"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.
Why do people place such a sucker bet anyway? (Score:5, Insightful)
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.
Re:This is why (Score:5, Insightful)
Whee.
Re:as i've said before (Score:3, Insightful)
No James deGriz (Score:4, Insightful)
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:This is why (Score:4, Insightful)
You kid, but the stock market is actually worse than gambling. At least when you gamble you know what your odds are.
Strict client/server separation was missing (Score:5, Insightful)
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]
Re:'insider knowledge' (Score:3, Insightful)
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.
Re:'insider knowledge' (Score:4, Insightful)
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?
Re:'insider knowledge' (Score:5, Insightful)
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:*mucks his hand* (Score:5, Insightful)
Re:Why do people place such a sucker bet anyway? (Score:5, Insightful)
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:No James deGriz (Score:3, Insightful)
There are good cryptographic solutions (Score:3, Insightful)
Re:Use the Front Door! (Score:5, Insightful)
Gambling is a tax on stupidity (Score:2, Insightful)
As my Dad often said, go into a bookie's and you'll see five windows for paying them but only one window for paying out.
Re:Why do people place such a sucker bet anyway? (Score:4, Insightful)
I don't understand. You answer your own question. The people who make money at it do guarantee that they play against people who are worse than them (on average), by virtue of becoming and staying good at the game.
Of course an average player can't make money at it. (Unless they have a skill for finding tables filled with really crappy players, anyway.) That's why it's not the average players who do it for a living.
Obviously the people who fall into categories 1 and 3 must put in more money than the people who fall into category 2 take out, but that no more disproves the existence of category 2 than the fact that customers put more money into a store than the workers take out disproves the existence of the workers.
Re:*mucks his hand* (Score:3, Insightful)
So why should the poker business not exist?
Online poker for real money shouldn't exist because its virtually impossible to ensure systematic cheating isn't taking place.
Re:Why do people place such a sucker bet anyway? (Score:3, Insightful)
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:This is why (Score:5, Insightful)
Don't buy individual stocks
The economy is not a zero sum game
Yes it is, but as long as in the long term production is higher in the future than it is now, your (sufficiently diversified) investment will grant returns.
Re:*mucks his hand* (Score:4, Insightful)
I might lose 25 dollars a month playing poker for 10 hours of entertainment, because I'm not that good, but still I only play 5 dollar games that aren't winner-takes all. My neighbour rents 5 movies a month for 10 hours of entertainment, spending 25 dollars. He's the good guy and I'm the bad guy why exactly?
Re:How casinos make money (Score:2, Insightful)
It may all be true but it's not like poker works. As many pointed out, in poker you play against the other players, not the house. The house has a fixed rake which is actually pretty low in online games.
I don't consider myself a pro player and i don't intend to make a fortune playing online poker but in the last 4 months i have been playing my $50 investment turned into $200. I can't make a living with that but it sure beats playing WoW and losing $15 per month.
The trick is to never overplay your bankroll. I didn't make $150 with one lucky gamble on a $50 game. I made it by playing about 300 games. I lost some, sometimes 2 weeks in a row but in the long run good play will net you money.
Never play money that what you can't afford to lose. It's as simple as that.
Re:This is why (Score:2, Insightful)
Unless you have some system to guarantee that your opponents will lose...
Umm yeah, it's called being a more skillful player. The variance in skill level of poker players is easily large enough for a significant percentage of them to win enough to overcome the house's cut. Of course the house is always the biggest winner, and the average player will be a loser, but it's naive to say that only the house wins.
Re:*mucks his hand* (Score:5, Insightful)
Actually the morality police is what brought us here. If online gaming was regulated to be fair and run by legit casinos who had a legal liability to create a fair and secure playing field this would be unlikely to happen and if it did there would be legal recourse. Since the morality police can't bring themselves to do that people play without the safety of regulation and a legal system and when companies harm their players through negligence our outright fraud the players are just screwed.
Half of these posts (Score:5, Insightful)
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.
Re:This is why (Score:5, Insightful)
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"
I love proverbs... (Score:2, Insightful)
A fool and his money are soon parted... give that fool a computer and his money will part with greater efficiency and speed.
Re:Use the Front Door! (Score:5, Insightful)
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.
Re:This is why (Score:1, Insightful)
This is not true. Companies make money, or at least hopefully the ones you are buying are. This increases the value of the company, so people would like to buy an ownership stake in a company so that they will either receive dividends or the value of the company, and hence their shares, will increase.
Shareholders are not on the line for a company's debts- shares can not go below zero dollars. I don't think you have a firm grasp on what the stock market's function is, I suggest for your own good that you learn- it is not a casino, it is a way for a company to raise capital. I recommend "A Random Walk Down Wall Street" which explains the purpose and function of the stock market very clearly.
Re:*mucks his hand* (Score:5, Insightful)
Have you ever played poker? With the right people, poker is fun. A movie costs 10$ and lasts 1.5 hours, and may or may not be fun. I can play a 5$ poker game with friends that lasts twice that long, is more entertaining than most movies and that allows for actual interaction between people, rather than staring at a screen. I could blow 50$ or more at the bar, or I could play poker all night for 20$ and not wake up smelling of smoke and beer.
Playing poker because you think it will make you rich is probably retarded, playing at a casino is certainly reckless if you aren't an elite player, but playing poker doesn't in and of itself indicate naivety or stupidity. It's just a different form of entertainment and is reasonably priced as long as you're reasonable about it.
Re:This is why (Score:3, Insightful)
You make the same mistake that many do: the stock market is not about growth. Long-term, the value in the stock market comes from dividends paid, not growth. Else, the stock market would simply be a game of hot potato where the last person holding the stock loses.
Tech stocks often don't give dividends while they're in the growth phase, as the price is expected to increase and the profits that would otherwise be dividends are needed for funding company growth. However, these stocks must eventually produce dividends, else they have no real value.
Personally, I'm still waiting for Cisco to admit to itself it's no longer a growth-based tech company and to start paying dividends.
Re:*mucks his hand* (Score:2, Insightful)
Dude, seriously, have you ever even heard of poker? You don't seem to know much about the game.
Re:*mucks his hand* (Score:5, Insightful)
Yes, except those legal casinos with their legal liability are the same ones who will tell you "you are no longer welcome here", if you start winning too much, or card counting, or employing some other system to bend the odds in your favour.
Online casinos can't scrutinize the players in the same way, and can barely tell the difference between a real player and a bot.
I'm not saying what they did was in any way correct, but please don't compare them with the "fair, unbiased people of Las Vegas" - they both want to bleed you dry as quickly as possible.
Re:*mucks his hand* (Score:5, Insightful)
This is false. It can take awhile to catch it (as is seen in the AP/UB story),...
So is it safe to play now? That's the question that needs answering. Or is there another scam going that hasn't been caught yet. You don't know.
but statistical analysis will always show if weird things are happening.
Eventually. But what good is that?
People who play seriously online use tools like Poker Tracker, Hold'em Manager, Poker Office, etc to keep track of their own play, wins/losses and whatnot.
Someone noticed something odd about the win rate of a few players. They mentioned it to someone else; who looked and found the same thing. It kept going until the evidence was so great that it couldn't be a statistical anomaly.
And 4 years later they got caught.
"A few players" should have retired their accounts, and spun up new ones every now and then.
Or after 3 years, should have just plain retired and taken their millions to another country. How sure are you this didn't happen too with other teams? Or isn't happening right now?
The real difficulty is in getting sites to admit when something shady has been going on. AP and UB denied that anything had happened for ages. Until the bad press started showing up and it became too much for them to ignore.
So not only does it take YEARS to unmask systematic cheating, but the online houses aren't cooperating to solve the issue faster. That doesn't exactly install confidence...
As I originally said, there is no way to reliably ensure cheating isn't taking place. Sure if it is taking place, one day, we'll know about it, maybe. But the smart criminals will have moved on before then... and meanwhile the new criminals will still be under the statistical radar.
Re:*mucks his hand* (Score:5, Insightful)
That's only true when you're playing games that compete against the house.
"Counting cards" occurs in Blackjack. In Blackjack, if you win, the house loses.
That's not the case in Poker - in Poker the house wins whether you win or lose. They really don't give a darn.
Re:*mucks his hand* (Score:5, Insightful)
Online poker for real money shouldn't exist because its virtually impossible to ensure systematic cheating isn't taking place.
So what? Then people don't have to play it. Why limit what consenting adults want to do in their free time?
Hell, let's just ban the internet, since it's "virtually impossible" to keep it from being used to steal music and distribute kiddy porn.
Re:*mucks his hand* (Score:3, Insightful)
It was never "safe" to gamble online. That's the whole point.
Gambling online is not unlike shooting heroin with dirty needles. You'll get high, but eventually something bad is going to happen.
Re:This is why (Score:3, Insightful)
what of it?
Are you predicting the end of economic growth? If so we've got more serious problems to worry about than the Dow.
If if and when we run against a boundary condition it's not going to matter whether you've invested in gold, stocks, or stuffed your mattress with cash.
Re:*mucks his hand* (Score:3, Insightful)
Why limit what consenting adults want to do in their free time?
Really? Did anyone consent to be cheated?
Hell, let's just ban the internet, since it's "virtually impossible" to keep it from being used to steal music and distribute kiddy porn.
False analogy and you know it.
Re:*mucks his hand* (Score:5, Insightful)
Re:'insider knowledge' (Score:2, Insightful)
Re:This is why (Score:3, Insightful)
Anything is a gamble.
Putting the money in your mattress guarantees you'll lose value at the rate of inflation. (several percent a year, over 40 years you'd be lucky to have a third of the value kept...
Buying GOLD for the money risks that goldprices fall, or don't keep up with inflation.
Putting them in the BANK risks that the bank goes bankrupt (assuming you've got more cash than the guarantees cover), or that inflation and taxes will eat any gains. Or that the dollar falls so your value is reduced.
So yes. Buying stock is a gamble. If the economy as a whole is weaker in 40 years than it is today, then it's likely you'll get less value out 40 years from now than you put in today. True.
The economy has been growing steadily for the last few hundred years though. There's been setbacks, true. But none lasting even close to 40 years. 5 Years ? Hell yes. 10 ? Perhaps on a very few occasions, but extremely rare. 40 ? Not once.
Past performance is no guarantee for future performance, true. But it's as good a guess as you're going to get.
Also, you're forgetting about dividends. I've got stock that I've owned for a decade that are worth the same today as they where when I bougth them. And that still has been more profitable than bank over the same period.
Re:This is why (Score:3, Insightful)
Thinking "I'll put my money in the stock market now then in five years, I'll cash it out" is plain wrong. Gradually you need to move away from stocks into bonds.
I'm not going to get into financial advice; I suspect that we would agree a lot, but this isn't really the forum for that discussion. Regardless, the way the tax system is set up in my country, and the advice that was routinely given by numerous financial advisers until quite recently, both encouraged people to take a stocks-and-shares view even for medium-term investments, and effectively imposed significant penalties on those looking for safer or alternative investment opportunities — or just keeping their money in a bank account, for that matter.
Re:This is why (Score:2, Insightful)