As was reported on this very site by Sadonna Price yesterday, the latest US online poker cashout report (written by 4Flush’s John Mehaffey) has been posted at the website pokeraffiliatesolutions.com and the August report raises some serious concerns over the solvency of Lock Poker.
You may recall that when the fit hit the shan for Lock Poker back in May the site claimed it would have its withdrawal issues cleared up by July. Well, we are now into August (actually nearing September) and the cashout situation at Lock Poker hasn’t really changed (any improvement is anecdotal and minimal in nature), and other recent actions by the beleaguered site are not helping instill any confidence in it.
While I’m usually pretty measured in my criticisms, (I’m not the type to run out of the house screaming at the first sign of a little smoke), it’s becoming very clear that there is something rotten in Denmark, or more specifically at the Lock Poker headquarters –wherever that might be; Germany, Cyprus, Canada, who really knows.
In the past I’ve enjoyed playing the role of Devil’s advocate for Lock Poker (always with the caveat that I don’t feel my money is secure at any US sites; some being worse than others), and focusing on pumping the brakes and explaining the difference between fact and opinion. But the site has now officially used up its “just give us time, we are working on it” excuses, and my Devil’s advocacy ended many months ago.
I’ll go into this in more detail below, but at this point it doesn’t matter if Lock is honest or dishonest, they’ve been assailed (justifiably) more times than Rasputin, and the survival of their company is no longer predicated on guilt or innocence. The people who have been railing against the site for years should be starting to pull out their Red Auerbach victory cigars right about now, since even if the site turns it all around tomorrow it is likely a case of too little too late.
Past Due Notices
Forget all the Girah nonsense, cancelled tournament series, and things like the brief signing of the slightly checkered Tim West; the problem is, and always will be, withdrawal times. Let’s put it this way, we are well past second and third notices here, if Lock Poker were a tenant they would likely find their belongings out on the street corner considering the wait times on payments that are being reported by 2+2 users.
And you have to figure that once confidence in a poker site’s ability to pay hits the 30% mark (about what Lock Poker funds trade for on the dollar) you have a real crisis on your hands. Whatever issues Lock Poker was facing or mini-scandals their name was attached to, it was their complete inability to pay their players in anything approaching a timely manner, coupled with the vague statements about things in motion, and the “nothing to see here” attitudes Lock reps displayed on the forums, that was their poison pill.
Basically, around May it became clear to everyone that no new money would be coming into Lock Poker’s coffers unless they did a complete 180° in days, not weeks and months. Privately I voiced this concern, explaining to different people that even if the site was telling the complete truth, the damage to the site was too great to ever be undone. The failure to turn things around by their self-imposed deadline was the final straw.
Abandoning the 2+2 Forum
If withdrawal times that stretched so long that they began to be measured in seasons instead of weeks was the site’s poison pill than the site’s decision to leave the 2+2 forum was what I will now tepidly call: “the worst move in the history of worst moves” – Lock Poker basically played the role of Chris Webber, Leon Lett, and Bill Buckner all rolled into one when they left 2+2. Leaving 2+2 would be akin to having a debate and one participant simply throwing their hands in the air and storming off the stage.
The REAL Problem
I don’t think there is anyone (ok, almost anyone) that goes into business with bad intentions; for most businesspeople that go astray it’s just a matter of poor judgment or the feeling of being backed into a corner with no other options that overtakes you, and before you know it the downward spiral has begun. This is pretty much what I feel happened to Lock Poker.
The real issue with Lock Poker is simply that there isn’t a market for online poker in the US, at least not on the scale that Lock Poker envisioned it to be –the site was basically selling Compact Disks in 2013 and thinking everyone was a potential customer, so they overbought inventory and couldn’t figure out how to sell it. Lock Poker wasn’t content to simply service a couple thousand players; instead they continually went after the top spot without considering the possibility that like turning lead into gold (which is possible) the cost to do so far outweighs the return.
This combination of the volatile US poker climate and failed and imprudent attempts to become the top dog in the US market was the genesis of the site’s current woes, but making matters worse was Lock Poker’s attempt to right the ship (a series of mis-, dis-, and non-information campaigns) that were ill-conceived and at times downright pitiful – Picture Lock Poker as OJ Simpson in the opening scene of the Naked Gun and you’ll start to get the picture of how bad it has looked at times.
So what happened was quite simple (conjecture alert!): Lock Poker was spread so thin trying to dominate the US market that any serious problem would expose them. Whether it was Cyprus banks, a rogue payment processor, a longtime nemesis pulling strings, or a high-priced retreat for employees, doesn’t really matter; the business model itself was doomed to fail, because eventually something was bound to go wrong and expose the fact that the company was likely only surviving on new deposits. They were exposed like a homeowner with only a few hundred dollars in their savings account who suddenly realizes they need a new roof, a new water heater, or have a tree that needs to be removed.
To be clear: I don’t think any US online poker rooms have 100% of their player deposits on hand, nor do they need to in order to pay customers –this is only a necessity if there is a run on the bank. Proof of this would be the fact that OnGame (a reputable, regulated, NON-US network) had only 31% of their player deposits on hand when they were sold to Amaya Gaming, which Jocelyn Wood of PokerFuse.com pointed out:
“The accounts are legal, conform with International Accounting Standards (IAS) and, more to the point, are in compliance with the regulations required by the Gibraltar Regulatory Authority, where Ongame was, and still is, regulated.”
This notion that only “shady” sites like UB, the old Full Tilt Poker, and Lock operate in this fashion is a fallacy, and it has been for years. Hell, the regulatory agencies don’t require this!
With that being said, there does need to be a reasonable percentage kept on hand for the type of emergency laid-out above. Lock either: A) didn’t do this, B) had multiple issues arise at once, or C) continued to spend and act as if the emergency never occurred, so instead of cutting back and saving up for their new water heater they just pretended they didn’t need one and the problem would fix itself down the road because you know, you might hit the lottery or something.
What Lock Should Have Done
I have no idea what the poker world’s reaction to Lock Poker saying (bear in mind the following scenario is completely fictitious):
“We were impacted by the recent banking crisis in Cyprus and are doing everything in our power to recoup these lost funds. We will be cutting our budgets to near zero until we have recouped these player funds, which is our #1 priority. Withdrawals may be slowed for a while, so please bear with us.”
Instead the company continually told us nothing was wrong, nothing happened, and it was business as usual. So, while the truth may have hurt (there would undoubtedly be antagonists handing out torches and pitchforks) it would have also helped drum up some sympathy, not to mention it would be a real, honest, answer for once.
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