Kahnawake Gaming Commission Speaks about AP & UB

KGC Claims Decision Regarding UltimateBet is Forthcoming

by , Jul 24, 2008 | 12:51 pm

It seems that the regulatory commission that oversees the gaming licenses of UltimateBet and Absolute Poker has deemed it necessary to issue a statement amidst repeated pleas from the poker public for some transparency. According to the statement, reprinted in full below, the Kahnawake Gaming Commission gives kudos to the players who spurred this investigation and notes that it will release a decision on the matter within the coming days.

Our ears are perked, KGC.

Mohawk Territory of Kahnawá:ke
July 23, 2008

Kahnawá:ke Gaming Commission (the “KGC”) has been continuously regulating online gaming for over 9 years – longer than most, if not all, other jurisdictions. During that period of time, the KGC 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’s success as a regulator is evidenced by the fact that a significant percentage of the online gaming industry has chosen to locate and operate within Kahnawá:ke. Given the length of time that it has regulated this new industry and the significant number of licensees under its control, the KGC’s 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 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.

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. 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. After a thorough investigation carried out by the KGC and its agents, Gaming Associates, the KGC rendered its decision in this matter on January 11, 2008. This decision concluded that the cheating that took place was not initiated, nor did it benefit, Absolute Poker as a corporate entity, or its directors or principal ownership. The decision imposed a number of sanctions and conditions on Absolute Poker, including twenty-four specific directions for changes to its management and systems. The KGC was provided evidence that all players affected by the cheating that took place were fully reimbursed for their losses.

Shortly after its decision was rendered in the Absolute Poker matter, the KGC first became aware of similar allegations of cheating involving individuals within Absolute Poker’s sister company: Ultimate Bet.

Over the past several months, the KGC has been closely involved in an in-depth investigation of the Ultimate Bet cheating allegations. Significant efforts have been expended to identify and correct the flaws in Ultimate Bet’s system that permitted the cheating to take place; to identify the individuals that were responsible for the cheating and to 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’s investigation into the Ultimate Bet matter has yielded a number of key findings which, within the next several days, will enable the KGC to issue its decision on the appropriate steps to be taken.

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. 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 Ultimate Bet matters are not being driven by affected players.


17 Comments to “Kahnawake Gaming Commission Speaks about AP & UB”


  1. Kevin Mathers
    says:

    Looks like AP and UB are working together, again:

    http://tinyurl.com/ap-ub-merge


  2. California Jen
    says:

    Oh lord.

    If you are a site trying to overcome a scandal and repair your reputation, what should you do? Join forces with your sister company who has the same problems! Yes, two scandal-ridden companies joined together equal one big PR field day.


  3. Tropical Steve
    says:

    Oh, you cannot be Cereus.


  4. Poker Shrink
    says:

    “Our ears are perked, KGC.”

    I hope you have some ear viagra to keep them up because coming soon usually means, we ain’t figured it out yet.


  5. California Jen
    says:

    Tropical Steve – LOL!

    Shrink, I do have ear viagra, but do not ask me why. 😉


  6. DanM
    says:

    Why am I always being the apologist for the AP/UB sides? I dunno, I gotta think this memo seems pretty sincere. I mean the KGC KNOWS they are under hyperheavy scrutiny with anything they say. What else could they say but the above? I’m willing to give them the benefit of the doubt for now … suspicious eye still half-cocked of course.

    Everybody loves to get up in arms, but did anyone from the public/media ask to watch them do their job for a day, or visit the Mohawk Nation? If we had done that, then I think it’s fair game to crucify them freely no matter what they say. but right now, we have to let them have their say, because they’re pretty much all we got right now when it comes to getting any information that may or may not be relevant to our cherished poker security. i mean shit, this is the wild-unregulated-techno-west right now … we screamed, they responded … what more do you want, other than for someone to snap their fingers and make it all go away?

    And who else is Absolute/UB gonna pair up with? It’s not like Full Tilt or PokerStars would ever take them on as a partner. Cake Poker maybe? And if the KGC didn’t at least compare notes on these two sites, ….

    OK, wow, never mind … i just read kevin’s link from above. you can theoretically ignore everything i just said.


  7. Chuck Barnett
    says:

    Good Evening Folks,

    My name is Chuck Barnett and I am a member of the Board of Supervisors of Mohawk Internet Technologies, the licensed cohosting facility of the Kahnawa:ke Mohawk Territory where all KGC licensed operators are required to colocate their online operations. Although I am primarily responsible for overseeing the operation and management of the utility company, I am also the former Administrator for the KGC and have the experience of having been responsible for the enforcement and compliance of the KGC’s Rules and Regulations Concerning Interactive Gaming.

    I have recently agreed to assist the Commission in the task of interfacing with the online poker communities when/where possible and to extend assistance where possible.

    Clearly the internet is a large “place” and I cannot be everywhere at once nor be available 24/7, but I will do my best where I can, so please feel free to contact me.

    I only ask that we try and keep everything mature and mutually respectful, as I have witnessed a number of “forum threads” in recent memory degenerate into society in its most primitive form.

    Tho Niiowennake.
    (These are my words)

    Chuck Barnett
    Board of Supervisors
    Mohawk Internet Technologies
    Kahnawa:ke Mohawk Territory


  8. DanM
    says:

    Thanks for getting in touch Chuck. I thought you might. Lemme tell ya, it’s tough sometimes, but we do our best here to be open-minded and intelligent (while not losing touch with visceral reactions that are based on real human emotions). Mutually respectful you will get. Mature … um … maybe?

    OK, I kid. Ultimately all of us just want a better understanding of the issues you happen to deal with (presumably) on a daily basis, because they do affect our lives — either directly or indirectly. And I think most of our active readers/commenters are smart enough to understand that a semi-anonymous “you suck!” doesn’t advance the conversation in any meaningful way. And at the same time, because of this, they won’t take everything you or anyone else from KGC/UB/AP (Cereus?) at face value. I hope you’re OK with that.


  9. BJ Nemeth
    says:

    I certainly don’t envy your job, Chuck, but I can promise that you will always get a fair shake and an open ear from me. I’m not known for being one to jump to conclusions. (And I save the name-calling for my friends and family.)


  10. Chuck Barnett
    says:

    Thank you for taking the time to welcome me here, I appreciate your hospitality.

    Just so we’re on the same page (so to speak), I am not a member of the Kahnawa:ke Gaming Commission, nor am I an employee of the Commission, I merely engage with them on a regular basis as the result of my position with Mohawk Internet Technologies. Realizing that there is a need for more effective communication with the online poker community, I’ve agreed to assist them on my own time in establishing better lines of communication with the community.

    To bring you up to speed with where I am, I have not been a part of the ongoing investigation into the events of the past few months until about 3-4 days ago when I offered to assist them.

    The past 72 hours have been something of a crash course for me, as I’ve poured through reams of data and investigative summaries and members of the Commission and it’s support staff have brought me up to speed.

    With that said, I was taken aback at the complexity and scope of the investigation and can appreciate for myself the man-hours and resources which have been committed to the process. Keep in mind, that I do not deal with the licensed operators at a regulatory level, and as a result have not been part of the process.

    Simply put, its Friday night and Im STILL trying to mentally process everything I’ve taken in over the past 3 VERY long days.

    While Im not empowered to examine issues specific to the investigation until everything is wrapped up and findings released, I can hopefully provide some insight into the regulatory system, the environment and perhaps some of the processes involved.

    You folks have a contact within the Kahnawa:ke Jurisdiction in me, and you can feel free to post me a message if you think I might be able to assist and I will do what I can, ok?

    All that I ask is that folks please just dont type in ALL CAPS without punctuation and resist the urge to incite any off-the-wall “tinfoil hat” type conspiracies, as Im still just one man, doing his best to assist in his free time.

    Nia:wen
    (I extend my thanks)

    Chuck Barnett
    Board of Supervisors,
    Mohawk Internet Technologies


  11. DanM
    says:

    OK, Chuck here’s my first round of questions for you …

    1. What does an investigation process entail, and what is the motivation for the KGC to undertake such a (presumably) expensive effort?

    2. Is it a matter of good business, or staying legally clean for the KGC?

    3. Because there is a connection — whether current or not — between KGC and Tokwiro Enterprises, why wouldn’t the KGC bring in an independent third party to conduct the investigations?

    4. Where does the new Cereus fit in to all of this?

    5. The KGC says:

    The KGC’s success as a regulator is evidenced by the fact that a significant percentage of the online gaming industry has chosen to locate and operate within Kahnawá:ke.

    Do they really expect that argument to fly? I can almost guarantee these operations would choose to locate and operate south of the Canadian border if they had that option. (No offense to Canada.) Full disclosure: I find this statement kinda funny just because I happen to have an infomercial on in the background right now claiming that Extenze penis-lengthening pills obviously work, because if not, why would they have sold so many? A sucker’s born every second.

    6. The KGC says:

    Given the length of time that it has regulated this new industry and the significant number of licensees under its control, the KGC’s record has been exemplary.

    How long have they regulated “this new industry”, and how many licenses are under its control? A few years? A few dozen? Or more like 20 years and hundreds?

    7. The KGC says:

    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 Ultimate Bet matters are not being driven by affected players.

    This seems a very good point. But doubters will say it’s pretty easy to silence people with some money. I know that in far bigger scandals I’ve looked into, this has been the case. Were there any agreements of any form signed by anyone who received fiscal compensation for damages that may or may not have been suffered in connection to their dealings with AP or UB? A simple yes or no to this question will suffice.

    Thanks in advance for what you can tell us.


  12. DanM
    says:

    Oh, also …

    Throughout its history, the KGC has met these challenges and its regulations have been emulated in a number of other jurisdictions around the world.Throughout its history, the KGC has met these challenges and its regulations have been emulated in a number of other jurisdictions around the world.

    I was not aware of that. Interesting. Where else have the KGC’s regulations been emulated, and for what industries?


  13. Chuck Barnett
    says:

    Whoooah, easy Dan. Its early, I havent had coffee and Ive got a long day ahead of me. How about picking one question for the moment, and I’ll answer it.

    Then, we’ll take it from there.

    Dont worry Im not going anywhere…

    😉


  14. California Jen
    says:

    Hi, Chuck… Maybe I can lend a hand here. Can you first tell us a little about the investigation? For example, when did it officially begin, how many investigators are involved, and how much time (per day or week) has been put into it?


  15. DanM
    says:

    Chuck, I’m leaving town in less than a day for a little while — will be away from the computer, so no immediate hurry — but if you’ve gotta pick one … OK, how ’bout #7 … or #’s 1/3 (they kinda go together.)


  16. Chuck Barnett
    says:

    Hi Dan,

    Just came in from mowing the yard, and plan to settle in for a while now. As long as we can keep things reasonably orderly so that I dont get bombarded with a slew of questions in one shot (you all are many, and I am only one, afterall), I’ll find the time to address the questions, where I can.

    Ok, #7 read as:

    “The KGC says:

    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 Ultimate Bet matters are not being driven by affected players.”

    Question: This seems a very good point. But doubters will say it’s pretty easy to silence people with some money. I know that in far bigger scandals I’ve looked into, this has been the case. Were there any agreements of any form signed by anyone who received fiscal compensation for damages that may or may not have been suffered in connection to their dealings with AP or UB? A simple yes or no to this question will suffice.

    Which was placed within the original context of:

    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. 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 Ultimate Bet matters are not being driven by affected players.

    Having been on the job for about 4 days now, I am unaware if any affected players were required to sign any, “agreements”. I am only able to confirm for certain that the KGC was adamant in their position that of primary concern was that those who were negatively impacted MUST be refunded. The licensee was in full agreement with this sentiment and complied fully.

    Thanks for slowing down the pace a bit, Im sure you understand that its going to make this exchange much more productive.

    Chuck Barnett


  17. Chuck Barnett
    says:

    Ok, second question from the gallery:

    “California Jen Says:
    July 26th, 2008 at 8:43 am

    Hi, Chuck… Maybe I can lend a hand here. Can you first tell us a little about the investigation? For example, when did it officially begin, how many investigators are involved, and how much time (per day or week) has been put into it?”

    Hi Jen,

    Im going to guess that you’re referring specifically to the issue and subsequent claims at UB, right?

    I wasn’t assigned to assist the KGC at that specific time, although I was aware of an investigation “in motion”, but I suppose I can make an inquiry as to when the file was first opened if it is of any help. I’ll just ask you to be patient with me as I have a number of time-critical items associated with the file on my desk at the moment.

    I will say that this issue has dominated the Kahnawa:ke Gaming Commission’s attention over the past few months, occupying the bulk of the attention of support staff, independant software auditors, Commission Members, Senior Regulatory Advisors and Legal Counsel while they simultaneously work to continue the day-to-day requirements of regulating the 60+ licensed operators within the jurisdiction.

    While I was aware that their hands had been full in that time, from my position at the utility company (MIT), it was not an issue that required my participation from the co-hosting facility end of things.

    Thanks,

    Chuck Barnett