$500K Fine, Sanctions for Absolute in Cheating Scanda

14 January 2008

The Kahnawake Gaming Commission on Friday released its final report following after a three-month investigation into an Absolute Poker (AP) cheating scandal.

The Kahnawake Gaming Commission, which licenses AP, began receiving complaints of impropriety on the poker site in October 2007.

According to the KGC's report, for approximately six weeks beginning Aug. 14, 2007, nine AP users employed software to view the "hole cards" of other players. The KGC said that it has identified the players and has ordered AP to remove them from any official role within the company and prove to the Commission that it has done so.

In October, AP revealed that the breach had been caused by a "trusted consultant" of the company and that the problem had been resolved. Furthermore, the company said that it had taken the proper steps to ensure this would never happen again.

The investigation, conducted by third-party auditor Gaming Associates, found no evidence that AP had taken part in or benefited from the illegal activities of the nine individuals. Nonetheless, the company failed to notify the KGC within 24 hours of the discovery of the activity, according to the report.

On the other hand, once the illicit activities were made public AP acted swiftly and responsibly to reimburse its customers that were affected by the breach. By November, the company had paid out $1.6 million to those customers.

In light of the manner in which the breach was handled, the KGC has determined that AP has violated four sections of the Commission's Regulations relating to Client Provider Authorization and handed down the following reprimand to the company:

Over the next two years, AP will be subject to random audits, financed by AP, of logs and records. If at any time the audits turn up a breach in AP's provider agreement with KGC its license may be suspended or revoked.

In addition, the company must immediately implement a compliance program and a $500,000 fine must be paid to the KGC within 60 days. Furthermore, all costs associated with the investigation must be assumed by AP.

The KGC also reiterated that all persons associated with the scandal must be permanently removed from the company.

With a hint of relief, AP in a prepared statement on Friday responded to the KGC's report, saying it "accepts without reservation the KGC's findings and sanctions."

It announced its intentions to beef up its security by assembling a team to add improved controls and additional safeguards in order to prevent future breaches.

It also announced that it will be holding a series of "poker security summits," beginning Jan. 18, 2008.

Click here to view the Kahnawake Gaming Commission's full report.

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