Phil Hellmuth Stands by UltimateBet: $75 Mil Claim Made By Poker Company
Phil Hellmuth, who holds the record for most World Series of Poker bracelets won, insists that online poker room UltimateBet is doing everything possible to clean up the mess left by a few bad apples who were once a part of that organization.
Hellmuth, who is a paid representative for UltimateBet.com, met with who he referred to as the "the new strong COO" of that company, Paul Leggett.
"After a couple of embarrassing scandals involving both sites, (Paul) Leggett personally cleaned up most of the mess as he ran extensive investigations into any wrongdoings at UB, and made sure that anyone affected negatively would have an accurate refund number. The people in charge were so impressed with the level headed way that Leggett handled the scandals that they began to consider him for COO.
"They knew that UB needed someone strong, with an impeccable record, to carry the torch forward and clean up the sites. They knew they needed someone who had a huge commitment to security and integrity, so that UB could win back the players that they lost."
Leggett's latest mission will be to deal with a reported $75 million Claim by UltimateBet levied against the company that previously owned it.
Allegations that cheaters last year manipulated the software powering the UltimateBet.com poker site so they could see their opponents' hole cards have triggered the claim against UltimateBet's Canadian parent company, msnbc.com has learned.
Mike Brunker, an MSNBC reporter who has covered the online gambling industry for a good many years reports that word of the $75 million U.S. claim ($80 million Canadian) emerged this week when msnbc.com contacted a court-appointed liquidator overseeing the voluntary dismemberment of Excapsa Software Inc. of Toronto, which formerly owned and licensed the poker software to UltimateBet and other gambling sites. The claim was filed by Blast-Off Ltd. of Malta, a private company that currently has an ownership interest in Ultimate Bet. It should be noted that upon further investigation, it is UltimateBet that has filed the claim.
"We're taking it seriously and are in contact with the stakeholders with a goal of settling the claim," said the liquidator, Sheldon Krakower, president of XMT Liquidations Inc. "... It's a very touchy situation. We're just trying to get everything done."
Krakower said the amount of the claim did not directly correlate with the amount believed to have been stolen from UltimateBet players and hoped that a settlement would be reached soon.
UltimateBet has insisted that those responsible for the cheating are no longer involved with the company.
The company that claims ownership of UltimateBet - Tokwiro Enterprises, headquartered in the Kahnawake Mohawk Territory in southern Canada - has issued refunds to anyone who they believed to have been affected by "suspect" tournaments.
An external audit is currently taking place.
The company blamed the intrusion on "individuals ... (who) worked for the previous ownership of UltimateBet prior to the sale of the business to Tokwiro in October 2006."
Two of those employees were discovered living it up on the Pacific Coast of Costa Rica during a routine visit by Gambling911.com last month.
Tokwiro's chief operating officer, Paul Leggett, in a Two Plus Two Poker podcast on June 2, said that the cheaters were able to evade UltimateBet's anti-fraud protections by "setting up these accounts so they appeared as VIP poker professionals. Because these players had this kind of status, they were able to get fast withdrawals and basically bypass our security." He also said that the company was "pursuing our options, both criminal and civil."
Leggett and others have been requested by the Kahnawake Gaming Commission not to speak about this matter until after the conclusion of the audit.
In an odd bit of irony, UltimateBet has perhaps become one of the safest online poker rooms around today. Speak to any industry analyst and they will tell you the same thing: "UltimateBet is not the only online poker room where people within the company were cheating players, it's just that they are the only one's who have been caught doing it."
Kahnawake is considered a reputable licensing agency for online gambling and has played a roll in boosting the sector's credibility over the last ten years. Kahnawake also has an open channel of communication with Gambling911.com. Leggett, by most accounts - and supported by Hellmuth's claims - is doing an admirable job of turning the company around. UltimateBet is also represented by professional poker player, Annie Duke, who is heavily involved in charitable enterprises such as Ante Up For Africa. Other post-scandal management personnel at UltimateBet have long standing favorable ties with Gambling911 and have also worked hard to right any wrongs that may have occurred as a result of last year's scandal.
But then there are the perpetrators, none of whom have been made accountable by their actions, at least not yet.
MSNBC's Mike Brunker paints a picture of UltimateBet as a group run by shareholders/investors who - like in any publicly traded company - must act in the best interest of the whole (the corporation) even if they are not exactly enamored with some of its parts (those responsible for this whole mess).
The one constant positive throughout the last year has been that UltimateBet remains a thriving and viable business. Countless other i-gaming companies before them - mostly fly-by-nights - have closed up shop, leaving their customers high and dry. While the vast majority of these were no name brands, occasional exceptions included one of the industry's largest betting firms - BetonSports.com. Before BoS there was Sports International - the first online sports book - and Sports Market, which catered to most professionals up until it closed the week after Super Bowl 2002. To its credit UltimateBet has refused to fold. In fact, UB is the 10th largest online poker room in the world (5th if you factor in sister poker site Absolute Poker) and the 3rd largest catering to US players.
Excapsa eventually sold all its assets to Blast-Off Ltd., a privately owned Excapsa licensee based in Malta, on Oct. 12, 2006, and was delisted from the AIM exchange. Blast-Off Ltd., had previously been listed in filings as an Excapsa license holder for Elimination Blackjack, a tournament version of the popular card game invented by Hamilton, the ieLogic consultant.
Nearly a year later, Tokwiro claimed ownership of both Absolute Poker and UltimateBet. It later said it had acquired UltimateBet in October 2006 - the month Excapsa announced the sale of its gambling software to Blast-Off Ltd. - but it has never explained how or under what terms it had acquired the site, according to the Brunker investigative report. But to be fair, since 1998, the vast majority of online gambling enterprises have had to work under "concealed" ownership after 24 indictments against owners were issued in March of that year. Prior to this time, most American owners used their real names, even in advertisements.
Krakower, the court-appointed liquidator overseeing Excapsa's bid to cease to exist as a corporate entity, said that Blast-Off and Tokwiro "are somewhat one in the same," but added, "Blast-Off ... that's the key name." Blast-Off and UltimateBet are essentially one in the same.
Some players questioned the selection of Frank Catania, a former New Jersey state gaming regulator, to conduct "a full forensic audit/investigation" of Tokwiro to ensure that UltimateBet's games are fair. They point to Catania having helped the KGC develop its gaming regulations and could hardly be considered an independent investigator. But Catania, who is highly regarded within the online gaming sector, insisted he will take a hard knock approach to the audit and leave no stone unturned.
"We'll go in and look at reports from (auditor) Gaming Associates, we'll look at employees, including ownership, look at the software ... whether the games are fair and honest and what protections have been put in place," he said. "It's going to be a complete examination of the company and no one will get any special preferential treatment because of a past position with the tribe or anything like that."
Kahnawake has also vowed to have anyone connected to the alleged cheating ring removed from the company.
"When a cloud appears like the scandals, you have to look for the silver linings," Hellmuth says. "Yes, the scandals are ugly, and yes, the sites would have been much better without them. However, one good thing to come out of all of this is that UB and AP are committed to doing the right thing.
"They will refund all of the players affected, and redouble (or retriple) their efforts to maintain a safe and secure environment. One great thing to come out of all this is Paul Leggett. UB and AP will merge soon into one mega-site and Leggett will take the reins. Of course, UB and AP are still expecting some negative press, but I am confident that Paul Leggett will help the sites turn the corner. I need to point out that almost every site in the industry has had security scandals (and refunds to their players), but the UB and AP scandals are the ones that became the most public."
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Updated September 19, 2008 3:56 pm EST
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Christopher Costigan, Gambling911.com Publisher
