10th October 2012
People have asked how I was impacted by Black Friday and the FTP fiasco and while I heavily sympathize with the people who have had their money tied up and held hostage since Black Friday, I didn’t have any money on deposit with Full Tilt so it didn’t really impact me in the normal sense. I did however almost buy a piece of FTP around 2004 and am owed money by an owner of FTP so it has impacted me.
Around 2004 I came extremely close to buying a 2 or 3% share of Fulltilt Poker my main concern wasn’t really IF I was going to buy a percentage of FTP, but how rather how much I was going to buy (I was offered up to 3 percent).
I remember talking with Howard Lederer at length and while I was a bit reticent when I learned what others had paid for their shares, (not only wasn’t I getting in on the discounted first tier rate, I was actually paying more than the secondary investors as well). In short I was getting in at the tail end of the FTP investment chain, and while this didn’t really appeal to my sense of relative value, it was either a good investment at this price, or it wasn’t.
And with that I decided to press on. Howard even had talked to me about the possibility of me getting reduction in price if I actually did some work for FTP. At the time I had been consulting for an online gaming company for about 4-5 years, so I had a bit of experience in this field.
I decided that it would be wise to meet with Chris Ferguson and the guy they were hiring as their CEO. So one night in 2004 I visited with Ray Bitar and Chris Ferguson.
We had dinner and I chatted for I think around 3 hours and to say that I came away less than impressed with Ray would be under selling it. I remember having difficulty expressing this to Howard delicately. Howard remarked that while Ray might not have been as sharp as him or Chris, nobody was going to outwork Ray.
To me Ray’s lack of sharpness wasn’t really the issue. The issue was that I kind of felt he might have been actually been dumb. I even mentioned this to Howard but I am not sure if I used the term “dumb” or some other derogatory dismissive term.
In the end I decided that I wasn’t really interested in doing any other non sports betting work at that time, and I was not going to pay a markup to invest in what was at best a grey area gaming company headed by a (hardworking) Buffoon.
Ultimately I declined.
As the years passed, and the FTP shareholder distributions started rolling in, I was largely ridiculed by a lot of the owners of FTP, and rightly so by all accounts.
How bad was the decision financially?
Each percentage of FTP that I would have bought would have netted me around $4 million in distribution payments. So by not investing I probably cost myself somewhere in the neighborhood of $10 million bucks (depending on if I bought 2 or 3%).
When Black Friday hit I felt somewhat vindicated, but clearly I still regretted passing on an investment that would have netted me +10m in profits.
So while I didn’t have any money tied up in FTP, nor was I an investor / owner, I was still somewhat invested as one of the owners owed me (and still owes me) a rather large sum of money.
Black Friday, FTP and why everyone needs a friend like Daniel.
Unless of course you are Daniel Negreanu, he seems to have an easier time than most. Daniel is unapologetically loyal, and luckily for him (at least in his eyes) most of his friends have done no wrong, and most of his enemies can’t seem to ever do right.
I say most because Erick Lindgren is one of Daniels closest friends. Daniel hasn’t given Erick the rough treatment he normally gives people the people he has earmarked as villains. But he has talked about how what Erick did was wrong and that he is a just an old fashioned run of the mill degenerate.
As an aside the word Degen has been used a lot in the poker and gambling world and I think we are doing ourselves a disservice by deifying people with a “lot of gamble” as being “degen”. There is nothing cool or admirable about gambling way above your head if it means you have to borrow and stiff in order to do so.
Erick the Degen has owed me and countless others money for a number of years and never quite got around to settling these debts while the FTP money train was chugging along. I’d estimate that Erick received at least $12 million from the sale of some of his full tilt shares as well as the monthly dividend distributions.
Note that I arrived at $12 million as Edog’s distribution figure because at one point he owned 3% of the company. FTP insiders have reported that the company paid out approximately >400 million in distributions, and he also so either sold a share or took a 1 year pawn shop style loan against a percentage of his ownership at some point in March of 2008.
I found out about this loan / sale from a friend and when I confronted Erick about it (he never offered to pay me any money) he at first denied that he was doing that then acted all indignant when I confronted him. I actually went to Howard and explained to him the situation and at that point Erick begrudgingly paid off roughly 20% of what he owed me. This 20% payment represented less than 10% of what he actually received from selling his share.
He also promised to make regular monthly payments as soon as his monthly distributions came in to clear up the rest of our figure in approximated 1.5 years time. These payments I think lasted 1 or 2 months before Erick started avoiding me and being unresponsive.
it took him 6 begrudging years to do so, which at the time was 5 years longer than he claimed it would take him to initially pay off the figure.
After Black Friday, the FTP money train stopped chugging along, and with that Erick went from;
A guy who was comparing his wealth to that of Hollywood Actors slash Comedians
The truth is Erick was always a deadbeat, he was just a deadbeat who happened to have a money tree in his backyard in the form of his 2-3% ownership of FTP. He was actually worse than a deadbeat because rather than pay off his debts with his distribution payments, he’d end up up gambling even more with new people and lose more money.
At one point I told Erick that all he had to was just chill for a year and he’d have everyone paid off with all his FTP money. For whatever reason that didn’t really appeal to him.
Daniel to his credit did call Erick out on twitter. But Erick didn’t receive the usual rabid KidPoker treatment.
How you could not call a guy out who was outright stiffing and slow paying people during the same time period he received $12m in distributions is beyond me?
If you are receiving ~$250k a month and choosing to gamble that money rather than pay off your debts, in my books that you are a stiff and deserve to be called out for it.
Note that the $12m figure didn’t include an additional $4 million that Erick received immediately before Black Friday. Half of which was a loan, and half of which I believe was theft.
Whats that theft?
Yes there was the small matter of him asking for a $2 million loan from Chris Ferguson in April of 2011 and actually receiving $4 million by mistake.
I commented on twitter that if it was Daniels arch enemy Annie Duke who had borrowed the $2m, and for all intents and purposes “stole” an additional $2m when refusing to return it, Daniel probably would have been foaming at the mouth to talk about what a thief Annie was. (Yes receiving money in a clerical error and not returning it is usually classified as theft).
And while I don’t think Daniel is required to attack his friends with the same venom he attacks his enemies. I do think he needs to be a little more balanced about things.
Recall that at one point he video blogged about how he would have loved it if Howard Lederer got assaulted (I think with a baseball bat I can’t quite remember and can’t be bothered to watch it again), and yet when it when it came to discussing Erick he kind of shuffled it off.
Daniel even went so far as to split hairs (incorrectly I might add) and claim that although receiving AND KEEPING a $2m clerical error was wrong, it wasn’t actually fraud or theft.
Finally I’d like to add that I didn’t really intend this to be an attack on Daniel I just expected him to be a bit more balanced in his critique of Edog. And while Daniel definitely gets a bit too riled up for my taste in his crusade of good vs evil in the poker world. He seems like the kind of person who would rather starve than stiff someone.
In addition Daniel is very loyal to his friends, and I admire that quality. In fact I think that everyone deserves a doggedly loyal friend like Daniel.
Mine is named Coltrane.
And Coltrane is nothing if not a superhero.
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