UB.com Absolute Poker “Bankruptcy” Fears a bit Premature
We’re not saying it definitely won’t happen, but for the time being, UB.com and Absolute Poker seem intent on staying in business and, as such, fears of a “looming bankruptcy”, as reported by Mike Brunker of MSNBC.com, might be a little bit premature.
UB.com and its sister site Absolute Poker were among those indicted by the US Justice Department on April 15 along with PokerStars and Full Tilt Poker. All three of these companies had their domain names seized by the Feds. Both PokerStars and Full Tilt have completely exited the US market while UB.com continues to allow current customers from the US to play for real cash.
Some important considerations:
The talk of bankruptcy seems to revolve around a complicated corporate structure that even those of us at Gambling911.com cannot begin to figure out. There have been shareholder feuds over the past few years.
Doug_Funnie posting on the TwoPlusTwo.com forums attempted to explain the intertwining corporate structure at UB.com:
UB/AP is not declaring bankruptcy based on the information made available. The company jettisoned one large bondholding group last year for UB software/customer lists, jettisoned a second larger bondholding group this year, reduced staff to skeleton levels and have several if not all company accounts frozen by the Department of Justice.
The second bondholder (Madeira) is facing liquidation because UB/AP told them there would be no more payments. Bondholder members have looked into UB/AP financials with concern because of specious expense items suggesting principals earned money using questionable methods. Madeira has no assets and apparently no funds/taste to finance a complicated international legal fight for any UB/AP assets. UB/AP has not made public any financials.
The company structure is hella-complicated, but the beard/shell/face is based in Antigua. Actual controlling corporate entities may reside in the Antigua, BVI, Panama, Belize, Malta or others.
More importantly, perhaps, is that UB.com has reached out to Gambling911.com this week, ensuring an open communications channel moving forward. We were the first to receive the official company press release regarding downsizing and restructuring. This hardly sounds like the action of a company looking to close shop any time soon.
A letter sent out to employees of UB.com/Absolute Poker prior to the official company press release noted that a large portion of the staff would be let go but others would be called back to work at a much smaller firm focusing on the non-US market (including Canada and Europe), its software product and casino ventures. Some of those employees appear to have been called back already based on reports.
We would note that the cost of acquiring US-based players has exploded due to the high risk assessment imposed by processors. Already US-based affiliates are seeing a reduced commission percentage at many online gambling companies in order to offset costs.
UB.com has hired a big name law firm to work with the US Justice Department in hopes of expediting funds. UB.com could have saved itself some money by just shutting down and giving the Justice Department the middle finger. That hasn’t happened.
Nobody can say for sure what is going to transpire with UB.com/Absolute Poker. The point of this article is to suggest fears of the company’s demise are just a bit premature at this point in time.
- Christopher Costigan, Gambling911.com Publisher
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