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5050 Poker Holding AB has officially announced that they are able to refund only 15% of their players’ money frozen on their room accounts. The Holding claims to have been cheated by their subsidiary company 5050 Poker Ltd.
[3]In mid-June, 5050 Poker, then part of the Microgaming network, became unavailable to players and withdrawals from the room got suspended. In an official statement, the room stated that the actions of the Microgaming network, deemed discriminative by 5050 Poker itself, to reduce the number of playable tables to 2 at certain operators, including 5050 Poker, in addition to the introduction of the True Value rakeback system, much like Ongame’s Essence, come 1 July, rendered it impossible for the room to remain profitable. Moreover, they announced that they would consider suing Microgaming for damages. Finally, 5050 Poker confirmed what players had already experienced, that as long as audits take place, the room would not fulfil withdrawal requests.
What followed was a press release from the Microgaming network, stating that they had terminated their contract with 5050 Poker, as the room had failed to pay their debts to the network and overspent their account, violating the terms and conditions of the contract.
The Lotteries and Gaming Authority Malta (LGA) revoked the 5050 Poker licence on 27 June and announced that they had initiated an investigation for players’ money frozen on the accounts of the poker room. Players who have money with 5050 Poker are advised to contact LGA.
5050 Poker parent company 5050 Poker Holding has now issued yet another press release, announcing the liquidation of their subsidiary company 5050 Poker Ltd and stating that they are able to refund only 15% of players’ money.
The 5050 Poker Holding press release reads as follows:
“Information to the shareholders of 5050 Poker Holding AB (Publ.) and to players holding with accounts 5050poker
Background
On the 7th of June Microgaming, without prior warning, limited the number of tables that can be played simultaneously by one player from 20 to 2, seriously affecting 5050 Poker Ltd.’s ability to pursue business. As a result, a critical mass of players decided to leave 5050poker and withdraw their money. This “bank run”, in addition to that Microgaming continuously has been fining 5050 Poker Ltd for having too many winning players, made visible that there was a negative balance in the clearing house, i.e. there were not enough money in the company account to cover the player’s balances. As a consequence of this negative balance Microgaming decided to shut down the operations of 5050 Poker Ltd on the 15th of June. Since then, the company has been investigating how this situation could occur and how much money that is available to cover the players’ balances.
Liquidation of 5050 Poker Ltd
The investigation has so far resulted in the following findings:
- The operational costs of 5050 Poker Ltd has for a long time exceeded the revenues, resulting in players’ funds being used in the operations of the company.
- This has been enhanced by the fact that Microgaming, has been fining 5050 Poker Ltd. In excess of €150,000, that incorrectly has been withdrawn from the players’ accounts.
- The reason why this has gone undetected is that the Board of Directors of 5050 Poker Holding AB has, from the management of 5050 Poker Ltd. and the auditors of the company, been presented with false information on the size of the players’ fund, the costs of operation as well as the size of the company’s assets.
As a result of this, the Board of Directors of 5050 Poker Holding AB has decided to liquidate their subsidiary company 5050 Poker Ltd. The liquidation is due to the fact that LGA has requested guaranties to a level that exceeds the assets in the company. Therefore this decision is taken in the spirit of saving as much assets as possible to be able to pay back to the players. It is our belief that a liquidation of 5050 Poker Ltd will best serve the players’ interest during the current circumstances.
Managing Director of 5050 Poker Holding AB, Patrick Sjögren, has been relieved from his duties
When the current situation became clear to the Board of Directors of 5050 Poker Holding, it was decided in consensus to relieve Patrick Sjögren from his duties as a Managing Director of 5050 Poker Holding AB. Therefore Patrick Sjögren does not represent the company any longer. However Patrick will assist in the process of investigating how the current situation could occur.
The board has appointed Cem Yeter and Olle Langenius, both Directors of 5050 Poker Holding AB, to fully investigate how the current situation could occur and to try to save as much of the hareholders’ value as possible. The board´s resolution is supported by a majority of the owners. This work will include in supporting the LGA in trying to find out how this could happen and how much player values that has been lost.
Assets in 5050 Poker Ltd do not cover players’ funds
It has become clear that the losses in 5050 Poker Ltd has been built over a longer time, (more than one year). Due to the fact that incorrect information about the size of players’ funds and the size of the company’s assets has been presented to the Board of Directors, this situation has gone undetected. The request for bank guaranties from LGA cannot be met by the company, thus leaving 5050 Poker Holding AB no other option than to liquidate its subsidiary 5050 Poker Ltd.
This will most likely mean that most of the assets available will be used as paybacks to the players on a proportional ratio. Even though the exact figures are not available at the moment, there is no reason to believe that the payback ratio will be higher than 15% of the actual balance of the players’ funds.
It is unclear how this situation has gone undetected by the appointed Auditors in Malta for 5050 Poker Ltd, nor by the auditors for 5050 Poker Holding AB, both having revised the accountings for 2011.
The Board of Directors of 5050 Poker Holding AB has ordered a balance sheet for liquidation purpose
As a result of the fact that 5050 Poker Ltd is being under liquidation, a decision to make a balance sheet for liquidation purpose (Sw: kontrollbalansräkning) for 5050 Poker Holding AB has been taken. This information has been previously communicated.
Since operations in 5050 Poker Ltd has stopped no revenues or dividends will be generated to the mother company 5050 Poker Holding AB. Therefore the Board of Directors will pursue the possibility to sell the company in order to save as much share holder value as possible.“