The Russ Hamilton Ultimate Bet Scandal4 years ago
As almost everyone would agree, should we ever find evidence of an all-powerful entity, it is unlikely that they will be playing online poker and taking $millions at the high-stakes games!
However, as I am constantly reminded when researching articles for PokerTube, just that very thing occurred back in poker’s mid-noughties heyday, when Russ Hamilton found himself with access to a ‘God-mode’ account and had his wicked way with the hard-earned dollars of many of the world’s best players.
For those who don’t know, or can’t recall the details of this massive scandal, here’s the story – and what a story it is! Incredible at times, utterly unbelievable, ugly as a poker tale can get, and it still has the ability to send powerful shockwaves through the poker community to this day.
In the Beginning…
Back in the summer of 2006, when poker was booming on the back of Chris Moneymaker’s shock victory at the WSOP, online poker sites were literally raking it in, and Ultimate Bet – who had been around since 2001 – were no exception.
Along with Absolute Poker (more of whom later) the Costa Rican-based Ultimate Bet received a licence from the Kahnawake Gaming Commission. In those glorious pre-regulation days, sites were supposedly verified as fair and honest by a motley assortment of Native American Indian, Caribbean and Central American-based gaming commissions, none of whom had affiliations withUS gaming commissions.
According to the ‘Washington Post’ investigation which followed the scandal we are about to delve into:
The Kahnawake alone license 450 sites run by 60 permit holders. By 2007, Internet gambling sites had revenue of $18.4 billion, up from $5.9 billion in 2003, according to Christiansen Capital Advisors, a New York firm that tracks online gambling.”
The Wild, Wild West…
It was the ‘Wild West’ version of poker , and nobody seemed to care as long as the gold-rush kept flowing. Until, that is, suspicions began to surface about some seriously unusual play on Ultimate Bet – play so suspiciously accurate that you might even think that certain ‘players’ could actually see their opponents hands and act accordingly.
Strangely enough, one of the other sites – Absolute Poker – had just been hit by a huge cheating allegation, where some of the site’s best players were repeatedly beaten and ridiculed by an online account going under the name of ‘Potripper’.
Poker’s Amateur Agatha Christies
Enter stage left some of internet poker’s most pro-active sleuths, including many of the 2+2 forum’s finest. Unhappy about the answers to their initial requests for investigation of several dubious ‘winning’ players and their techniques, they started their own investigations –using hand histories which were rather foolishly distributed to one of the complaining players. These included ALL of the hole cards of every player involved in the poker sessions under debate.
This allowed the amateur sleuths to initially decrypt the play of ‘ Potripper’, showing that his play could only have been the result of using a ‘super-user’ account, one in which the cheat has a a ‘God-mode’ ability to see everyone’s cards!
Despite denials and a variety of answers from the small Kahnawake investigation team at their ‘gaming commission’, it was eventually agreed that somebody had indeed installed a ‘back-door’ in the software, and was ruthlessly exploiting it to steal the money of largely unsuspecting players.
This ‘somebody’ was generally believed to be Scott Tom, one of the founders of the site, and although he has allegedly confessed his part in the affair, no charges have ever been brought against him.
Again according to the Post’s version of the story:
Unbeknown to the players, Absolute Poker had already cut a secret deal with the cheater, whom it characterized as a consultant with managerial responsibilities. Of course we considered going to the police, but we decided that it was in the best interest of our cheated players and of AP to get the perpetrator to tell us how the cheating was done," company officials wrote in response to questions from The Post. "We also recognized that prosecutions for white collar crimes in Costa Rica can be time-consuming and sometimes unsuccessful."
The Kahnawake Gaming Commission fined Absolute Poker $500,000 but refused to revoke its licence, and the company itself repaid over $1.6million to players affected by the cheating, but a sour taste was left…a taste which would very (very) quickly intensify on the tongues of poker players over at Ultimate Bet.
The Ultimate Mirror Image? NioNio!
The day after the Kahnawake Gaming Commission’s report was released onJanuary 11th 2008, new allegations surfaced about strange goings-on at Ultimate Bet, where a player by the name of ‘NioNio’ was taking huge sums of money from some extremely good players – and making them look like novices in the process.
The first big name to lose to NioNio was David Paredes, who in July 2007 “lost $70,000 to NioNio in a series of games. NioNio had played recklessly, Paredes recalled, making one improbable bet after another, yet winning most hands,” wrote the Washington Post.
Although initially not suspecting cheating (the Absolute version of poker’s biggest scandal was not to break for another month) Paredes discussed the session’s hands with someone else who had lost badly to ‘NioNio’. The results of the analysis which they undertook were staggering – NioNio had won with a statistical probability equal to winning several Lottery jackpots in a row!
They uncovered another seven suspicious accounts, totalling over $1.5 million in suspicious winnings – and the subsequent investigations laid 88 separate screen-names at the door of the cheaters. In actual fact, the most recent figures, as of 2013’s revelations (again later in this account!) claim that in total “approximately 23 accounts and 117 user-names were established and linked to cheating”, according to wickedchopspoker.
All accounts used to hide the fact that yet another ‘God-mode super-user was at large. But who could it be?
Russ Hamilton in the Hot Seat
Despite winning the 1994 WSOP first prize of $1million, the coveted bracelet and his own body-weight in silver , it turns out that a lot is never enough for some people – and Hamilton has forever taken up the unenviable status of poker’s main symbol of greed, opportunism and the ultimate in disrespect.
Ultimate Bet, the sister site of Absolute Poker – both of whom had been bought over by Tokwiro Enterprises - quickly confirmed "abnormally high winning statistics for the suspect accounts." Quickly in this case was actually quite a while after initial suspicions were aroused, but rather less tardy than the ‘Absolute’ investigation.
However, the sheer scale of the Ultimate Bet scandal – and Hamilton’s involvement – dwarfed anything seen before or since in the poker world. Again with the help of amateur poker detectives and the timely and fortunate addition of a whistle-blower who leaked a screenshot of the UB management system, it was soon determined that Russ Hamilton stood as the central figure in the whole debacle.
Despite Hamilton denying the accusations, or rather his lawyer David Chesnoff denying them on his behalf - "Have I heard these allegations? Yes," he said. "We deny them." He added: "Without having an opportunity to review what is alleged to exist, we can't answer the questions and don't think we should dignify it with answers," wrote the Washington Post, whose investigation along with ‘60 Minutes’ was pivotal in bringing many of the accusations and findings into the public domain.
By September, the Kahnawake Gaming Commission had announced their findings of "clear and convincing evidence" naming Russ Hamilton as “the main person responsible for and benefiting from the multiple cheating incidents" at UltimateBet. Recriminations and statement after statement followed from both the site’s owners Tokwiro and the Kahnawake Commission, but again a fine was the ultimate decision of those in power.
Any advance on $6.1million?
Having started refunding players to the tune of $6.1 million in May of 2008 , the investigation findings boosted the amount cheated by Hamilton and anyone he may have been working alongside to a massive $22million!
A somewhat paltry fine of $1.5million was levied on the Ultimate Bet site, and a recommendation that its licence be revoked was once again kiboshed by the head honchos at the Kahnawake Gaming Commission.
Not even close! The scandal would emerge and re-emerge over subsequent years, with many of the poker world’s biggest names embroiled in the fall-out from this momentous poker snafu.
Mike ‘The Mouth’ Matusow was one of the hardest hit by the actual online ‘God-mode’ cheating itself. Matusow recalled how Hamilton would entice high-stakes players into UB’s nosebleed games, the biggest games in town at that time.
This man (Russ Hamilton) would call me to play him head-up. I would ship $50,000, $50,000, $50,000,” Mike the Mouth divulged to the HardcorePokerShow early in 2009. “ All the money I won when I won the ‘05 World Series Main Event, when I got to the final table and when I won the Tournament of Champions, I gave all to Russ to put on UB while he was playing me heads-up and stealing it from me… The two people that got beat the most were Prahlad Friedman and myself… What [Russ] did to him was just brutal.”
Friedman’s account is just as horrific from a poker player’s perspective. Friedman spoke to Gary Wise of ESPN.com shortly after the affair blew up.
I remember days where I’d be up $50,000 and then I’d play some random guy and he’d kill me. I’d just play and play and play and not quit a guy. I never did that. I would give them 10 buy-ins because I had so much confidence and felt I could adapt to the way they were playing. Occasionally I’d win a huge pot on a hero call. That was tough for me. I was doing so well, was on top of the world and then hit that rough patch. I figured it was variance. Variance happens.”
Friedman explained how the losses hit him hard, not only financially:
After losing so much, it took a while to get my confidence back. I had a style that fit me really well.”
Persuading players to play - and even offering to front them the money to play with - then cheating them out of it so heartlessly, seemed to be the main modus operandi of Hamilton during the years 2003 to 2007.
Tarnished by association…
The knock-on effect of the Ultimate Bet scandal didn’t only cause problems for players whose bankrolls were effectively wiped out during actual play.
During those glory years of online poker, sites were literally throwing money at the biggest names in the game to endorse, promote, play and generally ‘big-up’ the sites in order to draw in the new millions who were desperate to take their slice of the poker pie.
Phil Hellmuthand Annie Duke, two of the biggest faces back in the day, were recruited by Hamilton to promote Ultimate Bet. Both became mired in the controversy which surrounded UB, with both players continuing in their roles for the site, despite many calls for such high-profile players to distance themselves from the wrong-doings.
As Lee Davy writing for CalvinAyre.com succinctly put it in 2013, when audiotapes were released basically confirming Hamilton’s dastardly deeds:
The main bone of contention that the poker population is once again chewing on – thanks to Travis Makar, the former Tech Assistant of Russ Hamilton, and the man who released the tapes to the general public – is that Annie Duke must have known that something was untoward during her affiliation with both UB and Absolute Poker (AP) and did not step down and distance herself from the company.
That decision now sees her carry a completely different label than the one she would have had pinned to her chest had she just stepped down.”
It was me…!
The release of the tapes, some five years after the initial furore, led to a re-opening of events, and Russ Hamilton can be heard admitting to his huge part in the scandalous scheme.
The tapes, still available online, feature Hamilton – along with UB founder Greg Pierson and UB attorneys Daniel Friedberg and Sanford Millar – discussing ways to minimise the damage caused to the site, and discussing ways to limit the actual payback to those affected.
I did take this money and I’m not trying to make it right, so let’s get that out of the way.”
As stark an admission of guilt as you will ever hear from a poker player or anyone else for that matter, but the gravity of his crimes still seem not to have changed his heart, as he also discusses ways to use ‘payback’ money instead to continue promoting the UB site.
The beginning of the end…
It is impossible to do justice to this massive poker disaster in such a ‘brief’ article, as the details and recriminations and investigations were such a massive undertaking for everyone who was involved over the course of many years.
A host of poker players, journalists and officials had been heavily involved over the period, and the plot has taken so many turns and twists that it’s difficult to know who did what exactly when without massive attention to detail.
The likes of Haley Hintze, wickedchopspoker, Lee Davy and CalvinAyre plus a host of others too numerous to mention (my apologies!) should be checked out if you want the nitty-gritty low-down on everything which transpired.
Suffice to say, the Ultimate Bet (and Absolute Poker) super-user scandals have set an unenviably low benchmark in poker history, affecting thousands and thousands of poker aficionados at every level, and the reverberations are still being felt today.
The End…? Part 2
Black Friday, which every poker buff knows hit the community like a ton of bricks falling from a high bridge, was the ultimate nail in the coffin for those still hopeful of some sort of recompense from, and reprisals against, Ultimate Bet (or Absolute Poker for that matter).
When the US Marshall’s office seized and subsequently liquidated the assets of Blanca Gaming Inc. (UB and AP-owning Cereus Poker Network’s new owners) – with no prospect of any funds being used to continue reparations to affected players – the story seemed to have reached a fittingly unsatisfactory end.
Last year’s WSOP, however, featured a ‘gone but not forgotten’ moment when Jim Collopy proudly sported an Ultimate Bet baseball cap, even when he was seated with Phil Hellmuth!
As pokerlistings reported last summer, the pro stated of his attire:
"I could say quite proudly that I stand up for the players,” said Collopy. “I think we've forgotten about a lot of the victims of Black Friday,” and although others were affected more by the scandal, Collopy himself took a massive hit.
It's certainly more money than I would ever want to part with,” Collopy said. “I could use that money right now. Let's just leave it at that.”
Pokerlistings also carry a rather sad-but-not unexpected end to the whole sorry mess.
In their final press release about Blanca Gaming, the Kahnawake Gaming Commission stated that “if there are Blanca assets remaining after the resolution of the claims by other parties, it is anticipated that the court will provide a process for players to make claims against those assets. It’s been nearly three years since that press release and there haven’t been any updates.”
The final financial toll of the scandal, including the Black Friday slap-in-the-face may never be known, but think of the biggest number you can and then multiply it several times and you’ll get an Ultimate ball-park figure, if not an Absolute one.
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