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Subscribe to RSSEight poker players who say they were victims of a cheating scheme on the popular Ultimate Bet website are suing a Canadian company and unnamed individuals, alleging they violated U.S. laws aimed at combatting organized crime, defrauded players and negligently offered crooked card games.
The lawsuit, filed last Friday in U.S. District Court in California, alleges that the defendants — 6356095 Canada Inc., formerly known as Excapsa Software Inc., and up to 10 Jane or John Does — violated the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, committed fraud and exhibited negligence by enabling the theft of at least $20 million from high-stakes poker players who gambled on the Ultimate Bet website.
It seeks compensation of at least $1.73 million and far more in punitive damages on behalf of the plaintiffs: Daniel Ashman, Brad Booth, Thomas Koral, Greg Lavery, Dave Lizmi, Daniel Smith, Joseph Sanders and Dustin Woolf.
Possibly more important in unraveling the longstanding mystery of the largest known case of online poker cheating, the lawsuit seeks documentation that Ultimate Bet's shadowy parent companies and regulators with the Kahnawake Gaming Commission (KGC) have never made public.
The KGC, the regulatory agency of the Mohawk Council of Kahnawake in southern Ontario, announced in September 2008 that its investigation found that a single individual — former World Series of Poker champ Russ Hamilton — was behind the cheating case. But many players believe that it was the result of a broader conspiracy.
Among them is Haley Hintze, a former writer and editor of PokerNews and now a poker blogger who is working on a book on the cheating scheme due out by summer. In it, she told msnbc.com on Thursday, she will identify at least three others who directly participated in the theft and attempts to cover it up.
Representatives of Excapsa Software could not be reached for comment on the lawsuit. A spokesman for the KGC had no comment on the lawsuit or whether it would respond to any subpoenas.
Ultimate Bet acknowledged that $20 million was stolen from players at the site between 2003 and 2008 through the use of a "backdoor" in the gaming software that allowed the cheater or cheaters to see opponents hole cards in high stakes tournaments. The operators of Ultimate Bet refunded most or all of that money.
But the suit alleges that the company “substantially underestimated” the losses by failing to consider money that wasn’t wagered when the cheaters realized their opponent had them beat.
Read 2008 story about the case: Poker site cheating plot a high-stakes whodunit
“The key to the massive success of the cheating players is not simply that they were able to profit by bluffing when their opponent was weak or betting when they had the best hand, but that they were able to fold and not play … whenever their hand was strong (but) not the best,” it argues. “Thus every time a player had a flush, the cheater would fold a lower flush or straight; every time a player had a full house, the cheaters would fold a flush.”
“There are significant doubts about the methodology of the refunds given to players,” said Alan Engle, a partner in the Meador & Engle law firm in Anaheim Hills, Calif., who filed the suit. “That’s always been a closed process and there are inherent difficulties in calculating the amount of the theft.”
Engle said the early part of the case will probably focus on jurisdictional issues, but he said he is confident that he can prevail on any challenges because Ultimate Bet focused its marketing on U.S. bettors.
“Anyone victimized by someone in a foreign nation over the Internet is in no way required to bring a case in a foreign nation,” he said.
Excapsa Software, now known as 6356095 Canada Inc., is currently in the midst of liquidation proceedings in Canada.
Sheldon Krakower, who is handling the corporate dismemberment for XMT Liquidations of Montreal, said he would soon seek guidance from the Ontario court overseeing the case before responding to the lawsuit.
“We will be filing our seventh report to the Ontario court specifically addressing this matter imminently,” he told msnbc.com on Thursday. “… We need direction from the court on that.”
In a report to Excapsa shareholders in May 2011, Krakower indicated that $7 million U.S. had recently been released to shareholders, and that $4.2 million was being held in escrow until the end of the year. It is not clear whether that money remains in escrow.
Ultimate Bet, which merged with another online gaming site, Absolute Poker, in 2008 to form the Cereus Poker network, was among a handful of online Poker sites that had their U.S. operations shut down in April of last year when the U.S. Justice Department indicted them on charges of violating the Unlawful Internet Gambling Enforcement Act of 2006, money laundering and other charges. The feds also froze bank accounts holding the bankrolls of U.S. players, many of whom have yet to be repaid.
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Did anyone actually think online poker was honest?
Exactly. I'm shocked, shocked, to find that cheating is going on in here!
..... exactly why online voting in elections should never be allowed.
The plaintiffs want money because the company "failed to consider money that wasn’t wagered when the cheaters realized their opponent had them beat."
This means I can sue a real casino to get back money on a wager I never made? The House always wins anyway...
And they were betting significant amounts of money at these games. Unbelievable!
On line voting for elections doesn't work like playing 5 card stud. The only thing in common is the poker face presented by the candidates and you not knowing what they really will do. But I will try to see if I have it right. I have a flush and you have a straight flush, if I fold will your candidate become president? Or if you raise me and win do you get two votes? Help me out here.
One thing for sure is any voting method has got to be better than what goes on in Florida!
Actually, it means that if someone is looking at your hand, and you have them beat (but they would have bet otherwise) then you were cheated out of money that you would have won...
That's one of the things they are suing about. The other is that they want it made public how deep the cheating scandal went and how the refunds were calculated.
i guess ...crime pays...http://www.youtube.com/watch?v=C4xEvfBrTGw
I hear a very small violin playing. I have little sympathy for anyone willing to gamble with a siginificant amount of money. These days I guess that includes the stock market, too, since everything there also seems to be rigged.
Exactly Paul. I love to gamble, but sure as hell would not do it online..
Oh, poor thing, lost your money, if you can't afford to lose don't play ... Suck it up boys its only money we can make more ...
Nice Casablanca reference, Early Out!
Your winnings, sir.
Oh, thank you very much.
Poker at the higher levels is about calculated risk, not gambling. Also, poker is a game of player against player, not against the house so the broader online poker industry wants to be more honest. The poker sites depend on rake and buy in fees for revenue. If no one plays on their site due to questions of integrity or collusion, then that site will not generate money (see free market).
One of the first things which "should" happen is to deny server placement on native reserves such as Kahnawake This also happened at Cahnawoga on the south shore of Montreal. Since the Federal Government has no jurisdiction on these lands, unscrupulous individuals offer the natives lucrative funding to host the servers. These rules were installed to protect the integrity/individuality of the native reserves but as always happens, the situation is taken advantage of by some. Who knows how many more "internet scams" are being conducted from these locations?
White man steal land. We steal money back online. WC Fields was right there is a sucker born every minute. Does anyone really believe that the slots, poker and blackjack machines in a casino are honest? Just like tic tac toe the only winning move is not to play.
I am a Nevada attorney who has been practicing in Las Vegas for 27 years. Unequivocally, you are an idiot if you play online poker! Use your brains people!
LMAO lets see you were doing some thing illegal on line, got cheated and now want to use legal means to make an attorney rich and get your money back Blahahahahaha
Now that's taking a gamble.......such fools.......
How could this possibly happen - I thought that all poker players were inherently honest. lol
While I enjoy playing poker on-line at one of the free poker sites, only an idiot would gamble their hard-earned money with shysters. They deserve to have their money stolen/confiscated.
These 'gamblers' made poor bets.
I thought gambling online was illegal. No wait, the government has realized the amount of money it can earn by participating in it. You can bet the house there'll be cheating in those games too.
It is hard enough playing face to face and winning. Why would anyone think it would be easier online?
people who say that online poker is rigged are the ones who don't profit off of it. this is only one case that there has been cheating involved.
No there was another highly publicized cheating ring a few years ago out of the Caribbean. The cheaters were able to actually see your hand. Either way online gambling is illegal I don't think they should get the money back. They broke the law. That would be like me selling drugs and getting cheated because someone scammed me and then trying to sue. I wouldn't trust a computer program that another company came up with to be honest about the cards especially when that company's sole business is making money off you losing at cards.
That you know of , Tru. That is the point. You can't know how honest the game is. At least in a actually real poker game you can watch the deck, the shuffle, and the deal. For all you know the game is being run by some "Nigerian Prince".
@Tru, No here's another one.
http://www.freakonomics.com/2007/10/17/the-absolute-poker-cheating-scandal-blown-wide-open/
http://www.slate.com/articles/technology/gaming/2005/01/hold_em_fold_em_cheat_em.html
Hell, they don't have to cheat...by not being tightly regulated from a government agency they can write any dealing algorithm program they want instead of making the deal out purely random. Deal someone 4 of a kind and another a straight flush and another aces full boat and watch the betting fly while the house takes the rake from huge wagers. Bad beats happen far more often online due to these dealing algorithms while making it impossible to know what odds to play. Online poker playing is for amusement only until they are tightly regulated with everything above board....and even then don't bet the farm.
I can't imagine betting online. They cheat you at the casinos.
Hey Mary Jones, you are correct, but at least you get free drinks at the Casino's...LOL
A fool and his money is soon parted.
you must get your quotes right,,,it is " a fool and his money are some party" now that I have brightened up your day I can go back to bed
Or my favorite variation "a fool and his money are soon elected"
" A fool can spank his monkey and become president "
"A fool did spank his monkey and became president"
Gambling is a addiction and just like other addictions it can be self destructive if not controlled. Allowing online gambling makes it just too easy for addicts, if you had to travel to feed your addiction it would make it just a little harder witch means it might be a little easier to control. Noticed state govts are starting to encourage more gambling, just to close some revenue holes, what a short sighted solution that is.
Addicts will find other ways to gamble...either in their bedrooms (online), local underground games, their local stationary stores (scratch cards, lotteries, etc.), state-owned race tracks/slot parlors, or in legal casinos. Believe me...they WILL find a way.
Poker is a skill game over the long run. If you put two players together at a legimitate poker game, where one player is better than the other, and the two players were to play exactly the same way each and every hand, the better player CANNOT lose over the long run. It is mathematically impossible...just as "the house" will never lose with Nevada-style casino games (e.g. black jack, craps, etc) over the long run. Thus...
To the US Government...for the love of God:
-Legalize online poker in the US
-Open up online poker licensure to the general public with a moratorium like California did (subject to extensive criminal background checks of course)
-Regulate the online poker environment
-Force the owners of the US online poker sites to provide access to the software code for random analysis by regulators, statisticians, mathematicians, poker experts, software development experts, IT security experts, etc.
-Tax the heck out of the owners of the US online poker sites (e.g. 24%)
-Watch the US debt get paid down
-Watch new tech jobs get created (developers, testers, product managers, etc.) as the result of this new endeavor
-Watch business owners (large and small) thrive by providing clean games on the internet
Oh I forgot, corporate-owned casinos will never allow politicans vote this into law. Sorry to have wasted everyone's time with my comment.
Mr. Varney,
I couldn't have said it better myself...
What about those of us that aren't addicts, and enjoy gaming online? Should we make sure beer-stores are 300 miles from any residential areas, to protect the alcoholics??
*Yawn...*
Mr. Varney,
Thanks, a post worth the time to read...
H2 Gambling Capital, the leading supplier of data and market intelligence
regarding the global gambling industry, projected in a report released last year
that regulating all forms of Internet gambling except sports wagering in the
U.S. would generate a gross expenditure of $67 billion over five years and
25,470 new jobs...
I'm not sure of the date on this article but I remember Rep Steve Cohen being a co-sponser on it.
Cohen is the Representative from Tennessee that spearheaded the passing of Powerball and lottery legislation in Tennessee. Which was no small feat.
I'd like to see this legislation put in place. Not sure of its status.
...In introducing the legislation, Rep. Barton indicated that strong grassroots
support from constituents was a leading influence in his decision to take on
this issue. Public pressure for regulated online gambling has increased
significantly over the past few months in light of the Department of Justice's
indictment and removal of a number of major online poker operators.
In addition to Rep. Barton's bill, the Internet Gambling Regulation, Consumer
Protection, and Enforcement Act (H.R. 1174), which would regulate all forms of
Internet gambling activity except sports wagering, was introduced in March by
Rep. John Campbell (R-CA). Also pending is a bill introduced by Rep. Jim
McDermott (D-WA) earlier this month, the Internet Gambling Regulation and Tax
Enforcement Act of 2011 (H.R. 2230), which would ensure that taxes and fees are
collected from wagers placed over the Internet.
In the case of poker, only the rake needs taxation as it's player vs player money...not player vs "house" money.
Hell I worry about my money every time I purchase something on the net. Why the hell am I going to believe gambling on the net is hones. I rather play the ponies on OTB and get my money then risk it on some software that can be manipulated by people I can't see!
I was able to win. You just had to realize that not only were you playing against other people, you were also playing against the site, adjusting your play accordingly. I folded a straight flush once because I had the low end and I knew the other player had the high end. When I folded I showed, then he showed, and I was right. Everyday that the government wastes not legalizing online poker, it's losing millions. The debt could be paid of in a year by just legalizing and regulating online poker.
Exactly right on both points. You can't play real solid poker all the time because you are playing against players AND a program. If (and when) someone like Harrahs / Ceasars starts a legal online site with a real life mathematical poker program, U.S. players, along with others, will flood the site. All the taxes will easily pay down the debt.
polfnikufesin
"I folded a straight flush once because I had the low end and I knew the other player had the high end."
How did you know ?? Ahem......
BS,
If you don't know about intuition, don't play poker!
You gotta know when to foldem,know when to hold em,know when to walk away,kow when to run.
I would say these cheaters are running pretty fast right now.
No one here in Canada cares about your American laws.
Karma... my son... karma
same goes about canada's laws
Yeah... Well... Duh?
had to laugh at the canadian poster. its funny because if it werent for the united states below it, canada could be invaded and over thrown by an angry troop of girl scouts.
Up your yankee ass ! Canada is superior in soooooo many ways. Read your history books you ingrate.
how cold is it in canada...
Canada is a joke! Can't go fishing up there because of a D.U.I that I got 15 years ago!
@schoolyard,
No Kidding ??? What's up with that ??
Don't get a DUI, there or anywhere, that's simple. Here, you'd still be driving after twenty of them. We need stricter laws for that too.
My stepson lost his license for 10 years after his 3rd one...I guess you can still drive after 20 of them but illegally I would suppose...In my opinion .08 is way to low for the legal limit, and sobriety check points should be illegal ...
I could care less about Canada but they were the first country to kick our ass in war.
Is this why 98% of all Canadians live within 100 miles of the us border.
I'd rather play in person than online. If cheating in person is easy, imagine how easy it is online.
Here in Nevada, within the live (face to face) poker community, there's a saying:
If you play online, you're either a cheater or you're being cheated.
never heard that saying in my life.
This is why they call it on line GAMBLING!!!!!!!!!!!!! Believe you can win big on line and I can give you the Easter Bunnys home phone number or perhaps the tooth fairy!
I'll take those numbers. Both of them have stiffed me over the years and I'd like to complain. But make it quick, I'm trying to bluff my way into winning this hand w/ a pair of 3s. I am so buying an island w/ my riches!
:D :D
This story should be considered a 'reminder', not 'breaking news.'
Isn't Internet gambling illegal? Don't the plaintiffs incriminate themselves by filing the suit?
And yet, it's still not half as funny as the drug dealer who calls 911 to say he got robbed by a buyer.
Freakz11114 actually thinks Canada is real country and not the 51st state.I think that is just so-o-o-o-o cute!!!
And that would make Mexico the 52nd
You were illegally betting on an illegal, international gambling site, lost your money and now you have the balls to sue?
Too bad. Don't gamble. You could have gone to the casino and lost that money just as easily.
I have won a considerable amount of cash playing on-line poker. I have a friend who won over 100K in one year of playing. I know several players that have had success. I have also encountered many, many so-called players who have absolutely no business playing poker.....period! Unless you know how to play the game, you should not play. These idiots (fish) are just pumping the pot for the players who do know how to play. I also wonder why these AMERICAN players are even playing.....isn't it illegal in the U.S.? I will admit however, that great caution should be adhered to when it comes to playing on-line, as their ARE professional players playing amongst the novice and inexperienced players, and they know how to extract your cash..............
the business model encourages cheating. more players = more pots = more rakes. the websites are at an advantage to "help" weaker players so they don't get discouraged and leave. i've seen some incredibly stupid plays get rewarded my miracles. so if you play, play with thier money - not your own!!!!
thats why they call it gambling
These idiots deserve to have their money stolen!!! Anybody who would gamble that amount of money using an online anonymous website is a complete fool and a sucker.
Are you kidding me? Who is STUPID enough to think online gambling is on the up and up? I heard it's ran by the Super Committee.
This is what scares me about online poker. There is just no way to know what's going on behind the scenes. It is certainly possible for online poker to be fair for everybody. The site just takes a small percentage of each pot and simply acts as a random card generator. However, I would think it would be too tempting to alter the program to rake in even more cash.
That's why when I play slots (a few bucks and just for fun) I prefer the old fashioned ones over video slots. Each tumbler will always display its icons in the same order every play. Video w/ a virtual tumbler? Yeah, sure.
Way back in the days of the original Nintendo I noticed that when playing sports games agianst a computer opponent, computer players were always faster than your human controlled players. I couldn't get people to understand that it was still a form of cheating if the parameters could be changed to favor the computer opponent. In video poker, you're trusting that the generation of cards is truly random when done by a computer that can simultaneously "know" the hands of each player as it deals. That is a significant amount of trust to place in strangers.
These clowns remind me of the 911 caller recently in this area. Called 911 because the neighborhood crack dealer ripped him off and didn't give him enough crack for his money. Guess who went to jail on that one?
How come I can't post here
Maybe you did'nt Ante.
Never mind