Tuesday, September 30, 2008

Online Gambling Cheats - They Can See Your Cards

If you enjoy a hand of poker online, but have not had much success in achieving the 'big win', this could well be the reason why. Employees of two of the world's largest internet gambling sites have defrauded players to the tune of tens of millions of dollars.

The scam was uncovered by a very diligent Australian online poker player turned detective, who first uncovered a $US10 million (at least) cheating scandal at the two poker websites.

The 'detective', Michael Josem spent many hours analysing detailed hand history data from Absolute Poker and UltimateBet. He discovered that certain players were winning money at a rate that was statistically too fast to be considered legitimate.

Both gamling sites are owned by the one parent company, and upon learning of Josem's investigation and results, began their own internal investigation, which in turn found that 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.

In the latest turn of events, one of the world's most successful poker players, Russ Hamilton (winner of the 'World Series Of Poker'), has been named by official investigators as the main perpetrator of the scam.

Late last year, when Mr Josem first became suspicious of unfair play at Absolute Poker, he plotted the win rate of several thousand players against those user accounts he suspected of being involved in the fraud. he found that these accounts won money at a rate 100 times faster than a good player could ever possibly win. The cheating accounts played every hand as if they knew every card that the other players had.... which has now been discovered, they in fact did.

The Kahnawake Gaming Commission which licenses several hundred online casinos and poker rooms, including Absolute Poker. It found that the website had tried to cover up the cheating by deleting gaming logs and records. The site was fined $US500,000 for their part in the conspiracy. Absolute Poker also repaid those who had lost money. they did however stop shor at identifying the perpertrators.

With assistance from some friends, Mr Josem used the same statistical methods to uncover an almost identical cheating scam at Absolute Poker's sister site, UltimateBet. One of the most successful 'cheaters', was a player known sinply by his user name of "NioNio". This player scoed a healthy profit of $300,000 in just 3000 hands.

Statistically speaking, the odds of a player winning at the rates afforded by "NioNio", are around the same as winning a one-in-a-million lottery six times in a row. In an ettempt to avoid detection, the winnings were passed between the fraudsters' multiple user accounts.

The punishment? - The Kahnawake Gaming Commission has ordered UltimateBet refund the money to all players adversely affected by the cheating scheme. The gambling website has also been fined $US1.5 million.

The moral of the story - don't gamble online - it's really a loser's game!!

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