Detective work by an Australian online poker player has uncovered a $US10 million cheating scandal at two major poker websites and triggered a $US75 million ($A93 million) legal claim.
Australian Michael Josem analysed detailed hand history data from Absolute Poker and UltimateBet and uncovered that certain player accounts won money at a rate too fast to be legitimate.
His findings led to an internal investigation by the parent company that owns both sites. It found rogue employees had defrauded players over three years using a security hole that allowed the cheats to see other players' secret (or hole) cards.
Now the owners of the sites have filed a $US75 million claim against the makers of the software that powers them, claiming they were unaware of the security holes when they bought the sites in 2006.
Official investigators have named one of the world's most successful poker players, Russ Hamilton, as the main perpetrator of the fraud.
Suspicions of unfair play at Absolute Poker were first raised late last year. Mr Josem plotted the win rate of several thousand players against the suspicious accounts and found the cheats won money at a rate that was 100 times faster than a good player could reasonably win. The cheating accounts played every hand as if they knew every card that the other players had.
The findings led to an investigation by the Kahnawake Gaming Commission, which licenses several hundred online casinos and poker rooms. It found Absolute Poker tried to cover up the cheating by deleting gaming logs and records and fined it $US500,000.
Absolute Poker repaid those who had lost money but refused to release the cheater's identity.
A few months later, Mr. Josem and players from the Two Plus Two online poker forum used the same methods to uncover almost identical cheating occurring at Absolute Poker's sister site, UltimateBet. One player account, NioNio, netted a profit of $300,000 in just 3000 hands and won 13 of 14 recorded sessions.
"The chances of a player winning at those rates is approximately equal to winning a one-in-a-million lottery on six consecutive occasions," Mr Josem said. "In poker, a contest of limited information, if you know what cards your opponent has, you'll never lose - and this is precisely what happened."
The cheats passed their fraudulent winnings between multiple user accounts in an attempt to avoid detection.
The Kahnawake Gaming Commission named World Series of Poker winner Russ Hamilton as the main perpetrator.
The commission ordered UltimateBet to begin refunding all players adversely affected by the cheating scheme. The site has also been fined $US1.5 million.
An Australian company, Gaming Associates, conducted the investigations on UltimateBet and Absolute Poker.
Mr Josem has been employed by the leading online poker site, PokerStars, to work on its security team.
He said other sites were not vulnerable to the same cheats because they used different software and had more credible operators.
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