Following a lengthy investigation into the Ultimate Bet scandal, the Kahnawake Gaming Commission (KGC) released their final decision on the incident. As most will recall, in 2007 a poker website highlighted suspicious play in high stakes tournaments at Absolute Poker, and thereafter suspicious play was identified at Ultimate Bet, two related companies. An investigation was started by the KGC in 2008, and it was quickly revealed that the original software designers at Ultimate Bet created "superuser accounts" that could see the hole cards of all players at the table. The purpose for doing so was to test the software, but once the system went live they never deleted the accounts. A few years later the Ultimate Bet owners sold the site to Tokwiro Enterprises, who moved the operation to the reserve of Kahnawake, located just outside of Montreal. The original software creators decided to use the "superuser" accounts to cheat in large scale tournaments, shortly thereafter.
The Kahnawake Gaming Commission fined Tokwiro Enterprises and ordered all affected accounts to be reimbursed. In order to ensure that the jurisdiction and licensees were beyond suspicion, the Commission hired Catania Gaming Consultants, an independent company with vast knowledge of the industry, to conduct an inquiry into Tokwiro and to determine if they in any way benefited from the cheating. The KGC contacted Mohawk Internet Technologies (MIT) which are in charge of the servers on the reserve and informed them that if the findings revealed any wrongdoing on the part of Tokwiro that they would pull the license and that their servers would need to be shut down.
Chuck Barnett, the spokesperson for MIT stated the following to me:
"Tokwiro/UB were fully aware that anything short of full compliance with the KGC and the Catania Inquiry's investigation held the real possibility of immediate revocation of their permit, and could mean the "pulling of the plug" on their operation, and [they] extended full cooperation and transparency over the course of this matter. To their full credit, Tokwiro/UB submitted to full disclosure and were fully cooperative as the KGC examined if there had been any sort of complicity in the fraudulent activity.
Should the KGC have found anything that indicated otherwise, or should they have failed to comply fully, I can assure you that the plugs would have been pulled".
The inquiry essentially identified Russell Hamilton, the 1994 World Series of Poker main event winner and a consultant for Ultimate Bet prior to the sale to Tokwiro, as the main perpetrator in the fraud, and that all fraudulent software was created prior to Tokwiro acquiring the company. According to the decision document, the Commission identified 23 fraudulent accounts with 117 different usernames. The vast majority of the accounts passed money around from player to player and almost always the winnings were processed through Russell Hamilton's player account. 60 minutes featured the scandal on one of its episodes and tracked down Hamilton in Las Vegas. Not surprisingly Hamilton wouldn't talk to 60 minutes, but he is under investigation and being watched closely. The KGC are quick to point out that they have no power to arrest anyone, but that they are cooperating fully with the law enforcement agencies in other jurisdictions (including, presumably, Nevada) to bring the cheaters to justice.
According to the decision, the Commission identified all incidents of cheating and returned funds to all players who were seated at any tournament where one of the accounts was used. The amount worked out to over $20 million. It also appears that those individuals who won money in the tournaments (mostly secondary prizes) were allowed to keep the winnings. More importantly the Commission has instituted strict new guidelines that came out of the Catania Consulting Group's inquiry to minimize the risk of future cheating, and have issued 9 requirements to Tokwiro that requires them to provide detailed reports of all transactions to the Commission for one year and to submit any new plans with regards to new workers or system upgrades for approval.
According to Chuck Barnett there have been no further incidents, and he believes the industry is safer as a result. When the incident occured, Barnett noted that other jurisdictions that licenses online poker sites told him that this type of incident could have happened anywhere and Kahnawake was just unfortunate that it happened on their watch---but that the whole industry could be safer as a result. Barnett stated,
"I've been involved in both the regulatory and commercial ends of the i-gaming spectrum for nearly 10 years now, and can say that the KGC has applied the most demanding and rigorous control requirements on this particular operator which have been independently verified beyond the likes of which I have ever seen.
Tokwiro/UB have undertaken all measures that the Regulators have demanded and as a result now have what may be viewed as one of the tightest ships in the industry.
This past year's exercise has been one that nobody here will soon forget, and I believe this operator and its players are all that much safer for it."
Time will tell if the new guidelines will provide more comfort to poker players. Although in reality, if a group of people are determined to cheat they will often find new and innovative ways to do so. So it's still up to the poker players to be vigilant and report any suspicious play to the poker sites.
If you would like to make or read comments about this article, you may do so by visiting the Mess Hall forum at MajorWager where a thread has been started. Please click HERE