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"Back Door" Cheating Scandal Rocks Online Poker
AcidAUS sends us the story of an online poker cheating ring that netted an estimated $10M for its perpetrators over almost 4 years. The article spotlights the role of an Australian player who first performed the statistical analyses that demonstrated that cheating had to be going on. "In two separate cases, Michael Josem, from Chatswood, analyzed detailed hand history data from Absolute Poker and UltimateBet and uncovered that certain player accounts won money at a rate too fast to be legitimate. His findings led to an internal investigation by the parent company that owns both sites. It found rogue employees had defrauded players over three years via a security hole that allowed the cheats to see other player's secret (or hole) cards." The (Mohawk) Kahnawake Gaming Commission, which licenses the two poker companies, has released its preliminary report. MSNBC reporting from a couple of weeks back gives deep background on the scandal.
In theory the online casinos have ways to catch this kind of collusion. If 8 people at a table are connecting from the same IP address, that sets off alarm bells. If the same 8 accounts keep playing together at the same table day after day, even if they're all over the world, that sets off alarms. The local game clients themselves can look for signs of screen scraping applications that might be capturing the hole cards and transmitting them to other players.
All that said, I have no idea whether or not the online casinos are really successful at preventing outside collusion.
RETURN without GOSUB in line 1050
o my....story time...
The phrase of the day is "superuser"
This data was given to many professional online poker players who analyzed the data in late 2007 (see 1 year ago, 10/16/07 to be exact) when they requested the data from the online site "Absolute Poker".
Instead of the site giving them the usual data which hid the opponents cards unless they had shown them during the hand, they sent all the raw data which included the opponents hole cards, and specifically every player and spectators player number. One of the spectators was player number "363" I believe which was incredibly low (one of the first ever to register on the site).
When designing the software they must have used several "superuser" accounts to make sure that it was working correctly, so they let it see all the cards on the table. Someone inside Absolute Bet discovered(or knew they entire time) that the loophole was still open and used multiple accounts to siphon hundreds of thousands if not millions of dollars off of their high stakes users. This was used also over other websites running the same backend software.
What made this so obvious, simply put, to the high stakes players was that these players were playing perfectly over thousands of hands which isn't possible unless you know all the cards on the table.
For more reading see:
http://freakonomics.blogs.nytimes.com/2007/10/17/the-absolute-poker-cheating-scandal-blown-wide-open/
or for more poker talk:
http://archives1.twoplustwo.com/showflat.php?Cat=0&Number=12523924&page=0&fpart=1&vc=1
Indeed there are. I wrote a book on this:
Policing Online Games
It's far from the last word.
For more information:
http://www.wayner.org/books/pog/
To look up on Amazon:
http://www.amazon.com/exec/obidos/ASIN/0967584426/myhomepage0bc
There are all kinds of clever economic theories, but ultimately, there are only so many goods produced and useful services provided in the world, no matter how much money gets printed to pay for them, and the efficiency of production and service provision only increases so fast over time.
This is true. However, the increase in effeciency due to technological advancement *is* the huge driver that makes investment work. That growth is significant over time (measured in inflation-adjuested money, as that's what's interesting). European economies have grown a solid 2% a year post-WWII. The American economy has grown a terriffic 4% a year. And a bit less than that 4% gets paid to bondholders, and a bit more to (common) stockholders, so the stock market is far from a zero-sum game.
Even so, this makes it all too clear that stock market investing really is a long-term prospect: even something like a five-year plan, which is what a lot of the pros used to quote as a sensible minimum investment period, has brought little safety at all in the past 10-15 years. And how many people really have enough money that they can invest for 10+ years without wanting to spend any of it, yet still have little enough money that the return on investment matters?
Yes, it's the 30-40 year time horizon that matters. Everyone can invest on that scale: just live below your means, not above them. Accumulate wealth, not debt. It's as easy (as hard) as having a little self-discipline. If you need your money back in 5 years, it should really be in (short term, non-corporate) bonds. Shorter than that and you want to stick to FDIC-insured accounts and treasuries.
Investing so that you can retire comfortably at 55 instead of starving on social security at 65 is "just" a matter of saving a significant percentage of your take-home pay every month, to an account that you won't draw from even if your 'fridge breaks and your car's in the shop, and you get laid off. That means you have to save even more to give yourself that padding. All of which is easy (for a salaried professional) if you stop trying to impress your friends and neighbors with your purchases, realize you dont need the latest tech toys, and even (gasp) realize that maybe you should be renting, not buying a house, during the collapse of the biggest housing bubble ever.
Socialism: a lie told by totalitarians and believed by fools.