Thursday, June 2, 2011 | 9:42 a.m.
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As expected, poker superstar Phil Ivey filed suit Wednesday against Tiltware LLC – a suit suggesting he’s trying to distance himself from the company’s alleged ties to illegal online gambling.
Ivey disclosed Wednesday he’s sitting out the World Series of Poker in Las Vegas this summer until Tiltware’s Full Tilt Poker business reimburses players whose funds were frozen in April by the U.S. Justice Department’s crackdown against illegal online poker operations.
In their lawsuit filed in Clark County District Court in Las Vegas, attorneys for Ivey said that after entering an endorsement deal with Tiltware in February 2004 for legal online poker, no one from Tiltware advised Ivey that Full Tilt Poker had used fraudulent methods to avoid banking restrictions in transferring gambling money as alleged by the Justice Department.
They also said that according to the Justice Department, online poker companies had been provided "repeated warnings and clear notice that their conduct was illegal in the United States," but that Ivey was not advised of these warnings.
As a result of the indictment of officials associated with Full Tilt, and Full Tilt’s alleged failure to refund all of the $150 million believed to be owed to players, Ivey should be relieved of his non-compete covenants in his endorsement deal and his "reputation and professional reputation have been irreparably damaged," the suit says.
Ivey charges in the suit that poker players have been making comments that professionals associated with Full Tilt should not appear in the World Series of Poker and that Ivey should pay the owed players’ funds personally.
"Plaintiff has suffered public ridicule, humiliation and loss of personal and professional reputation," the lawsuit charges.
It seeks an injunction barring Tiltware from enforcing the noncompete terms in his endorsement deal, as Ivey has several other potential endorsement and business opportunities in the poker world and "plaintiff cannot be deprived of his livelihood."
The suit alleges breach of contract and damages of more than $150 million in alleging that Tiltware promised that the software it provided to Full Tilt was "for the conduct of legal online poker."
That warranty was false, the suit alleges, since the Justice Department alleges Full Tilt "has engaged in illegal conduct related to its banking practice."
Ivey is represented in the suit by veteran Las Vegas attorneys David Chesnoff and Richard Schonfeld.
Several poker websites today reported that Tiltware responded to the suit with a statement saying Ivey owes the Full Tilt site money and is trying to thwart efforts to have the players’ money returned.
“In an effort to further enrich himself at the expense of others, Mr. Ivey appears to have timed his lawsuit to thwart pending deals with several parties that would put money back in players’ pockets. In fact, Mr. Ivey has been invited — and has declined — to take actions that could assist the company in these efforts, including paying back a large sum of money he owes the site. Tiltware doubts Mr. Ivey’s frivolous and self-serving lawsuit will ever get to court. But if it does, the company looks forward to presenting facts demonstrating that Mr. Ivey is putting his own narrow financial interests ahead of the players he professes to help,” says the statement.