Microgaming has terminated its contract with licensee 5050Poker for “non-payment of monies”.
The announcement by the owner of the Microgaming Poker Network (MPN) follows 5050 last week suspending player payments and “preparing a balance sheet for liquidation purposes”, after multi-tabling limits and suspension from the network left it unable to operate.
The poker network, home to rooms such as Ladbrokes and 32Red, said today it had no choice but to terminate 5050Poker’s contract after the skin had failed to rectify the material breach raised upon its inital suspension on 15 June, namely the “non-payment of monies owed to cure their overdrawn network clearing account.”
5050Poker has laid blame for the two-table cap that led to player confidence being irrevocably damaged with “major economic consequences” on Microgaming’s purge of “unwanted gaming operators (whose players mostly belong to the winning players category).”
The poker room, listed on the NASDAQ OMX First North exchange in Stockholm since last September, frankly admitted that “[m]ost of our players tend to play more than two tables”, therefore placing it in the category of skins providing a high ratio of high-raking, net-winning players that the MPN has been attempting to limit, most recently via its “True Value” rake allocation method.
The room’s collapse followed 5050Poker falling to a first-quarter operating loss of SEK43,000 (approx £4,000) and post-tax loss of SEK215,000 (approx £20,000) that it blamed on currency fluctuations and Microgaming “again unilaterally [changing] the network rules, meaning that gaming operators with winning poker players are ‘punished’ in the shape of a fine.”
The two-table cap that 5050 said had eventually resulted in it unable to operate in a “business-like way in the short-term” does not however appear to have been unilaterally imposed by Microgaming, as players on other rooms on the MPN are still able to simultaneously sit at up to ten tables. 5050Poker’s parent company said its board was looking into the possibility of making a financial claim against Microgaming for the damage caused to 5050Poker by the rule change.
PokerHolding AB had bank deposits of SEK5.7m (£518,000) as of 31 March, with its liabilities of SEK4.6m (£419,000) “well covered” by its assets of SEK7.7m (approx £695,000), consisting of cash and bank assets of SEK617,000 (£56,000) player deposits of SEK5.1m (£465,000) and receivables of SEK1.95m (£178,000).
The company has yet to issue a statement on when it plans to pay its players back their outstanding balances. 5050Poker had 14,894 registered and 1,704 active players as of 31 March 2012.
