Absolute Poker Cheating Scandal

http://freakonomics.blogs.nytimes.c...olute-poker-cheating-scandal-blown-wide-open/
A few weeks back I blogged about allegations of cheating at an online poker site called Absolute Poker. While things looked awfully suspicious, there wasn’t quite a smoking gun, and it was unclear exactly how the cheater might have cheated.

A combination of some incredible detective work by some poker players and an accidental (?) data leak by Absolute Poker have blown the scandal wide open.

You can read the first-hand account in the following thread at 2+2 Poker Forum, but here’s the short version:

Some opponents became suspicious of how a certain player was playing. He seemed to know what the opponents’ hole cards were. The suspicious players provided examples of these hands, which were so outrageous that virtually all serious poker players were convinced that cheating had occurred. One of the players who’d been cheated requested that Absolute Poker provide hand histories from the tournament (which is standard practice for online sites). In this case, Absolute Poker “accidentally” did not send the usual hand histories, but instead sent a file that contained all sorts of private information that the poker site would never release. The file contained every player’s hole cards, observations of the tables, and even the IP addresses of every person playing. (I put “accidentally” in quotes because the mistake seems like too great a coincidence when you learn what followed.) I suspect that someone at Absolute knew about the cheating and how it happened, and was acting as a whistleblower by sending these data. If that is the case, I hope whomever “accidentally” sent the file gets their proper hero’s welcome in the end.

Then the poker players went to work analyzing the data — not the hand histories themselves, but other, more subtle information contained in the file. What these players-turned-detectives noticed was that, starting with the third hand of the tournament, there was an observer who watched every subsequent hand played by the cheater. (For those of you who don’t know much about online poker, anyone who wants can observe a particular table, although, of course, the observers can’t see any of the players’ hole cards.) Interestingly, the cheater folded the first two hands before this observer showed up, then did not fold a single hand before the flop for the next 20 minutes, and then folded his hand pre-flop when another player had a pair of kings as hole cards! This sort of cheating went on throughout the tournament.

So the poker detectives turned their attention to this observer. They traced the observer’s IP address and account name to the same set of servers that host Absolute Poker, and also, apparently, to a particular individual named Scott Tom, who seems to be a part-owner of Absolute Poker! If all of this is correct, it shows exactly how the cheating would have transpired: an insider at the Web site had real-time access to all of the hole cards (it is not hard to believe that this capability would exist) and was relaying this information to an outside accomplice.

If this is all true, I presume that the two cheaters are looking at potential prison time. I would also guess that if Absolute Poker continues to argue that nothing out of the ordinary happened, they will take an enormous hit to their profits. Online poker is a game of trust — players send their money to a site believing that they will be playing a fair game, and trusting that the site will send them their winnings. If there is even a little bit of uncertainty about either one of those factors, there is no good reason for a player to choose that site over the many close substitutes that exist. If I ran Absolute Poker, I would take a lesson from past corporate attempts at cover ups, sacrifice the cheaters, and institute safeguards to prevent this ever happening again.

The real lesson of this all, however, is probably the following: guys who aren’t that smart will figure out ways to cheat. And, with a little luck and the right data, folks who are a lot smarter will catch them doing it.

(Hat tip: Dan Hirschberg and Dean Strachan, who have kept me up to date on this story.)