"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.
Use the Front Door! (Score:4, Interesting)
'insider knowledge' (Score:5, Interesting)
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.
That's what you get in Kahnawake... (Score:5, Interesting)
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.
The real news is finding the hacker not the hack. (Score:3, Interesting)
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.
Re:Strict client/server separation was missing (Score:4, Interesting)
Isn't this a fairly standard design practice? How did this happen?
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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.
Re:'insider knowledge' (Score:3, Interesting)
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
Re:Use the Front Door! (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 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.
Of course being someone who has never once gambled online and thinking along those lines, it wouldn't surprise me to learn that they've got all kinds of ways to counter it.
Re:This is why (Score:5, Interesting)
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:2, Interesting)
Assuming, of course, that the companies you've invested in don't fold with a negative value. From that, there's no recovery.
Also, keep in mind that the stock market depends on an influx of fresh money from the bottom. It's a legalized pyramid scheme, where those who buy new stock infuse the market with the money that established investors can cash out. Once the supply of fresh money stops, the stock value can only rise artificially. So sooner or later a stock market has to crash. It may be in ten years, or in two hundred, but any system that's based on continued growth will collapse.
In short (no pun intended), your 10-40 year investment is still a gamble. You're just trading a large risk of losing some money for a smaller risk of losing a lot of money.
Re:That's what you get in Kahnawake... (Score:1, Interesting)
many american indian reservations are about the same. i know because i grew up on one.
Re:This is why (Score:5, Interesting)
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:*mucks his hand* (Score:4, Interesting)
This is false. It can take awhile to catch it (as is seen in the AP/UB story), but statistical analysis will always show if weird things are happening. 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.
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.
Re:This is why (Score:5, Interesting)
The economy is not a zero sum game
Perhaps not, but it's a lot closer than the markets sometimes seem to think. 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. As we've all been finding out rather painfully in recent weeks, economies that ignore this reality, based on funny money that is not backed by anything of any real value, are liable to collapse when someone knocks the bottom card out of the house.
For the first time ever, my investment portfolio has actually tipped over into an overall negative return recently. Several years of gains from investing in decent companies trading in useful markets with sound fundamentals, carefully avoiding madness like the dot-com bubble and the financial services industry that caused the current mess, have been wiped out in a matter of weeks. Sure, the market will recover in time, and if you're lucky enough to have a substantial sum of spare cash lying around to put in now then there are probably long-term bargains to be had. And sure, I know that objectively, given the various tax implications in my country, I am still better to be in my current position that I would have been if I had put the money in a bank and then bought in for the prices available now.
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? Maybe once you own the house and your kids are grown up, if you want to save for your retirement...?
Re:That's what you get in Kahnawake... (Score:1, Interesting)
Thank you for that insightful and objective account of life on the Kahnawake reservation. Are you really basing your scorn
At no point did I blame the Mohawks for their current predicament, as there is a long history that has resulted in the current situation. Being deprived of their land, liberty and economic opportunity by the government is the main reason for the sad state of most aboriginals.
for a population because they asserted that outside police do not have authority on their land?
The Mohawks claim that provincial and federal police have no authority on their land. The province & federal government claim otherwise. I think it would be better for all concerned if this was finalized one way or the other. Part of the problem is being in law enforcement limbo.
Like any community, some Mohawks commit crime. But the lack of an effective police force (the Mohawk peacekeepers don't qualify) means that the decent people (which are the vast majority) of Kahnawake suffer. And if the decent people turn to the provincial or federal police for help, they aren't likely to get any.
It's no wonder that it's near impossible to start a business on a reservation when anonymous cowards spread the word that everyone there is untrustworthy.
It certainly isn't all of them, but it is a large number of Kahnawake businesses. More importantly, you will be unable to turn to the courts & the conventional police if things go wrong.
Also note that this is just Kahnawake, and not all aboriginal reserves. Many aboriginal reserves are great places to do business - less tax, less regulation and a motivated workforce.
Re:'insider knowledge' (Score:2, Interesting)
Reading your post makes me angry. There's already enough misinformation about online poker. Why lie about cheating online? Do you want attention? If it's the second case then you have succeeded thanks to the ignorance of many slashdot members of what online poker is actually like. Cheating is NOT rife. It is possible to win consistently at poker. It's possible to make a good living from online poker and many people do.
Re:*mucks his hand* (Score:4, Interesting)
Cheating (Score:3, Interesting)
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.
Poker is not gambling (Score:1, Interesting)
Hey guys poker is not gambling, in the long term!
Just visit sharkscope.com and check the name livb112 at FullTilt!
Username Games Played Av. Profit Av. Stake Av. ROI Total Profit
livb112 23,560 $43 $840 5% $1,020,747
Re:*mucks his hand* (Score:3, Interesting)
Did anyone consent to be cheated?
They consented to play on using a format that cannot be secured. So the answer is "yes".
False analogy and you know it.
I don't know it, but thanks for setting me straight. Your incisive lack of explanation has shown me the light.
Re:*mucks his hand* (Score:3, Interesting)
They consented to play on using a format that cannot be secured. So the answer is "yes".
You seem to be using 'consented' in a rather absurd manner.
By that logic, if I get mugged on the way home today its because I consented to walk home along routes that I cannot ensure are secured.
Of course, I could elect not to walk, but then I apparently consent to get carjacked because I consent to drive along routes I cannot ensure are secured...
I'm sure they accept -some- risk that cheating is possible, but they certainly don't consent to be cheated, and I would further argue that most of them have absolutely no concept of the level of risk they are taking on, and that most of them would make different choices if they actually understood the risk.
Seriously, if you think playing online amounts to consent to be cheated, then its no wonder you you thought your analogy wasn't false. Hell, by that twisted logic I perhaps it wasn't.