Ultimate Bet to Refund $15.1M to Poker Players Affected by Scandal

A statement released Nov. 5 by the Kahnawake Gaming Commission (KGC) corroborates Tuesday's story run in Canada's National Post saying that Excapsa Software Inc. will pay USD $15 million to Blast Off Ltd., owned by former Kahnawake grand chief Joe Tokwiro Norton, which bought Ultimate Bet from Excapsa in 2006. The settlement will enable Ultimate Bet/ Blast Off to pay an estimated $9 million, on top of the USD $6.1 million already paid, to poker players affected by the hole card cheating scandal while playing on Ultimate Bet between 2004 and 2008.

An Ontario Superior Court judge Monday approved the USD $15 million settlement to be paid by Excapsa shareholders to Blast Off to allow Ultimate Bet to stay in business, be licensed by the KGC, and to refund all cheated players, as part of Excapsa's liquidation proceedings.

According to documents filed by the liquidator, Blast Off originally sought USD $81.4-million in damages for being sold corrupted software. That figure included USD $5-million for harm to Norton's reputation and USD $49-million for damage done to the company's value as a result of the cheating controversy, which has been widely publicized in and out of the gambling world.

Presumably the remainder of the $15 million award over the $9 million Ultimate Bet has calculated it still needs to pay out to affected players, will go toward the above damages.

BACKGROUND

The KGC, which regulates online gambling run out of the Mohawk Territory in Canada, reported in September that it had found "clear and convincing evidence" of "multiple cheating incidents" on Ultimate Bet (between May 2004 and January 2008) involving software being used to enable insiders to see opponents' hole cards (click here for related article).

The KGC identified poker pro and 1994 WSOP bracelet winner Russell Hamilton, a former consultant to Ultimate Bet, as "the main person responsible" for the cheating. Mr. Hamilton has not been charged with any criminal wrongdoing, and he has not responded publicly to the commission's allegations.

It gave Ultimate Bet until this past Monday November 3rd to resume refunding players. The site has already paid out US$6.1-million but has calculated that it owes at least another US$9-millon to people who were cheated.

"The good message, and the message that Ultimate Bet wants to send, is that it not only cleaned up and took out the tool, but it's refunding players, many of whom probably don't even know that they were cheated and probably don't have the proof."

SECOND SCANDAL

This past January, Absolute Poker- another site owned by Norton that was involved with a cheating scandal- was fined $500,000 by the Kahnawake Gaming Commission. This time, the Commission fined BlastOff $1.5 million for the Ultimate Bet cheating scandal.

Media has noted how these cheating incidents may have affected Kahnawake's reputation as a reliable gaming jurisdiction. This past January, the UK's Gambling Commission's announced in a newsletter that it had refused to add Kahnawake to a "white list" of jurisdictions permitted to advertise online gambling in the lucrative U. K. market along with Antigua (who they since just approved).

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