The original Ultimate Bet website was launched in 2001. This would have been a few years after sites like Bodog and PokerRoom (Bwin/PartyPoker), but around the same time Pokerstars was launching (on the inauspicious date 9/11/2001). This was before the poker boom of 2003, so UltimateBet was well-positioned to be a leading card site when Chris Moneymaker won the World Series of Poker in 2003 and taught millions of average poker players worldwide they had a chance at fame and fortune, too.
When the boom came, Ultimate Bet became one of the leading poker sites on the Internet. Even cash game masters like "Yukon" Brad Booth chose to play anonymously in their card room, though much to their dismay--as later years would prove.
In fact, when the World Poker Tour made its television debut in 2002 and 2003, Ultimate Bet sponsored one of the premier stops on the tour: the Aruba Poker Classic. From the first season in 2002 until the fourth season in 2005-06, UltimateBet.com sponsored the event, which paid its winners over a million dollars.
The winners of the Aruba Poker Classic during the UltimateBet.com years were Juha Helppi (2002), Erick Lindgren (2003), Eric Brenes (2004), and Freddie Deeb (2005). Meanwhile, some of Ultimate Bet's spokesmen over the years were some of the biggest names in gambling, including Annie Duke and Phil Hellmuth Jr.
The Internet poker community was rocked with scandal in September 2007 when online poker players began posting on industry message boards certain accusations that Absolute Poker had a superuser account which allowed one of the players to see the hole cards of every other player at the table.
With this information, even a beginner card player would be able to make decisions at the table much better than the best professional. As the weeks went by, the buzz on the forums became too much and too loud, as more players offered anecdotal evidence that some manner of fraud was taking place. In October 2007, the licensing authority for Absolute Poker, the Kahnawake Gaming Commission, announced it would launch an investigation.
As the furor continued, an intriguing set of data was released to the online gambling public by Absolute Poker. In an apparent response to one player's complaints about a tournament won by "Potripper", the full information for that tournament was released. This contained the hole cards for everyone, as well as the IP address information for everyone at the table or watching as a third-party observer.
When Michael Shackleford analyzed the tournament history, the actions of Potripper appeared highly suspicious, described by the Wizard of Odds as the conduct of someone with complete knowledge of the everyone's hands at the table. Potripper almost always bluffed at times when the opponents' hands were at their weakest, while folding their hands when their cards were heavily overmatched--even when they were holding an excellent hand. In short, Potripper played the way no one without knowledge of their opponents' cards could play.
A few months after this fiasco, Ultimate Bet announced it had launched an internal investigation of its own security practices and software protocols. The internal investigation turned up what a press release termed as a security breach by a trusted employee (Russ Hamilton), who devised some manner of program similar to Absolute Poker's own scandalized software programs.
Mr. Hamilton and others could see the cards everyone at the table were holding, viewing them through the Ultimate Bet servers. At the time, Ultimate Bet's spokespeople suggested the cheating had been committed over a limited time from March 2006 until December 2007. A later statement amended the start date to the beginning of 2005, thought subsequent findings by the Kahnawake Gaming Commission show compelling evidence that UltimateBet.com cheating went on from January 2004 until January 2008--49 months. Ultimate Bet announced it would pay all the card players who were cheated.
The new owners of Ultimate Bet, the Cereus Poker Network, disavowed having any connection to the Ultimate Bet cheating, claiming this took place when Excapsa Software owned the site. Cereus Poker Network took over both Ultimate Bet and Absolute Poker, removing the cheating software from both sites and taking new measures to see their poker sites were clean of cheats and clear of any suspicion. Site membership dropped off as massive numbers of players severed their relationship with Ultimate Bet, but many others remained. Ultimate Bet handled their problems in a much more sensible way than Absolute Poker did. They broke the story and managed the damage, thus retaining more credibility. Up until the scandals became known, the wrong acts committed were roughly the same.
Though the revelations of 2007 and 2008 were a tremendous black eye for the entire industry, it's though that lessons were learned and many of the loopholes of the past have been closed. One must hope so, because the anti-gambling establishment in the United States looks for any reason to castigate the online poker industry. The second rise and fall of Ultimate Bet is closely tied to the US government's stance on gambling.
With UltimateBet and AbsolutePoker combining to form the Cereus Poker Network, this pooled two of the largest online poker communities in the world. Obviously, many players at either site closed their accounts and ended their relationships with the scandalized companies, but many remained. Given their place in the site rankings and the many connections and customers in online card room gambling, the Cereus Poker Network made many gains from its nadir in 2008 until the spring of 2011. To most observers, it appeared that the worst storms had been weathered, though the black cloud of U.S. government opprobrium always hung over those companies which continued to accept players from the United States. The Cereus Poker Network and its various properties had recovered much of their vigor, when another black day hit the online poker world.
On Friday, April 15, 2011, the U.S. Attorney's Office announced it was seizing five domain names in the online poker industry: Ultimatebet.com, UB.com, Absolutepoker.com, Fulltiltpoker.com, and Pokerstars.com. This was done after a secret grand jury handing down indictments to a federal court in New York City on March 10, 2012. These indictments were for key executives in the online gambling industry, after the arrest the previous April (2010) of Daniel Tzvetkoff, the owner of a defunct Australian payment processor. The owners of FullTilt and Pokerstars had alleged Daniel Tzvetkoff had defrauded them of $100,000,000, allegations which may have put the spotlight on the man and led to his arrest in Las Vegas. Facing 75 years in prison on spurious charges of money laundering, Daniel Tzvetkoff promptly turned states evidence. This put Pokerstars, Full Tilt, Absolute Poker, and Ultimate Bet in serious legal jeopardy. The day when the websites were shut down quickly became known as Black Friday in the poker industry.
Pokerstars and Full Tilt were given their domains back for pledges to pay back American players and stop accepting US players in their card rooms. In both cases, the companies were alleged to have engaged with at least one Utah bank (they owned stock in) to process American players, which led to the charges of money laundering. In the case of Full Tilt Poker, key shareholders of Full Tilt poker ended up in a civil suit because of the way money was handed out to shareholders. The key individuals in these suits were Howard Lederer, Rafael Furst, and Chris Ferguson.
Scott Tom and Brent Beckley, two executives for Absolute Poker, were names on the list of original indictments. No executives for UB were named, though Black Friday put in doubt the future of both poker rooms. Because a larger percentage of the revenue for AbsolutePoker and Ultimate Bet were involved with the US market, the loss of US revenues threatened the companies in a way that Pokerstars and FullTilt never quite faced. At the same time, Cereus Poker Network did come to an arrangement with American authorities to retrieve their domains and start paying back players from the USA.
All of these scandals, investigations, and other legal wranglings might make a skeptic wonder how safe Internet gambling is, so I'd like to address that issue and use this brief history of UltimateBet to underscore some of the points I make. Someone delving into the world of online gambling has to take precautions, just like you would if you were engaging in any other electronic commerce. Do your research on the operators you do business with. Study the companies whose software powers the sites. Certainly, learn what the local and national laws are in your country, so you know if it's even legal to gamble where you're at.
With those suggestions, I'll add that the industry's biggest companies who do business in the online gambling industry are the ones with the best reputations for paying on time and providing the best games. The incentive is to provide fair play, the best customer service, and timely payments.
This short history lesson has shown that disgruntled poker players go online to industry forums and message boards and, if enough complaints are lodged, information goes viral. Virtual casino operators don't want to get a bad reputation, because poker gamblers are some of the biggest loudmouths on the Internet--which is saying a lot. In the age of the social networking revolution, when companies and corporations respond quicker to comments on Twitter and Facebook than they do calls to their customer service call centers, the incentive to do right is even greater. A public relations sword of Damocles hangs over the heads of the Internet cardrooms, if they treat customers wrong as a matter of policy.
Beyond that, watchdog groups and industry associated like eCogra, the Interactive Gaming Council, and GamCare exist to keep a close eye on wrongdoing. All legitimate online poker rooms are licensed by authorities in Gibraltar, Malta, Cyprus, Alderney, Kahnawake, Antigua and Barbuda, and the Netherlands Antilles. The poker sites also hire outside auditing firms to test their games and investigate their numbers. A lot of safeguards are in place.
Ultimately, the online gambling scandals that have given a black eye to the industry as a whole have damaged credibility, and were crimes committed against a devoted and trusting public. Yet in a larger sense, the scandals happened roughly 10 years into a new industry, when all the safeguard mechanisms still weren't in place. The scandals showed how to close the loopholes and what to look for in the future. You could say something of the sort was bound to happen, that trial-and-error was likely to be required, and that the worst damage has already been done. That gives no help or comfort to those affected, but it should assure those who want to play at sites like Ultimate Bet in the future.