Saturday, May 31, 2008

Confidence In Online Poker Security Waning Rapidly In Wake Of UltimateBet Hole Card Poker Cheats Scam!

Native policing of gambling in doubt after online cheating hole card scam!

MONTREAL - Confidence in the ability of Mohawk regulators to police lucrative online gambling operations on the Kahnawake reserve has been shaken following the second cheating scandal in less than a year., which is owned by a company controlled by former Kahnawake grand chief Joe Norton, acknowledged on Thursday that unnamed insiders had altered its poker software to allow them to see opponents' hidden cards.

"The individuals responsible were found to have worked for the previous ownership of UltimateBet prior to the sale of the business to Tokwiro [Mr. Norton's company] in October 2006," the site said in a statement. "Tokwiro is taking full responsibility for this situation and will immediately begin refunding UltimateBet customers for any losses that were incurred as a result of unfair play."

The company refused to disclose the amount of fraudulent winnings, but poker observers have said it runs into the millions. An analysis of the scandal on the online poker forum found that one of the cheaters won more than $600,000 in the space of four months last year. The software glitch was in place for at least 15 months, UltimateBet said.

In January, Absolute Poker, also owned by Tokwiro Enterprises, was fined $500,000 by the Kahnawake Gaming Commission for a similar cheating scam, which was also blamed on rogue employees. The commission, first created in 1996 when Mr. Norton was grand chief, has three members from the community, which is just south of Montreal.

Bobby Mamudi, an industry analyst and managing editor of the London-based Gaming Intelligence Group, said the new cheating incident is another blow to the reputation of Kahnawake's gambling industry. "They definitely do seem to be losing credibility and not doing too much about it," he said. He called the cheating uncovered in Kahnawake "quite unique" in the global online gambling world. Sites taking bets on sporting events have been shut down for failing to have sufficent funds to pay winners. "There's never been something like this to do with poker and this kind of overt cheating," he said.

The federal government considers the 400 or so poker and sports-betting sites operating from Kahnawake to be illegal, but, fearing a confrontation, both the federal and provincial governments have been reluctant to intervene. Last March, however, an aide to Justice Minister Rob Nicholson said the government was studying ways of shutting down the gambling, possibly by targeting financial transactions with illegal Internet operators.

Murray Marshall, legal counsel to the gaming commission, said that Kahnawake's regulation is among "the tightest in the world" and said similar frauds have occurred in casino gambling and banking. "We would obviously prefer to prevent all possibilities of this kind of thing happening, but no system is infallible," he said.

UltimateBet, one of the most popular online poker sites, identified six player accounts that took part in fraudulent activity. They used 18 different online aliases, including NioNio, flatbroke33, ilike2win, UtakeIt2, FlipFlop2, WhackMe44 and RockStarLA. It said the "security hole" that allowed the fraud has been plugged and all of the individuals associated with the cheating have been permanently banned. It also promised to increase security.

Steven Ware, author of an upcoming book on poker strategy, has followed the UltimateBet controversy closely since players first voiced their suspicions online in January. In an analysis on twoplustwo. com of NioNio's winning hands, he wrote that the odds of someone getting that lucky were "about the same as winning the powerball [lottery] jackpot three days in a row."

In an interview yesterday, Mr. Ware said stricter oversight is needed of the Kahnawake gambling sites.

"Online poker is a billion-dollar-a-year industry, and it's unfathomable that companies in this industry would operate with a total lack of transparency, beyond the reach of the law," he said. "Kahnawake and the online gambling sites that it runs have shown time and time again that they are not willing to keep their games fair or protect the players."

UltimateBet officials declined to be interviewed yesterday. In an e-mailed statement, the company said the "perpetrators" of the fraud left the company "well before the fraudulent activity was uncovered." Asked whether the matter has been referred to the police, the company said only that it is in the hands of the gaming commission.

UltimateBet Online Poker Cheat Scam Comes Clean With Tokwiro Enterprises Admission!

Here we go again! I said it two and half years ago, that hole cards were being exposed in online poker games, and nearly everyone in the poker community called me crazy. But now Tokwiro Enterprises, owner of both Absolute Poker and UltimateBet, has had to come out of the closet and admit that its second prized online poker site
was devastatingly compromised, after its first, Absolute Poker, suffered the same blow from the same peeking-at-hole-cards scam.

The headlines blared: Close Former Employees Had Access to Opponents' Holecards for 21 Months

Tokwiro Enterprises, the company that owns both Absolute Poker and UltimateBet, today released a statement confirming that cheating had gone on at UltimateBet by people who, according to the release, “worked for the previous ownership of UltimateBet prior to the sale of the business to Tokwiro in October 2006.”

The player or players behind the 18 screen names that were identified as being corrupted have not been named. Tokwiro will refund players their losses once the investigation is complete. The usernames that were used to cheat are: NioNio, Sleepless, NoPaddles, nvtease, flatbroke33, ilike2win, UtakeIt2, FlipFlop2, erick456, WhackMe44, RockStarLA, stoned2nite, monizzle, FireNTexas, HeadKase01, LetsPatttty, NYMobser, and WhoWhereWhen.

The cheating was able to take place because the perpetrators had access to what Tokwiro is calling an “unauthorized software code” that allowed the cheaters to see their opponents’ holecards. The cheating took place from March 7, 2006 to Dec. 3, 2007, and it’s not known how much money the cheater(s) illicitly won.

As soon as the cheating was suspected, Tokwiro said it contacted the Kahnawake Gaming Commission (KGC), the most used online poker regulatory commission, to start the investigation. Tokwiro is mandated to contact KGC if any suspicious activety might be taking place.

This is the second cheating incident to hit the company since it purchased Absolute
Poker and UltimateBet. The first occurred when it was discovered that several players at Absolute Poker also had access to software that allowed them to see opponents’ hole cards.

The entire press release, which provided a timeline of the incident, follows:

MONTREAL, CANADA (MAY 29, 2008) --- Tokwiro Enterprises ENRG ("Tokwiro"), proprietors of ("UltimateBet"), one of the world's largest online card rooms, today announced the results of its lengthy investigation into allegations of unfair play, which was triggered by concerns about an account named 'NioNio'. Tokwiro has worked diligently in cooperation with its regulatory body, the Kahnawake Gaming Commission ("KGC"), and with independent third-party experts to conduct a thorough investigation that included a comprehensive review of hand histories and game data, thorough analyses of software and network security, and audits of its security practices and procedures.

The investigation has concluded that certain player accounts did in fact have an unfair advantage, and that these accounts targeted the highest limit games on the site. The individuals responsible were found to have worked for the previous ownership of UltimateBet prior to the sale of the business to Tokwiro in October 2006. Tokwiro is taking full responsibility for this situation and will immediately begin refunding UltimateBet customers for any losses that were incurred as a result of unfair play.

The fraudulent activity was enabled by unauthorized software code that allowed the
perpetrators to obtain hole card information during live play. The existence of this
vulnerability was unknown to Tokwiro until February 2008 and existed prior to
UltimateBet's acquisition by Tokwiro in October 2006. Our investigation has confirmed that the code was part of a legacy auditing system that was manipulated by the perpetrators. Gaming Associates, independent auditors hired by the KGC, have confirmed that the software code that provided the unfair advantage has been permanently removed.

Throughout the investigation of this incident, Tokwiro's consistent priorities have been:

To permanently remove the ability to engage in unfair play.
To complete its investigation and come to a full understanding of what occurred.
To refund the affected customers.
To implement measures that prevents future incidents.

The Company said, "We would like to thank our customers for their patience, loyalty and support, as well as for their understanding that we are doing everything we can to correct this situation. The staff and management of UltimateBet are fully committed to providing a safe and secure environment for our players, and we want to assure customers of our unwavering resolve to monitor site security with every resource at our disposal."

Investigation Timeline

These are the key events in the course of the incident.

January 2008: UltimateBet is alerted to suspicions of unfair play on the part of the
account "NioNio". Within 24 hours, UltimateBet contacts the KGC to provide formal notice that UltimateBet has initiated an investigation of the incident.

UltimateBet subsequently forwarded a copy of all related data to the KGC.
January 2008: The "NioNio" account and related accounts are suspended pending further investigation.

February 2008: Preliminary findings indicate abnormally high winning statistics for the suspect accounts. After discussions with the KGC, UltimateBet engages third-party gaming experts to assist with the analysis.

February 2008: Investigators confirm that the suspect accounts are associated with
individuals who had worked for UltimateBet under the previous ownership.
February 2008: UltimateBet discovers the unauthorized code that allowed the perpetrators to obtain hole card information during live play. The code was part of a legacy auditing system that was manipulated by the perpetrators of the fraud.

February 2008: UltimateBet immediately removes the unauthorized code and works with the KGC and with third-party auditors to verify that the security hole has been eliminated.

March 2008: Six player accounts are confirmed to have participated in this scheme. No accounts were deleted at any point, although some account names were changed multiple times. The following account names are known to have been used in the fraudulent activity: NioNio, Sleepless, NoPaddles, nvtease, flatbroke33, ilike2win, UtakeIt2, FlipFlop2, erick456, WhackMe44, RockStarLA, stoned2nite, monizzle, FireNTexas, HeadKase01, LetsPatttty, NYMobser, and WhoWhereWhen.

May 2008: The investigation confirms that the fraudulent activity took place from March 7, 2006 to December 3, 2007.

May 2008: Gaming Associates certifies that the software code that enabled unfair play was removed from UltimateBet servers in February of 2008.

May 2008: Customers affected by this incident are identified, and plans for corrective action are reviewed with the KGC.

Corrective Actions Taken:

The following actions have been taken or are currently underway as a direct result of this investigation:

The security hole identified in UltimateBet's investigation has been permanently

UltimateBet is establishing a state-of-the-art software Security Center that
consolidates and greatly enhances existing security capabilities. The first release of the new Security Center focuses solely on the immediate detection of abnormal winnings. Gaming mathematicians, poker professionals, and security software developers have all contributed to the specifications for the new Security Center.

UltimateBet customers are no longer permitted to change account names unless they have suffered abuse in chat rooms. Requests for changes must be supported by proof of abuse and must be approved by the Chief Compliance Officer. In addition to its existing security department, UltimateBet has established a new specialized Poker Security team of professionals dedicated to fraud prevention.

The refund process will begin immediately. The accounts associated with fraudulent
activity did not use an unfair advantage in all play sessions. Regardless, UltimateBet is refunding all losses to these accounts.

Accounts related to the fraudulent activity have been disabled, and the individuals
associated with those accounts permanently banned from the site. UltimateBet has worked closely and transparently with its governing body, the KGC and its designated expert auditors, to determine exactly what happened, how it happened, and who was involved, and has taken action to prevent any possibility of this situation

Tokwiro is pursuing its legal options in regard to this incident.


June Scam Of The Month Is Posted!

The scam of the month for June is Card Swapping at brick and mortar poker tables. This is a devious scam pulled off by two cheating partners at the poker table who leave no cards unswapped! To read it, go to my Scam of the Month page.

Thursday, May 29, 2008

Bwin Declares War On Cheats Using Poker Bots!

ICU INTELLIGENCE TO IMPLEMENT BotGuard, a pokerbot detection system, at bwin!

The war against poker bots is escalating! In a deal with ICU Intelligence, a data mining and predictive database analysis company, the huge online casino, poker and sports betting company known as bwin has taken the war against poker bots to the very Internet they breed on. With the development of BotGuard, ICU Intelligence has armed bwin with the first real orchestrated online defense against bots. If you are not familiar with the ongoing online war between poker sites and poker cheats using bots, the text below lays out the battlefield.

At a time when the number of internet poker players continues to rise, the number of people trying to take advantage of the game also increases. Auxiliary cheating software that recommends poker actions is becoming an increasing problem. In some cases the software plays without human interaction, a so called poker bot, which gives the player using such software an advantage towards ordinary players. bwin has always been in the forefront of this battle and takes every precaution to stop the fraudsters who are using poker bots. However, as the technology of the poker bots develops and becomes more sophisticated, new methods are needed to combat the problem. ICU’s BotGuard is designed specifically to find and detect the player patterns that single out poker bots from the human players.

“The increasing complexity and the amount of data that needs to be processed in order to detect poker bots is tremendous” says Kevin O’Neal, Press Officer at bwin. “BotGuard has the ability to detect complex patterns with tiny shades of differences in huge databases, which allows it to find the players that are using illegal software. This is what made us choose ICU’s solution as our next step in the fight against poker bots.”

ICU’s unique cutting edge technology, based on Artificial Intelligence, is what powers BotGuard. This gives it the ability to analyse and process the huge amounts of data required to search for bots among the masses of ordinary players. The fingerprint on every player is unique and every bot has its unique playing patterns. The way a person plays over time changes. A bot on the other hand plays in a similar way with few small variations. ICU’s BotGuard finds and flags suspicious players, allowing bwin’s fraud specialists to undertake a more thorough investigation before the appropriate countermeasure is executed.

“ICU is very pleased and excited to work closely with bwin.” says Andreas Holmström, CEO ICU intelligence. “bwin is a pioneer in the online poker development and we are proud that they are choosing ICU as their partner when it comes to surveillance against cheaters on their poker network.”

Tuesday, May 27, 2008

Rash of Sportsbooks Cheats and Scams! How to Avoid Them!

I have been getting tons of e-mails asking me about the safety of doing business with various online sportsbooks. Although sportsbook scams and cheat operations do not get the online press that poker scams do, believe me, they are prevalent out there in the cyberworld. Not only are there the typical scenarios where online sportsbooks go belly-up and out of business, leaving account-holders holding nothing but air, several sportsbooks operations are set up just to do that: abscond with account-holders´ funds once the accounts are opened, without a first bet even being made.

In additon to these online sportsbook scams, there have been shady individuals involved with online sportsbooks, especially those based in Costa Rica, who have been accused of more widespread criminal activities on several continents.

According to a report filed over a year ago by the U.S. Department of Justice (DOJ), Jaime Ligator, owner of the Horseshoe casino in San José, detained last May 18, contributed financially to the opening a call centre that was presumable used to defraud dozens of Americans with false prizes.

Ligator, when he was arrested, was the president of World Wide Land Investments which had offices on the third floor of Mall San Pedro. This is a firm that specializes in selling lots to North Americans, according to AM Costa Rica.

A former sportsbook owner, Max Allan Stone, was also named in the case and alleged to have been part of the scam that preyed on mostly elderly citizens living in the United States.

The scam artists called people in the United States informing them they had won a lottery. The victim was then supposed to send a “deposit” anywhere from $300 to $4,000 via Western Union, a police spokesman told AM Costa Rica.

Another of those named in the complaint, Severin Marcel Stone, 28, and presumably a relative of Max Allan, is being extradited back to the United States.

Severin Marcel Stone was detained in January in San Rafael de Escazú where he operated a food outlet in a shopping mall.


The BetOnSports saga continued last week with notification that they "do not anticipate that any distribution to creditors will be any more than a few cents on the dollar". Those players who were left with substantial account balances at the time of BOS's demise are starting to look like they will come away completely empty-handed. Unfortunately this is not the first offshore sportsbook failure, nor will it be the last.


I would give you these suggestions to avoid losing your funds on account with sportsbooks that either go belly-up or are just plain scam operations:

Avoid credit wagering. While gambling on credit certainly has its place, and its benefits, it often leads into very murky waters. If offered a credit account from someone unknown to you, run, don't walk. This includes "forum personas" - plenty of scam artists have utilized credit offers through internet forums to rip-off unwary players. With no guarantee that you will be paid, you are setting yourself up for disaster. Be especially cautious of operations employing stateside credit agents - even if their intentions are honorable, the high risk of prosecution make this route generally unappealing.

Do business only with the cream of the crop. Appearances can be deceiving, and a well-designed website can easily disguise the fact that some sportsbooks are literally operated out of shacks in 3rd world countries. The biggest factor in sportsbook failure is lack of adequate cash flow, and most start-up operations are vastly undercapitalized. Large sportsbooks in operation for 5 or more years likely have had time to amass a cash reserve, and have a good enough handle on operating costs to keep themselves afloat. The same can't be said for smaller or newer sportsbooks, who represent a much riskier place to park your bankroll.

Stick to books advertising on well-known internet websites and gambling portals. While plenty of pump-and-dump schemes have been propagated through online gambling forums, most website owners will at least go to bat for those who signed up through their referral links if one of their advertisers goes belly-up. This, of course, varies by website owner. Most provide at least some degree of screening of their advertisers, and many have plenty of "inside connections" that can sometimes be used to expedite payments or resolve disputes. While this provides no guarantees of assistance, it at least leaves extra options open in extricating yourself from a sticky situation.

"There's no such thing as a free lunch." Be wary of incentives that seem too good to be true. Sportsbooks on the decline will often attempt to increase operating capital by enticing customers with generous deposit bonuses. In many cases, this is simply a case of robbing Peter to pay Paul as your post-up money goes right back out the door to process backlogged withdrawal requests. Don't get suckered into the tail end of a failing Ponzi scheme. Well-run (and well-capitalized) sportsbooks have no need for eye-popping incentives, which are often signs of desperation.

Diversify. The BetonSports saga has illustrated that no book is absolutely safe, regardless of backing, reputation, or business savvy. No one knows for sure if a book may fold, go bankrupt, or just pick up and walk away with customers' deposits. Spreading yourself out between 5 to 10 independently-run sportsbooks is a nice insurance policy if something unforeseen should happen to one of your standard "outs". Even a complete failure of one of your sportsbooks will only chop off a limited 10-20% of your total bankroll - not an attractive ending, but better than having all your eggs in one basket.

Keep balances low, and make frequent "profit-taking" withdrawals. Keep the minimal amount necessary for your daily betting in each account. The cash you keep offshore should be funds you are willing to lose in a worst-case scenario. Run up the score on one of your books? Take that opportunity to request a payout and preserve your capital - cash in a shoebox under your bed can't fall victim to offshore shenanigans. The goal should be to keep as little of your cash at risk as possible while staying funded well enough to avoid missing any profitable opportunities.

Sunday, May 25, 2008

Casino Money Laundering Rampant in Canadian Casinos!

According to the Peace Arch News, criminals and cheats are using Canada´s casinos to wash their ill-gotten gains. Money laundering is nothing new to casinos, especially in Las Vegas and Macau, but this is the first time I´m hearing of major money-laundering operations going on in Canada.

VICTORIA – The provincial and federal governments are checking into reports that B.C. casinos are being used to launder large amounts of money by people posing as high-rolling gamblers.

CBC News reported last week that its reporters were able to go into casinos, feed thousands of dollars in cash into slot machines, then exchange the credits for a casino cheque after little or no actual gambling.

Provincial and federal laws require that suspicious transactions be reported to provincial gaming enforcement officials and the federal agency responsible for policing financial transactions. Documents released under freedom of information legislation showed that suspicious incidents were reported by casino staff, but many of those did not end up being reported to Ottawa as the law requires.

In question period at the B.C. legislature Thursday, NDP critics grilled Public Safety Minister John van Dongen on the issue. Delta North MLA Guy Gentner asked why Ontario casinos reported suspicious transactions totalling more than $15 million in 2006, while B.C. reports the same year totalled only $60,000.

In the legislature and speaking to reporters outside, van Dongen would only say he has asked for a meeting with the B.C. Lottery Corp. board, and spoken to federal Public Safety Minister Stockwell Day about verifying the lottery corporation’s responsibilities under federal law.

He promised to take appropriate action and report to the legislature on his findings.

“The fact of the matter is there are very extensive reporting requirements on casino facilities,” van Dongen said.

“These reports go to the (B.C.) Gaming Policy Enforcement Branch, they review the reports, they work with enforcement agencies.”

Branch records show that in B.C. there were 48 money laundering investigations in 2004-05, 43 in 2005-06 and 51 in 2006-07. Only one case led to a criminal charge during that time.

The Gaming Policy Enforcement Branch deals with many more reports of crime related to casinos, including more than 1,000 cases a year of suspected counterfeit.

In 2006-07 the branch dealt with 570 complaints of theft, 193 of fraud, 118 of loan sharking, 344 of assault or threats and 43 complaints of cheating at gambling games.

NDP attorney-general critic Leonard Krog said the money laundering problem is similar to last year’s report by B.C. Ombudsman Kim Carter about inadequate controls on potential lottery ticket fraud by retailers.

Mansion Poker Makes Move To Combat Cheating

Mansion Signs With Ethoca

Leading fraud management firm Ethoca Limited has announced that online casino has joined its global community of companies intent on reducing scams and increasing revenues. This seems like a good move to me in light of the continuing the seemingly nonstop barrage of online poker scams.

'The online gaming industry is strongly on board with the idea of collaborating to stop fraud with four of the top five and many more of the top 50 already committed to working together through Ethoca's community,” said Andre Edelbrock, President and Chief Executive Officer for Ethoca.

“As the rapidly emerging de facto standard for collaboration in this industry, we are very pleased to add as the newest member. Most fraud management is about reducing risk but Ethoca is unique because we're also about increasing revenues.'

Dublin-based Ethoca stated that its partner firms now include financial providers, Internet-based retailers and online gaming operators and that it increases profitability by distinguishing between reliable and unreliable transactions, which reduces losses and non-payment. It said that recent research discovered that better fraud management could result in e-businesses recovering more than $30 billion in previously foregone annual revenues.

"Offering the best value in online gaming means we must continue to stay at the cutting edge of fraud prevention to offer the best possible protection for our members,” said Guy Gussarsky, Chief Executive Officer for Gibraltar-based

“Ensuring our players have an enjoyable, safe and worry-free gaming experience is our priority. Ethoca's innovative platform for anti-fraud collaboration is unique and allows to benefit from the payment experiences of other companies. It is a real breakthrough in fraud management."