After many months - UltimateBet finally issues a statement!

ULTIMATEBET ISSUES STATEMENT REGARDING UNFAIR PLAY

MONTREAL, CANADA (MAY 29, 2008) --- Tokwiro Enterprises ENRG ("Tokwiro"), proprietors of UltimateBet.com ("UltimateBet"), one of the world's largest online card rooms, today announced the results of its lengthy investigation into allegations of unfair play, which was triggered by concerns about an account named 'NioNio'. Tokwiro has worked diligently in cooperation with its regulatory body, the Kahnawake Gaming Commission ("KGC"), and with independent third-party experts to conduct a thorough investigation that included a comprehensive review of hand histories and game data, thorough analyses of software and network security, and audits of its security practices and procedures.

The investigation has concluded that certain player accounts did in fact have an unfair advantage, and that these accounts targeted the highest limit games on the site. The individuals responsible were found to have worked for the previous ownership of UltimateBet prior to the sale of the business to Tokwiro in October 2006. Tokwiro is taking full responsibility for this situation and will immediately begin refunding UltimateBet customers for any losses that were incurred as a result of unfair play.

The fraudulent activity was enabled by unauthorized software code that allowed the perpetrators to obtain hole card information during live play. The existence of this vulnerability was unknown to Tokwiro until February 2008 and existed prior to UltimateBet's acquisition by Tokwiro in October 2006. Our investigation has confirmed that the code was part of a legacy auditing system that was manipulated by the perpetrators. Gaming Associates, independent auditors hired by the KGC, have confirmed that the software code that provided the unfair advantage has been permanently removed.

Throughout the investigation of this incident, Tokwiro's consistent priorities have been:

1. To permanently remove the ability to engage in unfair play;
2. To complete its investigation and come to a full understanding of what occurred;
3. To refund the affected customers; and
4. To implement measures that prevents future incidents.

The Company said, "We would like to thank our customers for their patience, loyalty and support, as well as for their understanding that we are doing everything we can to correct this situation. The staff and management of UltimateBet are fully committed to providing a safe and secure environment for our players, and we want to assure customers of our unwavering resolve to monitor site security with every resource at our disposal."

Investigation Timeline

These are the key events in the course of the incident.

• January 2008: UltimateBet is alerted to suspicions of unfair play on the part of the account "NioNio". Within 24 hours, UltimateBet contacts the KGC to provide formal notice that UltimateBet has initiated an investigation of the incident. UltimateBet subsequently forwarded a copy of all related data to the KGC.
  
  
• January 2008: The "NioNio" account and related accounts are suspended pending further investigation.
  
  
• February 2008: Preliminary findings indicate abnormally high winning statistics for the suspect accounts. After discussions with the KGC, UltimateBet engages third-party gaming experts to assist with the analysis.
  
  
• February 2008: Investigators confirm that the suspect accounts are associated with individuals who had worked for UltimateBet under the previous ownership.
  
  
• February 2008: UltimateBet discovers the unauthorized code that allowed the perpetrators to obtain hole card information during live play. The code was part of a legacy auditing system that was manipulated by the perpetrators of the fraud.
  
  
• February 2008: UltimateBet immediately removes the unauthorized code and works with the KGC and with third-party auditors to verify that the security hole has been eliminated.
  
  
• March 2008: Six player accounts are confirmed to have participated in this scheme. No accounts were deleted at any point, although some account names were changed multiple times. The following account names are known to have been used in the fraudulent activity: NioNio, Sleepless, NoPaddles, nvtease, flatbroke33, ilike2win, UtakeIt2, FlipFlop2, erick456, WhackMe44, RockStarLA, stoned2nite, monizzle, FireNTexas, HeadKase01, LetsPatttty, NYMobser, and WhoWhereWhen.
  
  
• May 2008: The investigation confirms that the fraudulent activity took place from March 7, 2006 to December 3, 2007.
  
  
• May 2008: Gaming Associates certifies that the software code that enabled unfair play was removed from UltimateBet servers in February of 2008.
  
  
• May 2008: Customers affected by this incident are identified, and plans for corrective action are reviewed with the KGC.

Corrective Actions Taken

The following actions have been taken or are currently underway as a direct result of this investigation.

• The security hole identified in UltimateBet's investigation has been permanently eliminated.
  
  
• UltimateBet is establishing a state-of-the-art software Security Center that consolidates and greatly enhances existing security capabilities. The first release of the new Security Center focuses solely on the immediate detection of abnormal winnings. Gaming mathematicians, poker professionals, and security software developers have all contributed to the specifications for the new Security Center.
  
  
• UltimateBet customers are no longer permitted to change account names unless they have suffered abuse in chat rooms. Requests for changes must be supported by proof of abuse and must be approved by the Chief Compliance Officer.
  
  
• In addition to its existing security department, UltimateBet has established a new specialized Poker Security team of professionals dedicated to fraud prevention.
  
  
• The refund process will begin immediately. The accounts associated with fraudulent activity did not use an unfair advantage in all play sessions. Regardless, UltimateBet is refunding all losses to these accounts.
  
  
• Accounts related to the fraudulent activity have been disabled, and the individuals associated with those accounts permanently banned from the site.
  
  
• UltimateBet has worked closely and transparently with its governing body, the KGC and its designated expert auditors, to determine exactly what happened, how it happened, and who was involved, and has taken action to prevent any possibility of this situation recurring.
  
  
• Tokwiro is pursuing its legal options in regard to this incident.

For further inquiries please contract press@ultimatebet.com

UltimateBet confirms abnormal play...

This story has been ongoing since early January and up until now there has been very little "official" response from UB on the investigation. The following statement is quoted directly from GamingIntelligenceGroup.com.

Following complaints from players, UltimateBet has confirmed that it has found evidence of ‘abnormal’ playing activity at its online poker site.

UltimateBet and its licensing authority, the Kahnawake Gaming Commission (KGC), were alerted on January 12th to allegations that a player with the online handle “NioNio” exhibited abnormally high winning statistics, resulting in accusations that the player had an unfair advantage during play.

The allegations also included reports of suspicious activity concerning the deletion of the NioNio account and other accounts that may have been related to the cheating.

UltimateBet says it immediately called in an independent third-party expert to review “hundreds of thousands of hand histories, all of which were promptly locked down and made available to the expert”.

The company went on to say: “The initial findings of our third-party expert confirm that the NioNio account’s winning statistics were indeed abnormal, and we have expanded the investigation to look into whether an unfair advantage existed, how such a scheme might have been perpetrated, and whether additional accounts beyond those of NioNio were involved.

“The investigation has proven to be extremely complex and, therefore, has been more extensive and taken much longer than initially expected. We continue to aggressively pursue the matter and will communicate the findings of our full investigation to our regulatory authority and to our customer base as soon as practicable.”

UltimateBet is owned by Tokwiro Enterprises enrg. and headed by the former Grand Chief of the Mohawk Territory of Kahnawake, Jo Norton. The company also owns AbsolutePoker.

Earlier this year the KGC fined AbsolutePoker $500,000 following an investigation into similar cheating allegations. In that case, the perpetrator(s) were found to have used a ‘backdoor’ in the poker software which enabled them to view other players ‘hole cards’.

The fact that Tokwiro Enterprises is again at the centre of cheating allegations will come as a significant blow to the company as well as the Kahnawake Gaming Commission, who’s investigation of AbsolutePoker was labelled a whitewash due to its lack of detail and limited financial penalty.

If these latest allegations are substantiated, the KGC will have little option but to impose a significant enough penalty to deter such activity in the future and to maintain its authority as a credible licensing jurisdiction.

Courtesy: Gaming Intelligence Group

Ottawa is considering taking on the KGC with US style regulations

The Canadian federal government announced on Tuesday they’re considering new measures to stamp out internet gaming sites based on the Kahnewake reserve located near Montreal Quebec. This move will certainly spark a major conflict between the First Nations and Ottawa.

The government has long considered the nearly 400 poker and casino sites operating there to be illegal but has failed to act. Neither the federal or provincial governments have ever attempted to enforce the law against the Kahnewake Gaming Commission.

Minister of Justice, Rob Nicholson, has asked his officials to look into “whether the enforcement of the criminal code provisions could be assisted with other measures”. The measures could include restricting banks and credit cards from conducting transactions with illegal operators. Sounds like they’ve taken a page from the US government’s playbook...

Here’s the rub...
The Kahnewake Mohawks claim to be a sovereign nation so Canadian laws don’t apply to them. They cite section 35 of Canada’s Constitution which protects native culture. They claim that gaming is central to their culture as a means of settling disputes through competition instead of violence. Other Canadian native groups have announced plans to emulate the Kahnewake.

Great Canadian Gaming Corp, and others in the billion dollar horse racing industry say they pay $1 billion in taxes each year and carry huge expenses. They claim the gambling sites hosted within the MIT (Mohawk Internet Technologies) servers are parasites and poachers. The track owners want the government to force ISP’s to block the sites from Canadian access.

According to Chuck Barnett of MIT, Ottawa is a foreign government. He says Ottawa has no business regulating activity on Mohawk territory. “If I were a Canadian, I might instead be more interested in how explicit legislation could serve as the catalyst for a potential source of economic development, employment and revenue through taxation,” He said.

Michael Lipton, a Toronto lawyer specializing in gaming law agrees with Barnett. He stated that the horse racing industry has a monopoly on gambling in Canada. “I guess if I had a monopoly, I wouldn’t want anyone to compete against me either”, he said.

Lipton pointed to the current situation in the US. “They are completely bogged down on how to block the system”

Lipton acknowledged there have been some problems with fraud. He was referring to the Absolute Poker scandal. The Kahnewake Gaming Commission fined Absolute $500,000 in that case. He claimed that was the exception, most sites are transparent and credible.

Lipton proposes the government would be better off bringing the Kahnewake sites into the system and regulating them. He thinks regulation would help protect against money laundering and protect the public. It would also bring in tax revenues and provide Canada with a competitive edge within the gaming industry. “I think Ottawa should embrace this and recognize that people don’t want to be in a position where the government tells them what they can or can’t do in the peace of their own home,” he said.

One thing is for certain...
Whenever the Canadian government and the First Nations have gone to war over serious issues, blood has been shed. The Kahnewake won’t just roll over for Ottawa on this, there are hundreds of millions of dollars at stake.

I predict this will be a long and nasty fight.