. Until GCG makes a pronouncement or we’re one year from today (when 1099s would have been received), we just don’t know. My hope is that 1099s will not be issued because almost every one of them would be wrong. If there is official guidance on this from GCG I’ll update this post with that information.

So we are definitely nearing the end of the FTP remission process. That is definitely good news.

Full Tilt Remission Deadline is Today

Saturday, November 16th, 2013

Today, November 16th, is the deadline for making a remission claim from Full Tilt Poker. (There are two exceptions noted below.) If you were not an affiliate of Full Tilt Poker or a Red Pro, you must file your claim today. You can file the claim by going to the Garden City Group’s Full Tilt Poker Claims website and clicking on the “File a Petition for Remission” at the top-left.

If you were identified as an affiliate or a “Red Pro,” you may have longer to file. The GCG stated that they will be sending a second email to such individuals in the coming days (weeks); impacted individuals will have 30 days from receipt of that email to file claims.

If in doubt, file that claim now. There’s an excellent thread on 2+2 with all the details of the remission process.

GCG announced yesterday that they expect to pay petitions where the dollar amount is not in dispute by March 31, 2014.

Tax Implications of Full Tilt Poker Remission

Tuesday, September 17th, 2013

I did an interview with CardPlayer Media on the tax impact of the Full Tilt Poker remission. (That remission process formally begins tomorrow, September 18th. More information on that is available at the claims website run by the Garden City Group.)

You can find the interview I did here.

Full Tilt Poker Remission Claims to Begin in Mid-September

Saturday, August 17th, 2013

The Garden City Group (GCG) posted the following information on the Full Tilt Poker Claims Administration website yesterday:

Important Update About the Start of the Claims Process

Starting on September 16, 2013, GCG will email a Notice with instructions on how to submit a Petition for Remission online to all potentially eligible claimants identified by GCG utilizing data supplied by Full Tilt Poker (“FTP”). The deadline to submit a Petition for Remission is November 15, 2013. Instructions concerning the filing of Petitions will be included in the Notice and will be posted on this website. Please continue to check this website for updates. Please note that the registration process for email notification is no longer available…

If you do not receive an email notice and you believe you are eligible to participate in the remission process, you may file a claim online using the directions that will be provided on this website.

Once claims are filed, GCG will have to verify the claims (relatively simple in cases where the claimant agrees with the information sent by GCG but more complex where there are differences), total the amount of approved claims by all claimants, compare that to the total available for remission, and then pay the claims. However, the DOJ then must approve the amounts.

While in theory claims could be paid this year (after all, this is all electronic information, etc.), it’s far more likely that the review and payment process will take at least 90 days and probably longer. I’d expect payment in mid-2014 based on the announcement, and take later rather than sooner if I had to guess. We could get lucky and have a Christmas present of the Full Tilt funds…but it’s far more likely to be a 2014 Christmas present.

Waiting for Godot: Full Tilt Poker Remission

Friday, July 19th, 2013

Back in high school I read Samuel Beckett’s classic play Waiting for Godot. For Americans who are waiting for remission to occur on money they had on deposit at Full Tilt Poker, this could be retitled “Waiting for Remission.”

In Waiting for Godot, Godot never shows up. I do think that eventually the funds will show up. Unfortunately, like everything in dealing with the government, this can accurately be titled “Hurry up and wait (and wait and wait and wait some more).”

CardPlayer Magazine published an article today noting that the Garden City Group [GCG], the entity that will eventually handle the claims (of remission), “…[have not moved] past the first step of parsing a massive amount of player data information.” This process was estimated by an unnamed supervisor to take a year or more.

Where does that put us on the road to remission? Let’s look at the steps required:

1. Government appoints claim administrator [done].
2. Government raises money/finds money [usually an issue, but probably not here given the $150+ million received].
3. Administrator develops plan to return funds.
4. Government approves plan.
5. Announcements, advertising, web sites developed to alert victims.
6. Government allocates two to six months (or longer) for victims to come forward to submit claims.
7. Claims are verified by Administrator.
8. Amount to be paid is tallied. If less than fund, everyone gets 100%; otherwise payments are made on a percentage basis.
9. Claims are paid.

It’s clear we’re on step 3. It’s also clear that for whatever reason the data provided to GCG is taking a lot of time to compile. I would have thought that this would be simple: GCG would have been provided a spreadsheet with users’ screen names, real names (and other personal information), and balances. It may be that each account is being reviewed for phony deposits (something Full Tilt Poker did), transfers or other activity. It may be the data sent to GCG was corrupted in some manner and needs to be “massaged.” Frankly, it could be just about anything. The only way to know is to have an on-the-record talk with GCG, something that’s not going to happen, or with the Department of Justice, and that’s not likely to happen.

Well, let’s work backwards on how long this will take. Paying the claims will likely take two to three months. There could be as many as 1.3 million checks being issued. Verification of claims and tallying the total could also take two to three months. There’s a huge volume of claims to be reviewed. Development of the announcements and advertising (ads will appear in major national newspapers) shouldn’t take long, but this step might take two months if the DOJ has to approve them; it could takes as little as 1 week. Expect the DOJ to take three to six months to approve any plan put forward–the government doesn’t work fast. And we know that we’re looking at 12 to 18 months to develop the plan.

Using these assumptions, the best case scenario is a little over 19 months for payments while the worst case scenario is 32 months. Given that the Garden City Group was appointed in March, that means the best case scenario would have payments made in October 2014; the worst case scenario would drag this out to November 2015. And that’s assuming the assumptions I’ve made are accurate; nothing prevents me from having missed something.

Additionally, there’s nothing that guarantees that players will be paid based on funds on deposit (when Full Tilt Poker stopped serving the US). Remission is discretionary; the DOJ can approve whatever plan they think is best. Full Tilt users were crime victims as far as remission is concerned; in the view of the DOJ, we should be happy with whatever we get.

Well, since this is going to take so long can we take a casualty loss today on our funds? No. The most likely case is that you will get something, just that it may take a long while to get that something. Certainty of a loss is needed to take a casualty loss; given that you will likely receive your money back, no casualty loss can be taken.

This post has probably made most of my clients with funds at Full Tilt unhappy. While I originally felt this would be handled expeditiously, that’s clearly not the case. Unfortunately, the time frame I’m estimating appears realistic.

I’m Glad I Didn’t Say Which Christmas

Wednesday, November 14th, 2012

Back at the end of July came news that the US Department of Justice had settled with PokerStars and Full Tilt Poker on civil claims, and that players would be paid back. I wrote,

When will players be repaid? If you are outside of the US (and this is determined by your residence on June 29, 2011), you likely will be repaid no later than November. If you are in the US, this remains unclear, but I’d expect you to be repaid before Christmas.

I was wrong.

I was expecting the DOJ to treat this differently from a ‘standard’ remission case, given that all the money was on hand and there was a complete list of who needed to be repaid. I was wrong: The bureaucratic procedure will be followed.

Yesterday, John Pappas, Executive Director of the Poker Players Alliance met with officials from the DOJ. A full statement from Mr. Pappas regarding the meeting is available. The gist of it is that is:

Our third objective was to get a sense of timing. Unfortunately, completion of a refund claims process is a long way away.

I now expect this to take many more months, perhaps more than one year for players to be repaid. Unfortunately, a realistic time-frame is 12 to 18 months from now. It could take less time if all the stars align, but it could take longer if something goes wrong. Poker players will be dealing with “bureaucracy at work.”

While what’s below isn’t the process, from a poker player’s perspective it might as well be. It’s definitely an example of how bureaucracy functions most of the time.

“The 2011 Purdue University Rube Goldberg machine shattered the world record for most steps ever successfully completed by such a machine. In 244 steps the ‘Time Machine’ traces the history of the world from Big Bang to the Apocalypse before accomplishing the assigned everyday task of watering a flower. The record has been sanctioned by the Guinness Book of World Records and the World Records Academy.”

DOJ Settles Civil Claims Against PokerStars & Full Tilt Poker; Full Tilt Balances to be Refunded to US Players; Settlement with Absolute/UB Also Referenced

Tuesday, July 31st, 2012

News came out this morning that the long-rumored deal that would have PokerStars acquire Full Tilt Poker, agree to pay the DOJ $731 million (the rumored amount was $750 million), and pay back players while settling the civil charges it faced came to fruition this morning. Press releases were issued by Full Tilt and PokerStars announcing the deal; a press release will be issued later today by the DOJ. The obvious questions are:

– Who will be repaying the Full Tilt players?
– When will players be repaid?
– What does this mean for US players’ taxes?
– Will PokerStars (or Full Tilt Poker) be returning to the US anytime soon?

Who will be repaying the Full Tilt players?
If you are outside of the US, PokerStars will repay you. A fund of $184 million will be set up, and withdrawals will begin within 90 days of the completion of the transaction — likely by the end of October.

If you are within the United States, you will be repaid by the Department of Justice (the US Attorney’s Office for the Southern District of New York). You will have to apply through remission with the DOJ to be repaid. I assume (but am not certain) that the FTP site or client will be reopened so that US players can look to see what their balances were. A fund of $150 million will be set up for the repayment. The exact process will likely be revealed in the press release to come from the DOJ, but here is a sample remission petition (Hat Tip: Taxdood).

When will players be repaid? If you are outside of the US (and this is determined by your residence on June 29, 2011), you likely will be repaid no later than November. If you are in the US, this remains unclear, but I’d expect you to be repaid before Christmas.

What does this mean for US players’ taxes? That income that wasn’t constructively received in 2011 will likely be constructively received in 2012. That means you will need to report your Full Tilt income on your 2012 tax returns. You may need to adjust your fourth quarter 2012 estimated payment.

Will PokerStars (or Full Tilt Poker) be returning to the US anytime soon? No. While the agreement specifically allows for PokerStars to apply for licenses if and when online poker is legalized in the US, the criminal charges against PokerStars were not settled. As long as PokerStars (or any of its owners, executives, or managers) faces a criminal indictment, they will not be licensed in the US.

Most gaming licensing boards are extremely reticent about licensing anyone with any sort of criminal past. If PokerStars were found innocent of the criminal charges against it, then they would have a chance of obtaining a US (or state) license. Until then, it is extremely doubtful that US players will see PokerStars (or Full Tilt Poker) back in the United States.

Buried in the DOJ Press release is the following:

In a related matter, the U.S. Attorney’s office also filed a motion requesting that the Court enter a settlement agreement reached with Absolute Poker/Ultimate Bet that requires the company to forfeit all of its assets (the “Absolute Assets”) in order to fully resolve this action. The motion also requests that the Government be permitted to liquidate the Absolute Assets, with the net proceeds of that sale to be held pending the resolution of claims filed by other parties who have asserted an ownership interest in the Absolute Assets.

It appears that US players can also apply for remission on their AP/UB balances. However, it is likely they’ll receive pennies on the dollar (or perhaps a penny on the dollar) as it is unlikely the assets of AP/UB have much value.

Once the DOJ announces the remission process, I’ll post about that. I now return to my scheduled vacation.

UPDATES: It’s remission, not rendition; the date being used to determine US (or rest of the world) residency is June 29, 2011, not April 14, 2011.

Casualty Losses, Constructive Receipt and Full Tilt Poker

Wednesday, December 21st, 2011

I’ve been asked numerous times over the past few weeks one question by poker players: “Can I take a casualty loss on the money I have tied up on Full Tilt Poker?” The answer is a definite maybe, but even if there is a casualty loss it will likely not be a 2011 event.

For those unaware, Full Tilt Poker was one of three business offering online poker to Americans before April 15, 2011. On that date, the US Department of Justice indicted Full Tilt, PokerStars, and Absolute Poker/UltimateBet. The companies were accused of bank fraud and violations of the Unlawful Internet Gambling Enforcement Act (UIGEA) and other statutes. Yesterday, Brent Beckley (one of the founders of Absolute Poker) pleaded guilty to conspiracy to commit bank fraud and wire fraud and conspiracy to violate the UIGEA. His sentencing is scheduled for April 19th.

Of the three businesses, PokerStars has fully repaid its customers. Absolute Poker/UltimateBet announced that the business is closing, with assets being sold in an attempt to repay customers. Full Tilt Poker, after being accused of being a Ponzi scheme, was sold to Group Benard Tapie (GBT). According to reports, GBT will repay non-US customers while the Department of Justice will repay Americans.

So let’s get back to the original question: Can an individual take a casualty loss on his funds at Full Tilt Poker? First, we need to determine whether there has been a casualty loss. A casualty loss is a sudden, unexpected or unusual event where an individual loses something of financial value. There is no doubt that the loss of funds from Full Tilt Poker’s collapse was “sudden and unexpected.” However, there’s a problem with this being a casualty loss. Given that the DOJ and GBT do expect to repay Americans, there’s no loss today. There may be a loss at some future date if funds aren’t fully repaid, but today the most likely possibility for Americans is full repayment sometime in late 2012. That means there is no casualty loss.

This is even true for Absolute Poker/UltimateBet. Given that AP/UB is attempting to sell their assets and repay players, we do not have certainty of what will be lost (or won’t be lost). And certainty of loss is another thing needed to claim a casualty loss. While I doubt that AP/UB will fully repay players, it’s probable players will get something. Until we know what that something is, it’s not yet time to take a casualty loss.

The other question that goes hand-in-hand with this is whether individuals need to claim money “won” on Full Tilt Poker (and Absolute Poker/UltimateBet) that they did not cash out before April 15th. Here we must look at whether individuals constructively received the funds.

The doctrine of constructive receipt governs when income is reported in the United States. If you receive a check on December 29th you can’t hold it until next year to defer the income. You had the funds in your possession (albeit as a check), and there’s no reason you couldn’t have deposited them in December. You constructively received the money and its income in this year.

The same principle holds in reverse. When there is substantial doubt as to the paying of the funds, you do not have constructive receipt. With Full Tilt Poker and Absolute Poker/UltimateBet, such doubt definitely exists. (Given that the Department of Justice has charged Full Tilt Poker as being a Ponzi scheme, even the US government sees this doubt.) I can’t see constructive receipt existing here. (Note: For anyone who received funds from Full Tilt Poker or Absolute Poker/Ultimate Bet in 2011, there is definitely constructive receipt.) Until the funds are repaid, there likely is no constructive receipt.

Finally, I’ve been asked, “Can’t I just deduct the money I had on Full Tilt Poker (or Absolute Poker/Ultimate Bet) as a gambling loss?” No. You clearly did not lose the funds in a wagering event. This isn’t a gambling loss. This may be a theft or loss of funds on deposit, but today all we know is that the funds are in limbo.

News Report: Full Tilt Sold

Friday, September 30th, 2011

PokerFuse is reporting that Full Tilt Poker has been sold to Group Bernard Tapie. The deal is conditional on factors including a favorable resolution with the US Department of Justice. PokerFuse reports that the deal calls for repayment of all players…eventually.