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CANADIAN MEDIA REACTS TO ULTIMATEBET SCANDAL

Yesterday's statement by Tokwiro Enterprises ENRG concerning a cheating scandal at its online poker site UltimateBet.com received almost immediate attention in the Canadian media.
 
The National Post claimed that 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. UltimateBet's stablemate in the Tokwiro group, Absolute Poker.com, was involved in a similar debacle last PokerStarsyear and was fined half a million dollars by the Kahnawake Gaming Commission.
 
The Post's report detailed the content of the Tokwiro announcement, noting that the company is headed by former Kahnawake grand chief Joe Norton, and that the company had refused to disclose the amount of fraudulent winnings. The report quoted poker observers as saying that the amount runs into the millions and that an analysis of the scandal on the online poker forum twoplustwo.com found that one of the cheaters alone won more than $600 000 in the space of four months last year. The software glitch at the heart of the affair was in place for at least 15 months.
 
The National Post report quotes industry analyst Bobby Mamudi, who 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 Post takes a look at the historical background to the Mohawk regulatory jurisdiction, commenting that the Canadian 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," it claims.
 
Murray Marshall, legal counsel to the gaming commission, told the National Post 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.
 
Steven Ware, author of an upcoming book on poker strategy is also quoted in the report, having followed the UltimateBet controversy closely since players first voiced their suspicions online in January 2008. In an analysis on twoplustwo.com of cheater 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 with the newspaper, 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 an invitation by the National Post to be interviewed. 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 [Kahnawake] gaming commission.

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