Gambling911.com World Exclusive: Lock Poker CEO Jennifer Larson Interview
In her first ever sit down interview, Lock Poker Founder and CEO talks about recent concerns surrounding her company and the strategy moving forward.
Lock Poker last year migrated to the newly formed Revolution Gaming Network and the growth pains have been felt ever since. Compounding these growing pains is the lack of payment processing available. This has led many to question the company’s financial stability.
G911: Why not offer proof of solvency if Lock Poker is so financially sound? Why you do not have a 3rd party verify that player funds are segregated and safe?
Larson: The DOJ has shown repeatedly that it can and will seize players' funds and hold these for months - if not years - absent any valid legal basis to do so.
This situation makes it impossible for Lock to provide any independent, third party verification of the segregation and amount of player funds. We have spoken to a number of companies that provide such audit services, however, they are unable to state that if pressured by the US Government they will not disclose the details of the Lock accounts they audit. They have been frank and acknowledge that they want to be able to conduct business with US companies and admit that the threat of being "black listed" by the DOJ, even if informally, cannot justify their taking on Lock as a client. No other online gaming site has or can publicly open its "books".
G911: Let’s clarify the player-to-player transfer issue. Many people have posted emails from Lock support stating that NO FUNDS FROM PLAYER TRANSFERS, OR WINNINGS DERIVED FROM TRANSFERS can be cashed out. We have since had Lock come out to try and clear up this issue but can you personally clarify the Lock Poker p2p transfer policy?
Larson: Through a detailed investigation over the past few weeks the Lock security team uncovered a large group of persons that were abusing the P2P transfer policy and creating a large network of mule accounts to move and withdraw funds without any play at all taking place.
Lock has introduced a new cash-out policy for transferred funds which requires a player to accumulate at least 15% in GGR on the funds received via P2P transfer before these funds are cashed out. Put simply, for every $100 of transferred funds to be withdrawn, $15 of rake or fees will need to be accumulated beforehand.
The policy change was put in place explicitly to put an end to money laundering via Lock's player transfers. Players withdrawing winnings are not affected. It is important to note that many sites have similar policies regarding cashing out P2P transferred funds or do not allow such transfers at all.
G911: What is the reason for the slow withdrawal times?
Larson: There are a number of reasons for slow withdrawals. As explained above, we uncovered a money laundering ring that created a network of mule accounts that were buying and cashing out players' bankrolls with no play. This caused a massive increase in withdrawals causing legitimate players' cash outs to be delayed. The other main reason is that Lock is one of the largest poker sites that continues to serve players in most States in the US. This means that all Lock payments processors must be discreet. Lock has a number of processors it can use to flow funds to players but are all subject to limits. So while Lock has all the players' funds to pay out it is limited in the ability to do so by the constraints of the system and the threat of the seizing of player funds. The E-comm team works constantly to find new, reputable payment processors to provide secure, fast options to our players. Our number one priority right now is reducing payout times over the next few weeks.
Lock Poker hosted a retreat in Porto, Portugal earlier in the month of May
G911: What have been some of the obstacles encountered with Revolution?
Larson: We definitely have had some growing pains this year. One of the biggest obstacles was largely software related. We have a substantial player base and because the Network was much smaller when we joined they were not ready for the surge of Lock players. We struggled through several outages, hardware failures and server-side issues. These were unexpected and made it very difficult to provide our players with a true Lock experience. The network team rose to the challenge of building out a much more robust set up to facilitate our traffic. This is a work in progress.
The other ongoing challenge for us and all online poker networks is creating and sustaining a balanced network ecology. Based on my experience this is achieved by all partner sites investing in new player acquisition, player loyalty and retention and maintaining a strong growth pattern. On Merge the ecology was healthier because there were partners with aggressive marketing budgets who were focused on bringing in new players and liquidity. That was not the case on Revolution. Lock was the only room investing aggressively in new player acquisition and growth. Lock represented the majority of the network liquidity. It is such a challenge for larger rooms to be in a pool of much smaller rooms with limited marketing budgets and very few recreational players. When joining the network we invested millions into overlays, player incentives, new acquisitions while the network struggled to provide a stable product. Taking the network from #24 to #8 worldwide in 6 short weeks was not an easy feat.
G911: Does Lock Poker own the Revolution Network?
Larson: No. There has been a lot of confusion and misinformation about the ownership of Revolution Network. In the spring of 2012 Lock entered into negotiations to purchase selected assets from the Network. One of the conditions of the purchase was the rebranding of the Network and this step took place. Ultimately the proposed purchase was not completed and Lock never became the owner of the network. A Company completely independent of Lock made the purchase. The Network team does work very closely with Lock based on Lock being the largest room. We therefore have an impact on the overall direction and weigh in on the big decisions.
G911: There was some degree of controversy surrounding a recent event that took place in Porto, Portugal. It was the second Lock Poker company retreat and posting forum observers were quick to point out some of the more extravagant aspects of this trip such as accommodations in a historic palace and transportation offered by a fleet of limos, all the while payment delays continued. Tell us what really happened in Portugal. What was the reason for the trip and do customer deposits pay for such trips?
The Lock Gaming Group, which owns and operates the Lockpoker.eu and Lockcasino.eu sites, recently completed a 3 day retreat in Portugal. This was not publicized in advance or during the event in order to protect the privacy of the attendees which included Lock staff, consultants, members of the Lock Pro team and suppliers. This event was a combination of business meetings, strategy sessions and social gatherings. The Lock Retreats are annual and included in our budgets and paid for out of the company profits.
In Part II of our interview with Lock Poker CEO Jennifer Larson, we discuss how the company looks to address communications issues, why some of the Lock Poker pros decided to part ways last week and if Lock was really affected by the banking crisis that transpired in Cyprus. Go Here Now to Read Part II
- Chris Costigan, Gambling911.com Publisher
