Players Gamble on Honesty, Security of Internet Betting

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From Wall Street to Online Poker

David Paredes, 29, a Harvard graduate and lawyer turned hedge fund employee began playing online poker around 2004. "Live poker is much slower," Paredes says, comparing live poker with online play. "I can probably play 30 hands an hour live, whereas if I'm six-tabling online I can probably get somewhere in the neighborhood of 500 to 600 hands an hour."

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"It was probably pulling in between $150,000 and $250,000 a day," estimated Bobby Mamudi of the Gaming Intelligence Group, which tracks worldwide gambling issues from England. Hundreds of customer service employees worked at its office in a mall in San Jose, Costa Rica, and at a smaller office in Panama.

Generally, Internet poker is divided into two types of games: cash games in which winners collect the money on the table, just as in a live casino game, and tournaments in which players put up an entry fee and the winning pots are divided based on play. A key difference is that games are played on computers, not face to face. Players cannot see one another to gauge expressions or tics. The online style of play is also faster and more aggressive than that of live games. Some players may have four or five games going at once. Poker sites use a variety of payment methods, including prepaid debit cards, electronic transfers and bank wires.

In addition to tournament fees, Internet poker sites make money from advertising and by taking a small percentage of the pot, called a rake. The rake can be as little as pennies but adds up over millions of pots, industry analysts say.

One of the regulars at AbsolutePoker was Witteles, a former computer scientist whose screen name is "Dan Druff." At 36, he jokes that he is often the oldest player in Internet games. "It's a very young crowd," he said. "Most of them are in their early 20s."

Witteles said he plays almost exclusively in cash games. When he squared off against Greycat in 2007, it was to play Texas hold 'em, currently the most popular poker game, in which bluffing is critical. "So if the other guy can see your cards," Witteles said, "it's a real disaster. I quickly got slammed for $6,000."

Witteles waited for Greycat's luck to run out. But he continued to make one unlikely winning bet after another. Witteles's losses mounted to $15,000. Although frustrated, he didn't yet suspect cheating. And had Greycat not taunted him -- ridiculing his skills in the game's instant-message box -- Witteles said he might have gone undetected. "There was a real arrogance and vindictiveness to the thing," he said.

It is not uncommon in Internet poker for other players to follow the games. Some started to post comments on a popular poker forum about Greycat's improbable winning streak and several other suspicious accounts on AbsolutePoker. Witteles wondered whether Greycat somehow had access to a "superuser" account, which would allow him to use the site's software to spy on his cards. But when he complained to AbsolutePoker, Witteles said, "I got a different story every time."

A few weeks later, in September 2007, a 21-year-old player named Marco Johnson paid $1,000 to enter a tournament sponsored by AbsolutePoker. Johnson, who uses the screen name "Crazy Marco," reached the final against a player called "Potripper." They played 20 hands and Potripper won them all, collecting $428,520.

At first, Johnson shrugged off the loss. But others watching the final games online insisted that he, too, had been cheated. Johnson requested his hand histories for the games. Poker sites generally promise to keep players' archives for as many as five years.

A few days later, Johnson received a confusing Microsoft Excel spreadsheet containing 65,000 lines. At first, he set it aside.

Armchair Detective

While players heatedly debated Potripper's play in poker forums, the management at AbsolutePoker released the first of several statements denying the cheating allegations. "While we are continuing with our investigation, we have yet to find any evidence of wrong doing," the first statement said. "A super-user account does not exist in our software," stated the second. "Absolute Poker remains a 100% secure place to play."

Players continued to attack AbsolutePoker in online forums, complaining that they could not get answers to their questions or tell who owned the site. A few frustrated players decided it was time to start their own investigation.