KGC issues statement on cheating controversy

Empire Casino, London

The Kahnawake Gaming Commission issued a statement on Wednesday in an effort to clear up the misperception that it hadn't done anything after the cheating scandals were discovered at two poker sites in its regulatory jurisdiction, UltimateBet and Absolute Poker.

"Over the past several months, it was discovered that individuals within two of the KGC's licensees - Absolute Poker and Ultimate Bet - had created and carried out a scheme to cheat players," said the KGC in a press release.

"In both cases, the improper conduct of these individuals was brought to the attention of the licensees, and the KGC, by affected players. The KGC acknowledges the diligence and sophistication displayed by these players and the role they played in bringing these matters to light."

The first case involved Absolute Poker. Players on the site noted some suspicious activity during a poker tournament and brought it to the attention of Absolute Poker. An investigation into the matter showed that someone had access to see all the hole cards at the tables, giving them an unfair advantage.

After a thorough investigation by the KGC and Gaming Associates, the organizations determined that the cheating that had occurred was not initiated by, nor did it benefit, Absolute Poker, its directors or its principal owners.

The KGC imposed a number of sanctions and conditions on the poker site, including 24 specific directions for changes to its management and systems. Absolute Poker also provided evidence showing that all the players affected by the cheating were fully reimbursed for their losses.

The problems at UltimateBet surfaced not long after the KGC had settled the matter at Absolute Poker. Players began to make similar cheating allegations against UltimateBet, which is a sister company to Absolute Poker.

"Over the past several months the KGC has been closely involved in an in-depth investigation of the UltimateBet cheating allegations," the commission said.

According to the KGC, significant efforts have been expended to identify and correct the flaws in UltimateBet's system that permitted the cheating to take place, identify the individuals who were responsible for the cheating and ensure that all affected players were fully reimbursed.

"Unfortunately, the KGC's actions were not well communicated to the poker industry or public at large, creating an incorrect perception that the KGC was 'doing nothing,'" the KGC said.

The UltimateBet investigation has yielded a number of key findings which the KGC says will enable it to issue its decision on the appropriate steps to be taken in the next several days.

"it should be stressed that the KGC's primary concern throughout both matters was to ensure that affected players were fully reimbursed and that corrective measures were implemented to prevent against any further incidents of cheating," the KGC said.

"Both of these objectives have been accomplished - as evidenced by the fact that the recent concerns that have been raised about the Absolute Poker and UltimateBet matters are not being driven by affected players."

The KGC has been regulating online gaming for more than nine years. During that time, the KGC claims it has proven to be a world leader with regulations and methodologies that have established a regulatory environment in which online gaming can be conducted fairly and securely.

The KGC said that given the length of time it has regulated this industry and the significant number of licensees under its control, its record has been exemplary.

"As commentators have correctly noted, even the most well regulated industries are not immune from abuse. Examples can be found in the banking, securities and land-based gaming industries," the KGC said.

"The fact that the online gaming industry is new and is technologically driven creates additional regulatory challenges. Throughout its history, the KGC has met these challenges and its regulations have been emulated in a number of other jurisdictions around the world."

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