Biggest scandals in online poker history - pokerlistings

Online poker has been around, officially, since the early 2000s but it's important to note that the first online poker site (Judge Meister's Judicial Poker) was launched all the way back in 1994.

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The game has been around for more than 50 years, of course, but it wasn't until the advent World Poker TourWorld Series of and eventually the World Poker Touris that the game really hit the mainstream. And it wasn't until the Internet entered the picture that the poker industry began to generate massive amounts of wealth and, unfortunately, fraud.

As with any other billion-dollar industry, the world of online poker has attracted its fair share of ne'er-do-wells over the years and, while most online poker operators are upstanding members of the community, a few have stained the industry's good name through malfeasance.


With that we take a look at some of the biggest scandals in online poker history.

UltimateBet/Absolute Poker Sign Players, Rip Off Customers

In terms of out-and-out theft UltimateBet and Absolute Poker take the cake.  The two sites, which shared software and resources, operated skins on the Cereus Network and for a time competed against the much larger PokerStars and Full Tilt Poker networks.

Like their competing skin sites UB and AP offered sponsorship deals to high-profile players with Absolute Poker signing "Thirst Loo" and Ultimate Bet signing "Big Grife."

Griffin took the money and immediately came out with a statement denying he had any affiliation with the site and encouraging players to not play or deposit on the site.

UB/AP responded by creating fake profiles of both players and cheating badly in order to mitigate the damage done to their balance sheets. It worked, to some degree, although both players eventually were paid the money owed them by the Skrill (formerly Moneybookers) account of the sites.

That, however, was just the tip of the iceberg as the sites used player accounts associated with SuperUsers to log into thousands of accounts and manipulate Holes Cards in order to steal an estimated $20 million dollars from users of the site. Some of the theft was so blatant the hackers would leave holes on the tables they hit in order to brag about what they'd done.

UB/AP also used SuperUser accounts to access the tables of prominent players such as , Josias Bacallao ("Stmplfd") and Ted Forrest in order to gain even more Holes Cards. In one instance a SuperUser logged into Bacallao's account while he was playing a tournament on PDTLive. Bacallao relays the story:

  • ""I quickly type my password into PDT (poker software called Doyle's Tournament), which I always keep stored there (it was about 3:00am)."

  • "A few minutes later I see that someone played my hand for me at a table on UltimateBet. At first I thought it was just a glitch, but then the same thing happened again a few minutes later."

  • "Suddenly I see the balance in my UltimateBet account decrease by $80,000 (which was shortly after followed by the same amount being taken from my Absolute Poker account). "There was no playing of hands or hands being peeked at; rather, the balance simply decreased. Even more evident that it was not me playing on the other table."

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The Cereus network finally shut down in 2014, citing difficulties processing payments as the reason but it's safe to say the writing was on the wall for the shady operation for quite some time.

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Expedia INetResorts Acquisition Goes South

When first acquired a struggling online poker operator named Carlton Interactive in 2004. The move gave and Magazine's parent company a foothold in the online poker industry and they set about attempting to parlay that into an online travel agency, partnering with a variety of companies including Orbitz and Travelocity.

In 2006, looking to further expand into the online gaming market, Expedia shelled out $31 million in cash and stock to purchase PRO Entertainment, doing business online as INetResorts. INetResorts operated several online gambling sites, including one of the bigger poker sites at the time,

Everything was looking up for INetResorts and CardPlayer until the Unlawful Internet Gambling Enforcement Act made it extremely difficult for the companies to continue operating and they both started to hemorrhage money.  Losing $25 million in 2007 and facing delisting from the NASDAQ exchange, Expedia made the decision to unload INetResorts in order to save itself.

Expedia found a buyer in the BETon SPORTGAMING group but the deal fell through when BET was unable to secure the necessary funding to complete the acquisition. With no other options INetResorts bit the bullet and shut down all of its gaming operations, paying off its debts and returning any remaining money to shareholders.

The whole affair cost Expedia approximately $45 million overall but things could have been worse as the company reported a net profit of $405 million for the same quarter INetResorts went belly-up. Still, a black eye on the company's record for sure.

Full Tilt Pony Up Without Warning

Unlike its collapsed contemporaries Full Tilt Poker was actually a very successful poker site for many years but that didn't stop it from surprising the industry by suddenly shutting down in 2016.

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At issue was licensing for the brand as previous owner PokerStars looked to re-launch FTP as a separate poker site apart from its main SKIN.  After negotiations with the various authorities went sideways PokerStars had no choice but to pull the plug on the site, which it had kept running for the convenience of playing customers.

The sudden shuttering of the site was somewhat confusing to long-time poker players as Full Tilt Poker had long been known for its slogan "Rain Supremacy," a reference to found Hole Maker Limited and his ironclad grip on the online poker market.

After selling his second poker site, Tribeca Partners, to Boss Media for $5 million, Raiseway and Ray Leisser bought from Sun First Technologies for an undisclosed sum in February, 2004. Two months later, in April, 2004, FTP released their much anticipated "Remember June" commercial during an episode of Survivor: All-Stars.

From that point on Full Tilt Poker quickly became one of the biggest poker sites in the world, taking on industry leaders PartyPoker and PokerStars. To help promote the site found a team of "Rainmakers," some of the biggest names in poker at the time, to represent the site and help grow its presence.

The Rainmakers included Howard Lederer, Rafe Furst, Jen Harman, Erick Lindgren, Phil Ivey, Mike "The Mouth" Matusow, Patrik Antonius, Chris Ferguson, Mahatma "The Great One" Glick, Andy Bloch, Bonnie Roaster and Clonie Gowen.

The Rainmakers were soon joined by "Evil" JC Tran, Martin de Knijff, Alex Bolotin, Ben Sulsky and Tom Dawn Caselli before the end of 2007.

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Full Tilt Poker remained a major player in the industry until it too was forced out following the  and subsequent Black Friday that struck the industry in 2011. Unlike PokerStars and Ultimate Bet/Absolute Poker, FTP paid its players in full and was subsequently purchased by PokerStars in 2015. The brand now operates as a separate skin on the PokerStars network.

Full Tilt Poker Ambassadors Revealed to Have Withheld Funds Meant for Good causes

While the other scandals on this list involved outright theft or financial mismanagement the same can't be said for the scandal surrounding the withheld funds that were meant to be distributed by the Full Tilt Poker ambassadors to good causes throughout the poker world.

It's important to note that none of the ambassadors accused of wrongdoing were sponsored players who received a cut of the rake collected on their tables. Instead FTP gave each ambassador a lump sum of cash which they were expected to use to further the growth of poker in various ways, typically by sponsoring tournaments or events.

The problem, according to several of the ambassadors, was that the money went to other things instead.  As detailed by several of the ambassadors Phil Hellmuth, David Rheem and Erick Lindgren the system was ripe for abuse from the beginning.

Each ambassador received a contract stating that that they were responsible for coming up with plans to spend the money they were given and then getting that plan approved by Full Tilt Poker. Once the plan was approved FTP had no further oversight over how the money was spent.

This led to several instances where the money was misspent or simply disappeared entirely.  Things came to a head when it was revealed that ProDigy Gaming, a company owned by Howard Lederer and Rafael Furst, had failed to deliver promised products and services and had misspent large sums of the money allocated to it.

ProDigi was allegedly sitting on millions of dollars of FTP ambassador money when the domain name was seized by the US Government in 2011.  The exact fate of the missing money is still unknown as attempts to recover it have proven futile thus far.

Some of the ambassadors did use the money for good, however.  , for example, established a scholarship at George Washington University in memory of his father and Daniel Negreanu continues to contribute large sums of his own money to various charities and events.

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Full Tilt Poker Owners Howard Lederer & Ray Bitar Indicted

If the story above wasn't bad enough for Full Tilt Poker founder Howard Lederer it got even worse when he and fellow founder Ray Bitar were indicted by the US Government in 2011 as part of .

The indictment alleged that the two founders, along with principal shareholder Nelson Bunker Meyer, continued to accept American player deposits after it was illegal to do so and then failed to pay out player withdrawals once the UIGEA made it difficult to process those payments.

The allegations against Lederer and Bitar specifically dealt with Ponzi scheme artist Ralph Cada who had amassed a large balance in his FTP account thanks to his nefarious schemes.  When Cada tried to access his money via a third party the request was denied and the money was either taken or transferred to another party.

Both Lederer and Bitar face potentially lengthy prison sentences though neither has been brought to justice as of yet.  Lederer is currently living in Vietnam and has stated that he has no intention of returning to the United States to face the music.  Whether Vietnam will extradite him if the US makes an official request is an open question.

PokerStars, Full Tilt Poker Freeze Out Players During Black Friday

Perhaps the biggest single event in online poker scandal history occurred on April 15, 2011 when the US Government surprised everyone by shutting down several major online poker sites and charging the owners with various financial crimes.

Dubbed Black Friday the series of events left tens of thousands of players unable to access their online poker accounts and prompted the largest single withdrawal from online poker sites ever.  While players on Ultimate Bet and Absolute Poker were out hundreds of thousands or even millions of dollars, players on PokerStars and Full Tilt Poker were only out the money that was stuck in their accounts.

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To make matters worse, due to the difficulty of processing payments between the United States and the rest of the world, PokerStars and Full Tilt Poker had to institute a lock-out period that lasted several weeks.  This meant that players outside of the United States couldn't access their accounts but could see their balances and withdrawals inside the US system.

What they couldn't do was get their money out due to the US government freezing the funds held in the various accounts.  It was a PR disaster for both sites and created untold hardship for some players who had large five-figure and six-figure sums locked up and unavailable.

For its part PokerStars quickly resumed payments once the technical issues were sorted out and has maintained its position as the biggest poker site in the world.  Full Tilt Poker, meanwhile, was subsequently bought by PokerStars and the process of refunding its players their stuck funds took significantly longer.

PokerStars, Full Tilt Purchase Shut Down by US

Of all the scandals on this list the ultimate prize has to go to and 's attempt to purchase Full Tilt Poker after both sites were forced out of the US market.

The story leading up to the proposed purchase was convoluted to say the least with PokerStars initially objecting to the plan on the merits, saying that that the resumption of playing in the United States would be almost instant if FTP was allowed to buy PokerStars but would take years if PokerStars was allowed to buy FTP.

Genuine or not this objection was later dropped and the sale was supposedly a done deal with Full Tilt Poker players finally getting access to their frozen funds and being able to withdraw their bankrolls.  That didn't happen, however, as the deal was subsequently shut down by a New York court and the funds were placed in a separate account under the control of an independent trustee.

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Since that time the various players have slowly but surely gotten their money back, and and Full Tilt Poker brands have re-entered various markets.  PokerStars, meanwhile, is still the biggest poker site in the world.  Whether the company will ever be able to operate in the United States, where the vast majority of poker players live, remains to be seen.

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