"Back Door" Cheating Scandal Rocks Online Poker 427
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.
Re:Use the Front Door! (Score:5, Informative)
All that said, I have no idea whether or not the online casinos are really successful at preventing outside collusion.
superuser (Score:5, Informative)
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]
Re:superuser (Score:3, Informative)
another link, better link for more 2+2 information:
http://forumserver.twoplustwo.com/29/news-views-gossip/ub-scandal-sticky-251207/ [twoplustwo.com]
(found through the msnbc page)
Re:Why do people place such a sucker bet anyway? (Score:3, Informative)
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 a game of skill.
I do however agree with the need for regulation. I've been following this particular case from the beginning and the scary part is that nothing would have been uncovered if it weren't for the diligence of the players, who discovered the anomalies in several player's statistics, dug deeper and deeper to find the facts, and then pressed and pressed these companies to hold them accountable. Russ Hamilton, the cheater behind the scenes is a former World Series of Poker winner who was one of the founders of Ultimate Bet and seems to have set this whole scheme up from the beginning.
Re:*mucks his hand* (Score:3, Informative)
So, is this a matter of the "poor players" who deserve better, even though they don't really deserve anything better than to lose all their money, which they did?
The players chose to throw their money away, while the business shouldn't exist in the first place.
I think you've confused poker with roulette. Someone who is much better at poker than the people he's playing with will come out ahead in the long term, assuming that nobody's cheating. If everyone at the table is equally good/bad, the house rake will slowly drain their $$, but hopefully they all have a good time and possibly improve their game. Again, assuming that nobody's cheating - In that case their $$ will be quickly drained and the game will probably be frustrating to all involved.
Poker, although it involves some element of chance, is a game of skill - Much different than roulette/craps/slots/etc. What's with the poker-hate?
Re:No James deGriz (Score:3, Informative)
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.
Re:There are good cryptographic solutions (Score:5, Informative)
Indeed there are. I wrote a book on this:
Policing Online Games
It's far from the last word.
For more information:
http://www.wayner.org/books/pog/ [wayner.org]
To look up on Amazon:
http://www.amazon.com/exec/obidos/ASIN/0967584426/myhomepage0bc [amazon.com]
Re:'insider knowledge' (Score:3, Informative)
The same reason wallhacking [wikipedia.org] worked in FPSs: Game logic offloads opaque-object obscuration to graphics drivers and hardware.
That said, was there a 3-d online poker game which would be susceptible to wallhacking? Sounds pretty hypothetical to me.
Re:This is why (Score:1, Informative)
You're speaking nonsense. The value of a stock goes up because the company gets bigger and better, not because more suckers were found to pay in to the ponzy scheme.
Re:This is why (Score:3, Informative)
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)
Re:This is why (Score:4, Informative)
Re:This is why (Score:5, Informative)
There are all kinds of clever economic theories, but ultimately, there are only so many goods produced and useful services provided in the world, no matter how much money gets printed to pay for them, and the efficiency of production and service provision only increases so fast over time.
This is true. However, the increase in effeciency due to technological advancement *is* the huge driver that makes investment work. That growth is significant over time (measured in inflation-adjuested money, as that's what's interesting). European economies have grown a solid 2% a year post-WWII. The American economy has grown a terriffic 4% a year. And a bit less than that 4% gets paid to bondholders, and a bit more to (common) stockholders, so the stock market is far from a zero-sum game.
Even so, this makes it all too clear that stock market investing really is a long-term prospect: even something like a five-year plan, which is what a lot of the pros used to quote as a sensible minimum investment period, has brought little safety at all in the past 10-15 years. And how many people really have enough money that they can invest for 10+ years without wanting to spend any of it, yet still have little enough money that the return on investment matters?
Yes, it's the 30-40 year time horizon that matters. Everyone can invest on that scale: just live below your means, not above them. Accumulate wealth, not debt. It's as easy (as hard) as having a little self-discipline. If you need your money back in 5 years, it should really be in (short term, non-corporate) bonds. Shorter than that and you want to stick to FDIC-insured accounts and treasuries.
Investing so that you can retire comfortably at 55 instead of starving on social security at 65 is "just" a matter of saving a significant percentage of your take-home pay every month, to an account that you won't draw from even if your 'fridge breaks and your car's in the shop, and you get laid off. That means you have to save even more to give yourself that padding. All of which is easy (for a salaried professional) if you stop trying to impress your friends and neighbors with your purchases, realize you dont need the latest tech toys, and even (gasp) realize that maybe you should be renting, not buying a house, during the collapse of the biggest housing bubble ever.
Check out this post... (Score:2, Informative)
From *before* the Absolute Poker or Ultimate Bet scandal broke. By far the simplest explanation here is that Mark Seif (Poker pro, also site spokesman and part owner) was at least playing around with "superuser" capability.
By the way I followed this thing since it's inception at 2+2. Absolutely riveting story and investigation job. We're all just hoping it doesn't kill online poker.
http://www.internettexasholdem.com/poker-forum/at-absolute-pokeri-cant-believe-how-low-this-was-vt34808.html [internettexasholdem.com]
"Play then started again......and I saw something that I never have before in all my on-line poker play: obvious manipulation. Every hand was a complete dissection based on whatever Mike was holding (third pair was capped by Seif if Mike was behind or bluffing, for example.) About 10 or 12 k was basically stolen in 15 minutes (over maybe 100 hands), and here's the kicker: he was so pissed and beyond rational thinking that he actually wanted Mike to know what was going on! For example, Mike had K9 on one hand and flopped a boat. Seif was first to act after the flop, and FOLDED OUT OF TURN just that time."
That just doesn't happen in poker. That you flop a full house and a tough aggressive opponent open-folds.
Re:*mucks his hand* (Score:4, Informative)
Re:This is why (Score:3, Informative)
Re:This is why (Score:3, Informative)
You may want to learn more about the concept called Secondary Market Offering [wikipedia.org].