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"Back Door" Cheating Scandal Rocks Online Poker 427

Posted by kdawson
from the know-when-to-hold-'em dept.
AcidAUS sends us the story of an online poker cheating ring that netted an estimated $10M for its perpetrators over almost 4 years. The article spotlights the role of an Australian player who first performed the statistical analyses that demonstrated that cheating had to be going on. "In two separate cases, Michael Josem, from Chatswood, analyzed detailed hand history data from Absolute Poker and UltimateBet and uncovered that certain player accounts won money at a rate too fast to be legitimate. His findings led to an internal investigation by the parent company that owns both sites. It found rogue employees had defrauded players over three years via a security hole that allowed the cheats to see other player's secret (or hole) cards." The (Mohawk) Kahnawake Gaming Commission, which licenses the two poker companies, has released its preliminary report. MSNBC reporting from a couple of weeks back gives deep background on the scandal.
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"Back Door" Cheating Scandal Rocks Online Poker

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  • by Stanistani (808333) on Tuesday September 30, 2008 @04:07PM (#25208909) Homepage Journal
    Not a bad deal, but I'll want to see the flop.
  • by davidwr (791652) on Tuesday September 30, 2008 @04:08PM (#25208913) Homepage Journal

    Illicit high rollers get free room and board for the next 5-10 years.

  • This is why (Score:5, Funny)

    by bugeaterr (836984) on Tuesday September 30, 2008 @04:08PM (#25208923)

    I don't gamble.
    I invest my money in the stock market.

    • Re:This is why (Score:5, Insightful)

      by FooAtWFU (699187) on Tuesday September 30, 2008 @04:12PM (#25208993) Homepage
      And, assuming you're not going to be taking it out for another 10-40 years, it's a good, safe investment vehicle indeed. Buy stock now! (and in the future, regularly, with a fixed amount monthly, and take advantage of dollar cost averaging!)

      Whee.

    • by savuporo (658486)

      Yeah, you could do worse, like go vote on an election or something.

    • by TheRealMindChild (743925) on Tuesday September 30, 2008 @04:14PM (#25209017) Homepage Journal
      Well, it's rather brutal here. Right now we are advising all our clients to put everything they've got into canned food and shotguns.
      • by MightyYar (622222)

        I thought I was the only one who remembered anything from Gremlins 2 (yes, there was a sequel).

    • Re:This is why (Score:4, Insightful)

      by Hatta (162192) on Tuesday September 30, 2008 @04:16PM (#25209049) Journal

      You kid, but the stock market is actually worse than gambling. At least when you gamble you know what your odds are.

      • by onion2k (203094)

        Unless people are cheating. Then you think you know the odds, but the reality is something else entirely.

      • But your odds on average are still better with the stock market. Yea you get down periods. But in the long term you see a general upward direction. For real gambling you will find a general downward direction. The stock market people usually want you to make money. Gambling wants to take your money. You are gambling if you are going for short term trading. But for long term your odds are quite good especially if you diversify across different areas. So any one area could die and you are still going strong

        • by jandrese (485)
          There is only one way to make money gambling: Make sure you are "the house". In the long run, only the house wins.
          • Re:This is why (Score:5, Interesting)

            by gnick (1211984) on Tuesday September 30, 2008 @04:41PM (#25209465) Homepage

            There is only one way to make money gambling: Make sure you are "the house". In the long run, only the house wins.

            Actually, I cleaned up last time I was in Vegas. My buddies did too - We developed a 'system'.

            1) Fill your pocket with nickels.
            2) Find a nickel-slot, sit down, and drop a nickel in.
            3) Wait for the cocktail-girl to walk by and spin the slot.
            4) Tell the girl, "Why yes, I would enjoy a Heineken on the house."
            5) Accept your beer and walk off to find another nickel-slot. (Alternatively sit at the same one, but that will require tipping if you want regular service.)

            Maybe you get your nickel back and maybe you don't. Who cares? It's a full night of nickel-Heineken. A buck goes a LONG way.

            • Re:This is why (Score:5, Interesting)

              by spun (1352) <loverevolutionary.yahoo@com> on Tuesday September 30, 2008 @04:54PM (#25209643) Journal

              My wife doubted we would get comped at the nickel slots. Not only do you get comped, the drinks are stronger than the ones you pay for at the bar! Add to this the cheap rooms and cheap food, and you've saved enough to pay for some expensive entertainment while still vacationing on a budget.

              • Re: (Score:3, Funny)

                by Missing_dc (1074809)

                Did your wife mind the "expensive entertainment" you bought?

                It is (legal after all in) Vegas/Nevada!

                • Re: (Score:3, Informative)

                  by spun (1352)

                  Prostitution is not legal in Vegas, though it is in the rest of the state. Our expensive entertainment consisted of rides, Cirque de Soleil, Madam Tussaud, video games, and more rides (none of which involved any other women, sadly)

            • by Hoi Polloi (522990) on Tuesday September 30, 2008 @05:05PM (#25209815) Journal

              But then you find out that all the toilets have locks on them charging $10, or even worse, they are slot machines too. "Come on cherries! I need to pee!"

            • Re:This is why (Score:5, Insightful)

              by Xtifr (1323) on Tuesday September 30, 2008 @05:20PM (#25210059) Homepage

              That's pretty rude. Not to the casinos (I could care less about them), but to the poor, hardworking "cocktail girls". I do more-or-less the same thing when I'm in Vegas, but I make a point to tip the waitrons well. This means: they'll happily keep bringing the drinks; they'll carefully not notice how few nickels you're putting in the slots (as long as you keep up a minimal pretense); and you're still getting drinks at bargain-basement prices.

              "Do what you wanna--do what you will;
              Just don't mess up your neighbor's thrill--
              and when you pay the bill, kindly leave a little tip
              to help the next poor sucker on his one-way trip."
                                  -- Frank Zappa, "The Meek Shall Inherit Nothing"

        • by pbhj (607776)

          But for long term your odds are quite good especially if you diversify across different areas. So any one area could die and you are still going strong.

          So if you have lots of money (to diversify) and won't need it at a particular time long term investments work. If you have a small pot and may need the money at a particular time (eg when you retire) then you're screwed and you may as well enjoy some poker, smoke big cigars and hope to die young.

  • by elrous0 (869638) * on Tuesday September 30, 2008 @04:08PM (#25208939)
    It's hard enough to trust casinos even when they're under the scrutiny of a licensing body as serious as the Nevada Gaming Commission, much less when they're under no scrutiny at all (or under some "commission" with no actual legislative or enforcement authority). Casino gambling in general is a sucker bet (even under strict conditions the odds always favor the house), but online gaming and other unregulated gambling is ESPECIALLY so (since you haven't the slightest assurance that you're not being cheated).

    I still don't understand why people do this. Are they really THAT desperate to place a bet, any bet? Might as well become a day-trader and play the stock market for your fix. It would be a lot more regulated than most online poker.

    • by Free the Cowards (1280296) on Tuesday September 30, 2008 @04:31PM (#25209301)

      People do it for two reasons.

      1) It's fun. When you plunk down $20 for you and your significant other to see a movie in a theater, you have no chance of ever getting that money back. But it's worth it to you for the entertainment. Same goes with gambling. You lose money but a lot of people enjoy it. I don't, personally, but many people do.

      2) It's profitable. When playing poker, you don't have to beat the house, you just have to beat the other players. The house takes a portion of the winnings but if you can consistently beat the rest of the table then you come out ahead. It's not like other casino games in this respect. You're not playing against the house, you're just paying the house for the privilege of playing against other people. You can, and many people do, make a living playing poker.

      Well, there are actually three types:

      3) Idiots think they will win big.

      But the point being, with reasons 1 and 2 it's possible to gamble without being irrational or stupid.

      • Re: (Score:3, Insightful)

        by Cajun Hell (725246)

        But it's worth it to you for the entertainment. Same goes with gambling. You lose money but a lot of people enjoy it.

        How can they enjoy it, when they know the trend must result in loss?

        Oh, and: how dare they enjoy it?! I don't enjoy it, so they shouldn't either.

        BTW, they're having sex the wrong way too. And they listen to crappy music. The "beer" they drink sucks. They run the wrong OS on their personal computer, and the wrong text editor too.

        Something has to be done about these people.

    • Re: (Score:3, Informative)

      by venicebeach (702856)

      Casino gambling in general is a sucker bet (even under strict conditions the odds always favor the house), but online gaming and other unregulated gambling is ESPECIALLY so

      This is exactly how poker differs from other casino games. Since players play against each other, the game is not biased against anyone. The house takes a cut of each pot (the rake), but skill determines who wins in the long run. For example, here in California poker is legal while other gambling games are not since it is considered

  • You have to be crazy to trust the house in online poker. In physical poker, it's a lot easier to see when the house is cheating.

    • Really? [wikipedia.org]

    • Re: (Score:3, Funny)

      by mfh (56)

      In physical poker, it's a lot easier to see when the house is cheating.

      Because they are always cheating? :)

    • Re: (Score:3, Insightful)

      by Xiaran (836924)
      In physical poker the house has no real motivation to cheat. Poker is a nice steady winner for a casino... they just take a cut of every pot. They are however motivated to have people gamble more money at poker thus increasing the pot.
    • The problem is that you can't tell what the other players are doing. Are they sitting in the same room, using a chat program, talking on the phone? I know the companies have been going after programs where random strangers see each other's cards and it computes odds based on that, but unless table spots are random you can't control what people do.

  • Use the Front Door! (Score:4, Interesting)

    by imstanny (722685) on Tuesday September 30, 2008 @04:11PM (#25208975)
    Backdoor? That's nothing. What if I log into a table (which seats 10 people) with 1 friend... or worse, 8 friends -- and then work as a team.
    • by RoverDaddy (869116) on Tuesday September 30, 2008 @04:22PM (#25209137) Homepage
      In theory the online casinos have ways to catch this kind of collusion. If 8 people at a table are connecting from the same IP address, that sets off alarm bells. If the same 8 accounts keep playing together at the same table day after day, even if they're all over the world, that sets off alarms. The local game clients themselves can look for signs of screen scraping applications that might be capturing the hole cards and transmitting them to other players.

      All that said, I have no idea whether or not the online casinos are really successful at preventing outside collusion.
      • Re: (Score:3, Interesting)

        Those methods you mentioned don't seem like they'd be all that fool proof. A team can easily communicate via skype, IRC, IM or even old fashioned telephone (so you don't need to use screen scrapers). There's easy ways to get around always having the same IP (Internet cafe, Wifi, dial-up, proxies etc.) As for the same accounts playing at the same table all the time it seems like it's a matter of having a large enough team, decent record keeping to keep track of who won what and many accounts. If organized te

        • by suggsjc (726146) on Tuesday September 30, 2008 @05:27PM (#25210175) Homepage

          If organized teams have ripped off Casinos in Vegas (the MIT blackjack team comes to mind) then surely online casinos get hit all the time and don't know.

          You are missing the point. In poker games where players are not competing directly against the house but against other players and the house just charges a small percentage of the overall pot as a fee to play their game, they aren't actually stealing money from the house but the other players seated at the table. So, while the sites want to assure you that there are not any "back doors" they actually don't lose money directly from them, only indirectly if they end up losing aggregate business as a result of people not gambling due to mistrust.

    • by Derek Loev (1050412) on Tuesday September 30, 2008 @04:40PM (#25209437)
      That's called collusion and although it's used from time to time, the regulars pick up on it fast and the software recognizes it even faster. What people aren't understanding about online poker is that it's not the same as "placing a bet", it's a game based on mathematical probability. Online poker players have databases full of information on themselves and their opponent. Every single decision made is either positive expected value or negative, and after a while the better players learn to recognize what situations will yield a positive result. This story has been around for a few years and the real interesting part about it is the fact that it was an online community of poker players who ended up exposing it. This scandal has been developing for quite a while now and if anybody feels like getting the whole story go to the community where it all happened [twoplustwo.com]. There's real interesting reading there and I'm surprised it has gone unnoticed on Slashdot as long as it has.
    • by greg1104 (461138)

      If you do that often enough, the software running the site should pick up the collusion and kick you out. Quoth wikipedia on poker cheating [wikipedia.org]: "online poker cardrooms keep records of every hand played, and collusion can often be detected by finding any of several detectable patterns (such as folding good hands to a small bet, as it is known that another player has a better hand)". I expect any poker site I play at is using software to check for basic cheating like that, but of course the same sort of incom

  • No James deGriz (Score:4, Insightful)

    by pluther (647209) <pluther.usa@net> on Tuesday September 30, 2008 @04:15PM (#25209033) Homepage

    They played under the same accounts over and over for four years??

    It's like they were begging to be caught.

    In the words of the Stainless Steel Rat, "Learn to graft and walk away and live to graft another day."

    • Re: (Score:3, Insightful)

      by jandrese (485)
      The article is very weird. First it goes and talks about how the people on the forum were able to track a single account making ridiculously good bets well outside of what chance would suggest is probable, then in the next paragraph it talks about how the perpetrators were creating hundreds of fake accounts and swapping them out constantly to avoid exactly that sort of analysis. The depressing thing is that the take away lesson from the article is: If you have a surefire way to cheat at poker, make sure
      • Re: (Score:3, Informative)

        by venicebeach (702856)
        There were not hundreds of accounts, but there were several.

        Some of them were identified by anomalous statistics, but some were caught by following the money transfers among accounts. At some point a "good samaritan" from inside the company posted some transfer histories to the forum where this was being investigated, which allowed some of the dots to be connected.
  • 'insider knowledge' (Score:5, Interesting)

    by B5_geek (638928) on Tuesday September 30, 2008 @04:15PM (#25209035)

    This cheat required somebody on the 'inside' to perpetrate. As with most casino table games, if you have somebody on the inside, cheating is easy.

    This is how I cheated at various online poker sites. Me and two buddies would join a table, and have a VNC connection setup to view each others hands. two of us would play dummy hands based on whom had the best hand of the bunch. We cleaned out every table we played at.

    • Re: (Score:3, Insightful)

      by ivan256 (17499)

      This is why I don't play poker online.

      Doing exactly this is so easy that you have to assume at least half the table is doing it.

      At least at a casino you have a chance of noticing a cheater.

    • by HEbGb (6544) on Tuesday September 30, 2008 @04:26PM (#25209211)

      That's so obvious, I'm stunned that anyone would play if this were possible. They don't have a way to prevent collusion, such as randomly assigning tables?

    • by mvicuna (30133) on Tuesday September 30, 2008 @04:26PM (#25209217) Homepage

      If you played at any of the levels where the pros inhabited you'd have been identified and banned quickly.

      Most of the online pro's are using tracking software and doing analysis which would have picked up on you three. Though I hardly doubt they'd have needed it, the math involved in poker is only part of being a winning player.

      2+2, where most of the collaboration is done, is the /. of the poker world. A lot of Statistical anomalies are discussed and investigated there.

      Show of hands if anyone knows about the DERB thread?

    • Re: (Score:3, Interesting)

      by pete-classic (75983)

      Am I to understand that you just admitted to engaging in Federal wire fraud in a public forum? That's quite a gamble, sir!

      -Peter

  • I'm amazed that people are surprised that an online gambling site has something fraudulent about it...

    Maybe I'm being archaic here, but plain 'ol gambling seems sketchy enough as it is. When you take that online and you aren't even rolling real dice or shuffling real cards, can you really expect to have fair and truly random experiences?

    Now I think the people who perpetrated this scam are scum, but it really seems to me that the players who got ripped off shouldn't have been gambling online in the first p
  • by Anonymous Coward on Tuesday September 30, 2008 @04:17PM (#25209065)

    For those who don't know, Kahnawake is Mohawk territory claimed by the aboriginals (aka Indians) in Canada.

    The Mohawks claim to sovereignty over the land, and do not allow the provincial & national police to enter.

    To avoid stirring up trouble, the Canadian government usually doesn't send police to Kahnawake, even though the Canadian government doesn't recognize the Mohawk claim to exclusive sovereignty.

    Without any real police force, crime flourishes in Kahnawake. Drug smuggling, gun smuggling, people smuggling, cigarette smuggling, you name it.

    Don't trust any business in Kahnawake, let alone a business attractive to crime, like gambling.

    Not long ago, there was a Mohawk criminal driving at high speed (off-reserve) trying to get to the Mohawk territory before getting caught by the police chasing him. He made it on to the Mohawk territory, and the police abandoned their pursuit. Sadly, the Mohawk driver ran a stop sign and killed a Mohawk teenager.

    For the people of Kahnawake, it seems that it is more important to be the victims of aboriginal criminals than to cooperate with non-aboriginal law enforcement. Sad.

  • Now that these online gambling sites have been proven as havens for cheaters, our innocence has been broken and our trust that anonymous strangers on the internet would play games of chance for money in a purely ethical and fair manner has been shattered.

    For shame!

  • by compumike (454538) on Tuesday September 30, 2008 @04:21PM (#25209119) Homepage

    From what I gather from the articles, they didn't actually write any code that tapped into the server... it was just getting information from the client app that was residing in memory but was not displayed to the screen.

    This is just an enormous case study suggesting why strict client/server separation is essential, and that clients only get the information on a "need to know" basis.

    Isn't this a fairly standard design practice? How did this happen?

    --
    Hey code monkey... learn electronics! Powerful microcontroller kits for the digital generation. [nerdkits.com]

    • by mapsjanhere (1130359) on Tuesday September 30, 2008 @04:30PM (#25209277)

      Isn't this a fairly standard design practice? How did this happen?

      --

      The background story to all this is highly fascinating - there are a series of companies of everchanging names involved, that first wrote the software, then sold it to a gambling company, that then got taken over, and somehow always the same names show up. This backdoor was probably planted long ago for just the purpose it ended up being used.
      As for "oversight", the gambling commission oversees one major operation - the online poker sites. Which also pays their bills.

  • there is no technological security fix made by a man that cannot also be broken by a man

    all you need is enough incentive

    given that realization, and the boundless financial incentive implicit in onliner poker played for real money, it should rapidly dawn on you that there is no such thing as an online poker game played for money that cannot be fixed, and probably is fixed, if you are pumping real money into it

    playing online poker is really foolish. its an arms race between exploitation and security, and the

  • This illustrates why online gambling is so @#$%ing stupid. How can you possibly be sure the game is honest?

  • by jellomizer (103300) on Tuesday September 30, 2008 @04:27PM (#25209223)

    Yea, Yea the found a hack and they exploited it... Big Whoop, that not news. The real news is that Online Gambling Industry is starting to use Decision Support Systems and other Business Intelligence methods for finding the cheaters...

    Most companies are pathetic with incorporating Business Intelligence into their infrastructure. They collect the data and do nothing with it. Most IT people don't care about doing anything with it. It is quite sad.

  • superuser (Score:5, Informative)

    by erbbysam (964606) on Tuesday September 30, 2008 @04:28PM (#25209233) Homepage

    o my....story time...
    The phrase of the day is "superuser"
    This data was given to many professional online poker players who analyzed the data in late 2007 (see 1 year ago, 10/16/07 to be exact) when they requested the data from the online site "Absolute Poker".

    Instead of the site giving them the usual data which hid the opponents cards unless they had shown them during the hand, they sent all the raw data which included the opponents hole cards, and specifically every player and spectators player number. One of the spectators was player number "363" I believe which was incredibly low (one of the first ever to register on the site).

    When designing the software they must have used several "superuser" accounts to make sure that it was working correctly, so they let it see all the cards on the table. Someone inside Absolute Bet discovered(or knew they entire time) that the loophole was still open and used multiple accounts to siphon hundreds of thousands if not millions of dollars off of their high stakes users. This was used also over other websites running the same backend software.

    What made this so obvious, simply put, to the high stakes players was that these players were playing perfectly over thousands of hands which isn't possible unless you know all the cards on the table.

    For more reading see:
    http://freakonomics.blogs.nytimes.com/2007/10/17/the-absolute-poker-cheating-scandal-blown-wide-open/ [nytimes.com]
    or for more poker talk:
    http://archives1.twoplustwo.com/showflat.php?Cat=0&Number=12523924&page=0&fpart=1&vc=1 [twoplustwo.com]

  • Surprised? (Score:4, Funny)

    by MarkvW (1037596) on Tuesday September 30, 2008 @04:35PM (#25209349)

    I am shocked, SHOCKED, to learn that there is cheating occurring in online poker!
    Round up the usual suspects . . .

  • by spacedrive4000 (1375597) on Tuesday September 30, 2008 @04:35PM (#25209355)
    Ron Rivest and others have built many good systems for creating secure online poker games. It's possible to deal the cards in a way that the server can't eavesdrop. Now, of course, these can't do anything about n-1 people at the table working together through outside channels. And a good algorithm can still be defeated by bugs in the client software. But the point is that there are good algorithms out there.
  • by dosun88888 (265953) on Tuesday September 30, 2008 @05:17PM (#25210005) Homepage

    seem to be from people that know absolutely nothing about poker and ultimately nothing about how the sites make their money, so let's clear up a few things.

    1. It would never be in the best interests of the company to try to allow this to happen to anyone, as the cost would be too high. If players had a hint that they were being cheated they would never play there. That $10MM figure is nothing compared to what the sites generate from rake alone. The only people who could benefit would be hired contractors who wrote the code and got paid some small amount of money to do so. To them, it would be worth the risk to try to cheat somehow, and they obviously did.

    2. To the few people who seem to think that they were getting information that was already on their systems from memory that was encrypted or something, well, that's false. The "special" accounts were sent information that other players do not get sent. You only get your hole cards, and it's not until a showdown where anyone but you and a random server out there know what anyone has.

    I guess that's it, aside from the extreme unlikelihood that anyone would try to cheat in this manner at a small (say 30-60 or less) game. The risk/benefit doesn't add up at those stakes.

    A few random points: high stakes poker can be shady at times, and collusion in the smaller games can be defended against to some extent (by either not playing, or using the style of collusion against the colluders. At times games can appear to be collusive due to excessive raising, but the majority of the time that's just strategy.

  • Cheating (Score:3, Interesting)

    by horza (87255) on Tuesday September 30, 2008 @08:02PM (#25212071) Homepage

    In online poker:
    * the house doesn't need to cheat. The amount they make verses their costs means they don't need to
    * players try and cheat via collusion, but their edge is so small it's not worth worrying about
    * if you are playing cash games you will probably be fleeced by bot networks. I know people that run them, they live in tax havens and siphone off fortunes via a network of Net-teller accounts etc. Most of the bots run via valid accounts and credit cards, with the recipients that run the software 24/7 on their machines via DSL rake in 10%. The bots don't run on tournaments so that's where I play.

    In real life:
    * the house doesn't need to cheat. It's still a profitable business
    * in a poker club or a casino the other players rarely cheat. It's such security that justifies the house rake
    * in private games you have to watch for cheating. Eg thumbnail imprints on the back of cards, bent corners, etc.

    Phillip.

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