Opinion: Purple Pain
Ray Davies, head of egaming development at the Department of Economic Development, Isle of Man Government, examines player protection in the light of Purple Lounge's recent collapse.
The recent news that Media Corp-owned, Malta-based gambling group Purple Lounge is to be placed into liquidation, with substantial player losses “expected”, serves as an unwelcome reminder of Black Friday one year on.
On 15 April 2011 thousands of players found their deposited “un-played” funds suddenly subject to asset freezes as part of a US Department of Justice investigation. The more recent situation with Purple Lounge demonstrates that the regulatory issues raised by Black Friday have not gone away, and that until better regulation becomes the norm events such as these will continue to cause concerns and tension within the industry.
We all now know that some players caught up in Black Friday are still waiting for their funds to be returned, and it looks like there is little chance the story with Purple Lounge will turn out any differently. Players who have recently looked at the Purple Lounge website will note that they are being advised to contact the liquidator in an effort to get some if not all of their money returned. However there are no guarantees. While this process is likely to be time consuming the players will inevitably incur more costs as liquidations tend to take time to run their course.
This was not, however, the case for customers of Isle of Man-based PokerStars, whose players are subject to 100% protection of funds, as are the players of every licence holder based on the Island. When the news of the indictments came through and the situation became clear it reacted quickly to the decision by the DoJ and players’ funds were returned within days.
Fair and crime-free gaming, reputable operators and receiving your winnings isn’t much for a player to ask for. Jurisdictions can’t be expected to regulate for every eventuality, but what we may expect is for them to set regulations that identify and offer protection for the crucial aspects of gaming. Until this principle becomes widespread, customers will continue to be unnecessarily impacted when companies such as Purple Lounge go to the wall.