Eurolinx and BetOnBet Liquidations: Industry Reaction

Eurolinx and BetOnBet Liquidations: Industry Reaction

By Dan Cypra for POKER NEWS DAILY | Posted on August 22, 2009

On Friday, online poker players around the world learned that Eurolinx and BetOnBet, both owned by Linx Media Group, would be liquidated. The industry has now had 24 hours to digest the news.

A simple message posted on Eurolinx’s website on Friday read, “The Linx Media Group has today announced that it is seeking to put its businesses into liquidation and will cease trading with immediate effect. As yet, the Linx Media Group does not know how long this process will take, but it will provide updates on the situation as and when information becomes available and when liquidators are appointed.” The Microgaming Network released a statement labeling the companies “insolvent” and revoked their licenses. Also affected was Linx Casino, which had been open for a scant four months.

Traffic on the Microgaming Network has trended downward in recent months. Dan Stewart of PokerScout.com told Poker News Daily, “Microgaming has seen its market share decline, but then again so have a lot of sites, which have been losing share to PokerStars and Full Tilt Poker. The Microgaming Network still has a healthy amount of traffic and we don’t know how much business the individual licensees are doing.” The Microgaming Network is the eighth largest worldwide according to Stewart’s site, boasting a seven-day running average of 1,760 real money ring game players.

Stewart added that Microgaming Network traffic is down 25% over the last five months. Meanwhile, Full Tilt has doubled in size over the past year and PokerStars is up 54%. Some in the industry have forecasted consolidation in order for sites to continue to be financially viable. Stewart explained, “We’re definitely seeing consolidation, not in terms of acquisitions, but essentially PokerStars and Full Tilt collecting players. This may be a symptom of that.” Eurolinx and BetOnBet did not accept players from the United States. Other Microgaming Network sites include Betway, Gnuf, Intertops, PokerTime, and Unibet.

Former Vice President of Marketing for PokerStars, Dan Goldman, told Poker News Daily that online poker sites must change their views toward player deposits moving forward: “Online sites have the same responsibility to their players as banks have to their depositors. All too often, they treat player bankrolls like their own money.” Affected online poker players on the TwoPlusTwo forums lamented that as much as $140,000 was now frozen on Eurolinx as a result of the liquidation efforts. Players will likely file claims once the proceedings have begun, which first requires a liquidator to be named.

Goldman explains how the shift in focus could begin: “A good first step is the segregation of player funds into entirely separate, externally auditable accounts. This is a simple step that, in addition to bolstering confidence in the site, helps to avoid the temptation to use player funds for operations.” The parent companies of several online poker sites are publicly traded on major stock exchanges around the world. Party Gaming (the parent company of PartyPoker), 888 (the parent company of Pacific Poker), and Ladbrokes can all be found in London, while bwin is traded in Vienna.

Meanwhile, forums like TwoPlusTwo have seen a flurry of discussion about the liquidations. One poster, “DrGutshot,” reported that he requested a $7,700 cashout in April that never arrived. Expectedly, he was not pleased to hear about Friday’s news: “I despise these lowlifes. Count me in on any cooperative legal action if we can come up with anything.” Another TwoPlusTwo member, “jokotokolino,” spoke to Eurolinx’s Jo Remme and reported, “What was clear for me about his story was that they have been trading with our funds and that went extremely wrong. The word ‘trading’ he used himself.”

Eurolinx and BetOnBet no longer appear on the Microgaming Network’s list of clients. We’ll keep you posted on the latest right here on Poker News Daily.

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