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TOKWIRO PAID OUT ALMOST $23 MILL IN ONLINE POKER SCANDAL

5/29/10 - The online poker cheating scandal that weighed so heavily on the reputation of poker sites Absolute Poker and UltimateBet, along with parent company Tokwiro Enterprises, still fascinates the industry despite the passage of years. This week Tokwiro chief operating officer Paul Leggett blogged on the latest controversy – the extent of refunds and the methodology deployed.
 
His comments come in an atmosphere where a former poker magazine editor continues to investigate the hole card cheating scandal and publish all the detail about those involved; experts on the top poker message board 2plus2 analyse every move by the company and one group carries out final verifying checks before releasing more real identities, long demanded by poker fans.
 
Leggett blogs that Tokwiro initially refunded a staggering $22 054 351.91, followed by an additional $227 956.66 after an error was discovered regarding split pots. 
 
“Later on we refunded an additional $494 932.20 to several accounts that had their refunds on hold because they were still under investigation at the time we did the refunds but were eventually cleared and processed. 
 
“So the total amount that was refunded to players was $22 777 240.77 USD,” Leggett revealed.
 
With the costs of sorting out the problems, paying fines imposed by the Kahnawake Gaming Commission and launching publicity initiatives to recover credibility, the final cost to Tokwiro has clearly been considerable.
 
Leggett goes on to justify the ‘Net Loss’ methodology used to determine how much to refund players, revealing that his company ran into many issues. 
 
“We were limited by the information available to us and we had legacy data sources and applications from the previous owners that we learned we could not trust,” Leggett blogged.  “We also were initially relying on the old UB software developers to help us with the analysis, which proved very problematic.
 
“We eventually hired independent database analysts and a poker mathematician to help us redo the analysis because of the frustrations we had dealing with the problems.
 
Leggett gives extensive detail on how the exercise involved, the difficulties that were faced and how the ‘Net Loss’ assessment worked.
 
In closing, he referred to the significance of another refund analysis carried out by Uri Kozai, an expert employed by the liquidators of Excapsa, the owners of the company which sold the poker operations to Tokwiro. The liquidators were motivated by a desire to confirm the amounts of money Tokwiro claimed were stolen from players was accurate.
 
“We eventually settled with [the previous owners] for $15 million in order to get players their money back,” Leggett claimed.  “Excapsa is currently in liquidation and required court approval to settle with us.
 
“[Kozai’s] analysis was nowhere near as thorough as ours.  He simply reviewed the work we did and was satisfied that our analysis was accurate.  It is untrue that he developed the refund methodology that we used.”



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