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TOKWIRO BREAKS SILENCE ON ULTIMATE BET
Cheating confirmed due to software vulnerability; disadvantaged players to be refunded

After months of silence and amid a growing uproar in the online poker player community over alleged cheating by player NioNio (see earlier InfoPowa reports), the owners of Ultimate Bet.com, Tokwiro Enterprises ENRG, issued a statement this week.

The statement presumably marks the end of what Tokwiro describes as a “lengthy investigation” in which it has been joined by independent auditors Gaming Associates and the licensing and regulatory jurisdiction Kahnawake Gaming Commission (“KGC”), in conducting 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 concluded that certain player accounts did in fact have an unfair advantage, and that these accounts targeted the highest limit games on the site, Tokwiro reports.

The statement does not identify the individuals responsible, but claims that these persons 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 and will immediately begin refunding UltimateBet customers for any losses that were incurred as a result of unfair play.

According to the Tokwiro-UltimateBet statement, the fraudulent activity was enabled by “unauthorised software code” that allowed the unidentified perpetrators to obtain hole card information during live play. The statement claims that 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,” the statement continues. “Gaming Associates, independent auditors hired by the KGC, have confirmed that the software code that provided the unfair advantage has been permanently removed.”

This comment raises some interesting questions of coincidence, bearing in mind that UltimateBet’s sister site, Absolute Poker in the same Tokwiro ownership group, was involved in similar cheating allegations last year that subsequently led to it being fined $500 000 by the KGC. In that case, too the initial discovery of wrongdoing can be largely attributed to expert poker detectives on the community website 2+2, and the perpetrators were neither named nor (apparently) prosecuted.

It also leaves unanswered the question of how NioNio was able to consistently beat the highest games on the UB site with win rates an order of magnitude greater than the best players on the planet, apparently without being flagged by security or the accounts section that handled his or her substantial winnings.

But back to the Tokwiro statement, which claims that throughout the investigation it’s 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; and

* To implement measures that prevent future incidents.

“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 statement asserts. “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.”

The statement goes on to provide the following chronological order of events pertaining to the incident:

January 2008: UltimateBet is alerted to suspicions of unfair play on the part of the account “NioNio” (prersumably by the 2+2 detectives who had already uncovered wrongdoing at Absolute Poker.) 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. 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 (unidentified) individuals who had worked for UltimateBet under the previous ownership.

February 2008: UltimateBet discovers the unauthorised 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 (unidentified) perpetrators of the fraud. UltimateBet immediately removes the unauthorised 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 eliminated.

* 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 specialised 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 recurring.

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

Hopefully the UltimateBet owners have learned from the Absolute Poker experience and will at some stage expose and prosecute the still unidentified perpetrators of this shocking cheating scandal, the worst yet in known online poker history and believed to involve millions of dollars.

Whether UltimateBet will suffer the imposition by the KGC of a hefty fine as was the case with its stablemate remains to be seen.

For the full report go to: http://www.ultimatebet.com/poker-news/2008/may/nionio-findings

ECOGRA FAIR GAMING ADVOCATE RELEASES Q1 DISPUTE REPORT
Disappointing number of false bonus complaints

Player disputes filed online with eCOGRA in respect of “Fair and Safe” accredited online casinos and poker rooms were low for the first quarter of 2008, with an average of only 0.26 disputes per seal casino being recorded, according to the player protection and standards organisation’s Fair Gaming Advocate, Tex Rees.

A total of 171 dispute mediation requests were received during the quarter, well down on the average quarterly figure for 2007 of 195. Of the 2008 disputes lodged in the first quarter, 27 were in respect of websites that are not accredited by eCOGRA and were therefore declined. A further 17 ‘disputes’ were classed as invalid due to insufficient contact information, abuse, falsehood or the lack of a specific complaint.

“Unfortunately, the quarter has been marred by a relatively large number of false bonus abuse complaints lodged by fraudulent players, which when investigated in depth were found to be invalid due to multiple accounts, bonus over-claiming and in a minority of cases out-and-out fraud,” Rees revealed, adding that 34, or 27 percent of disputes she handled were related to bonus issues.

Of the 127 valid disputes, 44 percent were resolved in favour of the player, Rees reported, saying she handled an average of 10.6 valid disputes per week over the quarter.

“The main cause for complaint was Cash In related matters, which generated 61 disputes, or 48 percent of the total disputes received,” she commented. “Bonus issues constituted 27 percent of the disputes, followed by locked account issues at 17 percent and miscellaneous complaints at 8 percent.”

EC ASSURES MALTA ON OPEN BORDERS FOR ONLINE GAMBLING
McCreevy meets with gambling authority officials

Tne importance of Malta as an European online gambling jurisdiction was underlined this week when the head of the European Commission’s Internal Market and Services division, Charlie McCreevy visited the Mediterranean island’s Malta Gaming Authority and praised its officials for their professionalism.

More imporantly, perhaps, the Commissioner assured the Authority that he is determined to enforce EU law to ensure open borders for the online gaming industry.

McCreevy and his division has been a tireless advocate for the end to state monopolies and a fair and non-discriminatory gambling industry that allows the free movement of services between EU member nations. He has issued warnings to 10 member states to either change their monopolistic gambling policies or face prosecution before the European Court of Justice, and his efforts appear at last to be bearing fruit with significantly positive moves from some governments.

The European Court of Justice has classified online gaming as a service which falls within the principles of freedom of movement of services, something which McCreevy has repeatedly emphasised.

Malta is home to a flourishing online gambling industry, currently employing around 1 500 people.

McCreevy briefed officials on progress being made by the EC, saying that some countries were making changes by lifting restrictions, and he was determined that others should follow suit.

The island government’s Finance Minister, Tonio Fenech, agreed with the Commissioner’s position and said that the principle of the open market applied to online gaming.

“Some member states are raising moral issues, but this is clearly a protectionist approach to allow monopolies and limit competition,” Fenech said, adding that Malta is insisting that the Commission proceed with infringement proceedings against the countries involved.

2 MORE REPRESENTATIVES SIGN UP FOR ANTI-UIGEA BILL
Nineteen politicians now support the Frank-Paul bid to halt UIGEA in its tracks.

HR 5767, the Congressional bill introduced April 2 designed to halt federal officials from further implementation of the controversial regulations underpinning the Unlawful Internet Gambling Enforcement Act, has another two supporters.

The Bill, proposed by House Financial Services Committee chairman Barney Franks (Massachusetts) and Representative Ron Paul (Texas) quickly signed up 10 supporters, who were later joined by a further 5 Representatives.

This week Congressmen Steven R. Rothman [NJ-9] and Steve Cohen [TN-9] added their names to the HR 5767 sponsorship list, bringing total support for the measure to 19.

The full list of sponsors is currently:

Gary Ackerman (D-N.Y.)
Shelley Berkley (D-Nev.)
William Lacy Clay (D-Mo.)
Bob Filner (D-Calif.)
Luis Gutierrez (D-Ill.)
Michael Honda (D-Calif.)
Peter King (R-N.Y.)
James McGovern (D-Mass.)
James Moran (D-Va.)
Robert Wexler (D-Fla.)
Russ Carnahan (Missouri)
Michael Capuano (Massachusetts)
Ed Perlmutter (Colorado)
Charles Gonzalez (Texas)
Joe Baca (California)
Steven R. Rothman (Newe Jersey)
Steve Cohen (Tennessee)

Launching the bill last month, Frank said: “These regulations are impossible to implement without placing a significant burden on the payments system and financial institutions.”

The Paul/Frank bill seeks to prohibit the Department of Treasury and the Federal Reserve from proposing regulations to enforce the UIGEA ban on Internet gambling financial transactions enacted in late 2006. The controversial legislation has been the subject of wide media comment, Congressional hearings and over 200 critical submissions, mainly from the financial community that will be required to enforce the law.

Complaints are that the law is ambiguous, impractical and lacks precision, and that it generates too great a workload for the US financial services industry.

Federal drafting officials have admitted that the regulations, now long overdue more than 18 months after the root legislation was passed, is giving them problems.

PROLIFERATION OF SPORTSBETTING SITES WORRIES SPORTS AUTHORITIES
Claims of 15 000 sportsbetting websites on the Internet

What appear to be exaggerated claims of a proliferation of online sportsbetting websites is worrying international sports authorities according to a report from Agence France Presse this week. The authorities claim that there are now an estimated 15 000 such sites including some 13 000 illegal venues, moving revenues of an estimated Euro 15 billion a year.

Reporting that these numbers have now triggered an official reaction, AFP quotes International Olympic Committee (IOC) president Jacques Rogge, who last year compared the gambling issue to the gangrene caused by doping in sports and suggested the formation of a world surveillance agency based on the model of the World Anti-Doping Agency (WADA).

The AFP report claims that the “explosion of Internet sportsbetting” is controlled mostly from Asia, although it does not substantiate this information. Commenting that gambler losses either fairly or as a consequence of fraud, are threatening the credibility of sport, AFP quotes Declan Hill, a journalist and British expert on the problem, who alleges that the amount of corruption in global sports has increased almost 100-fold in the past five years thanks to Internet-based gambling.

“Ten years ago, national lotteries controlled 100 percent of the sports (betting) market,” Hill said. “Today, the French National Lottery, for example, controls only 25 percent of the French market, but their number of clients has multiplied by four times,” he said.

The problem has continued almost unabated since 2006, when a study conducted by the independent Information Systems Security Consulting firm warned of the criminalisation of Internet sports betting, the AFP report continues.

“The sector of online gaming is today mostly controlled by criminal groups,” the security firm said in the study commissioned by a group of European state lotteries. Players had been approached and threatened, referees influenced, and matches bought, it found.

AFP also points to money laundering as a threat, claiming that the amount of money traded on a single website can surpass Euros 100 000 for a match in the third division football in Romania, or even the first division of the Czech women’s league.

“Experts estimate that 85 percent of these websites have been created for the sole purpose of “washing away” dirty money”, it claims, without identifying its sources.

The AFP piece identifies tennis, football and cricket federations as “…the pioneers in the fight against harmful effects of illegal gambling.” However, it points out that these same federations are trying to secure a financial stake for themselves.

Each year, French gamblers place sports bets worth more than Euro 510 million on the Internet. Of this, only around Euro 12 million is believed to be legal, through the French National Lottery, the only authorised online sports betting operator in the country.

Following the example of the French Tennis Federation, a number of sports bodies are now trying to claim part of the lucrative Internet betting industry on the model of television broadcasting agreements. The federation has accused various sites of offering illegal betting in violation of the exclusive rights it has to commercially exploit its events. [Ed. note – the most recent cases in Ligne, Belgium failed]

WAGERWORKS AND LADBROKES GET CLOSE
Gambling website to feature premium WW games

The major UK land and online gambling group Ladbrokes and gambling software provider WagerWorks have teamed up to integrate WW premium branded games into the Ladbrokes.com website, using the Orbis Fixed Odds Games Framework (FOGF) platform.

The goal for Ladbrokes is to maximise revenues by continuously add fresh content to keep game players engaged, and the first WagerWorks games to be offered on the site include the popular release “Monopoly on a Roll”, together with “Multiplier!” – a fixed odds game where players choose the risk and reward.

“WagerWorks is delighted to be associated with such a leading brand as Ladbrokes, a name that has become synonymous with sport, betting and now iGaming,” said Tom Kenny, Commercial Director of WagerWorks. “This exciting collaboration is another testimony to the reputation WagerWorks has gained in the marketplace as the world’s leading branded content provider”.

Andy Harris, games managing director at Ladbrokes, said: “The ability to constantly review our product offering and ensure our players have the latest and best games is paramount. WagerWorks games through the Orbis FOGF platform offer us this flexibility by making excellent fixed odds titles available to our players.”

U.S. – ANTIGUA MEETINGS GO WELL
Resolution of WTO disputes could be only days away, says Minister

The meetings between the U.S. Trade Representative to the World Trade Organisation and a delegation from the government of Antigua and Barbuda (see previous InfoPowa report) appear to have gone well last Friday, and could herald an end to the long-running dispute over online gambling between the two countries.

The Antigua Sun reported this week that Finance Minister Dr. Errol Cort, who headed the islander mission, as optimistic that a settlement could be reached after the mettings with US officials.

“Clearly we were able to further discuss components for possible settlements and while we have not reached a point where I could say there is a settlement, I would say I feel that we are closer to a settlement than we were when we met first on 18 January.,” Dr. Cort told the Antigua Sun.

Whilst confidentiality constraints precluded the minister disclosing any detail, he said he was hopeful that a settlement could be reached before the June 6 deadline, when suspended legal actions between the two countries could recommence. He also hinted that is a real settlement was in prospect he would not be averse to extending the time limit.

Cort said he had the opportunity to meet with high-ranking officials in America’s Justice, Treasury, Commerce, Homeland Security and State Departments as well as the USTR.

PADDY POWER TO HOST EUROPEAN BINGO CHAMPIONSHIP
Car and travel prizes in new bingo extravaganza

The online bingo division of Irish betting group Paddy Power is ramping up the competitive stakes in the burgeoning bingo sector by hosting a new European Bingo Championship that is scheduled to take place next (June) month.

The firm is promising players a new Chevrolet car, travel and laptop prizes and bonus incentives as part of the action. Throughout June several bingo games will be hosted exclusively at PaddyPower, with the championships comprised of ten qualifying rounds and one grand final on June 29. Qualifiers are running online Monday, Wednesday and Friday each week.

A Paddy Power spokesman commented that while the Euro2008 football spectacular is on, instead of screaming for someone else to win some silverware, players should get on their computers and score some personal winnings. “Move over football – The Bingo Championship has arrived and it means business!,” he said.

POKERSTARS FOR CHINA EARTHQUAKE RELIEF
Online poker site facilitating aid contributions

The online poker website Pokerstars.com has put together a multi-layered scheme through which its hundreds of thousands of members can make aid contributions to the victimes of the Chinese earthquake catastrophy.

The Pokerstarsblog comments that its players have a long history of supporting people in need. In the past several years, PokerStars and its players have donated to victims of the Indonesian tsunami and Hurricane Katrina. They have also given to the Lifeball AIDS research effort and the fight to stop the genocide in Darfur.

“Now, as the people of China struggle to cope with the deadly earthquake in their country, PokerStars is giving its players a way to help.”

Members are poffered the option of donating directly to the Red Cross from PokerStars accounts. Members can transfer any amount to the “Quake Relief” PokerStars account or they can give between $1 and $100 by signing up for the China Quake Relief Fund (no game will be played) under the Tourney/Special tab on the website.

As it has in the past, PokerStars has pledged to match every donation to the dollar. Every dollar members give will be turned into $2 by PokerStars before the money is sent to the Red Cross.

With the death toll nearing 70 000 and many people still unaccounted for, and millions rendered homeless and in need of medical and other assistance, the disaster is one of epic proportions and Pokerstars is to be commended for stepping up so generously to help. It is understood that thousands of Stars players have already donated, and that the generous response from poker players around the world continues.

ANTI-BOT SOFTWARE INTRODUCED BY BWIN
ICU’s BotGuard will stop cheater bots in their tracks

The Vienna-listed online gambling giant Bwin has taken another significant step in player protection by ordering anti-cheat software from the Swedish data mining and predictive database analysis firm ICU Intelligence. Bwin will introduce the firm’s Botguard product to detect players using cheating software on Internet poker sites.

BotGuard is powered by advanced technology capable of handling a wide range of sophisticated online poker ‘robots’, used increasingly by players of questionable morality to cheat other players online.

“The growing complexity and the amount of data that needs to be processed in order to detect poker ‘robots’ is tremendous,” said Kevin O’Neal, Press Officer for 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 ‘robots’.”

BotGuard has been designed to detect suspicious player patterns using patented artificial intelligence technology. It can analyse and process huge amounts of data to find ‘robots’ among large numbers of ordinary players. While players have their own unique fingerprints that can change over time or in response to a specific challenge, a ‘robot’ plays with few variations. The BotGuard will flag suspicious players, leaving Bwin staff to take appropriate follow-up action.

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