Players of 5050 Poker can expect to get no more than 15% of their money back, according to a press statement from 5050 Poker Holding AB. They claim to have been deceived about operating costs, player funds and company assets by the management and auditors of their subsidiary 5050 Poker Ltd.
Microgaming skin 5050 Poker went offline in mid June and withdrawals were immediately halted. A week later it was announced that it would liquidate. Its regulator suspended its license soon after.
“The operational cost of 5050 Poker Ltd has for a long time exceeded the revenues, resulting in players’ funds being used in the operation of the company,” writes the shareholder statement (embedded below). “Board of Directors [of the parent company] has been presented with false information on the size of the players’ fund, the costs of operations as well as the size of the company’s assets.”
It continues: “… there is no reason to believe that the payback ratio will be higher than 15% of the actual balance of the players’ funds.”
The parent company is listed on the NASDAQ OMX exchange in Sweden and has only one real asset: The operating company 5050 Poker Ltd which is based in Malta and licensed by the Maltese Lotteries and Gaming Authority (LGA).
The parent company also blames Microgaming, its network and software provider, for changing rules and imposing fines. It is understood that Microgaming has imposed 2-table caps for all players on certain poker rooms which did not meet certain network targets. Apparently these changes were the straw that broke the camel’s back.
It is plain from the press release that the poker site had been using player funds for operating expenses for a considerable time without being questioned by the owners, auditors or regulators.
The LGA has asked for bank guarantees that the company doesn’t have the funds to provide and so the Directors have no option but to liquidate the company.
They plan to sell the parent company, “to save as much shareholder value as possible.” Assuming that the assets of the Maltese based company are all sold to repay creditors including players, then as far as can be seen from the accounts, there will be very little in the quoted company worth anything for shareholders to recover.