UltimateBet Parent Co. in Second Cheating Scanda

UltimateBet has revealed that an individual or individuals who formerly worked for the site were able to cheat players for a period spanning 21 months.

This admission is the second in less than a year that parent company Tokwiro Enterprises ENRG has had to make. Another of its properties, AbsolutePoker.com, revealed a similar security breach last fall.

Tokwiro, owned by Joseph T. Norton, the former grand chief of the Mohawk Council of Kahnawake, said the perpetrators were employed by UltimateBet prior to its purchase by Tokwiro in October 2006.

According to a prepared statement from Tokwiro Thursday, the perpetrators obtained opponents' hole card information by manipulating software code that was part of a legacy auditing system, and were active players on the network from March 2006 to December 2007.

The company has not revealed how much money the cheaters won, but evidence indicates it could be millions of dollars. In January UltimateBet was alerted to suspicious behavior by the user name, NioNio.

Investigation has confirmed that NioNio was only one of 18 user names involved in the scheme. An analysis of NioNio's play on online forum TwoPlusTwo.com suggests that he won more than $600,000 over four months.

"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 company said.

The company also said it is "pursuing its legal options in this regard." It has not disclosed the names of any individuals involved in the scandal.

UltimateBet, like its sister site, AbsolutePoker, is licensed and regulated by the Kahnawake Gaming Commission. The commission fined Tokwiro $500,000 in January as a result of last fall's security breach at AbsolutePoker.

In the Absolute case, it was "a trusted consultant" of the company that had manipulated software to view opponents' hole cards. The company ended up paying $1.6 million to customers who were affected by the breach.

The gaming commission determined that AbsolutePoker committed four violations related to client provider authorization. In addition to the fine, AbsolutePoker became subject to random audits for two years and was ordered to implement a compliance program.

Neither the name of the trusted consultant nor any legal action against him or her has ever been disclosed.

Mr. Norton, who was grand chief of Kahnawake from 1980 until 2004, was a founder and former chief executive of the Mohawk Internet Technologies hosting facility.

The gaming commission has not issued a prepared statement regarding UltimateBet's security breach.

On Saturday, Murray Marshall, legal counsel to the gaming commission, told Canada's National Post that Kahnawake's regulation is among "the tightest in the world."

"We would obviously prefer to prevent all possibilities of this kind of thing happening, but no system is infallible," he said.