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Kahnawake Gaming Commission appoints investigation team

29 Jul 2008

In an effort to eliminate confilicts of interest and rehabilitate its image, The Kahnaw√°ke Gaming Commission (KGC) has appointed an independent monitor to investigate Tokwiro Enterprises ENRG, the parent company of Absolute Poker and UltimateBet. Former New Jersey State Gaming Regulator Frank Catania will spearhead a probe into the recent cheating scandals at UltimateBet and Absolute Poker, including what role, if any, Tokwiro Enterprises played in the scandal. The owner of Tokwiro Enterprises is Joe Norton, former Grand Chief of the Kahnaw√°ke.

The most recent cheating allegations at UltimateBet, which first surfaced in January, marked the second time in less than a year that a Tokwiro property has had to investigate unfair play at of its poker rooms. In January, the KGC fined Tokwiro's Absolute Poker $500,000 after it was revealed players with "superuser" accounts that could see hole cards of opponents had cheated. And this past May, UltimateBet's owners, Tokwiro Enterprises ENRG, admitted UltimateBet's security had been breached by former employees and accounts with access to opponent's hole cards were used to cheat in high-stakes games.

"The investigation has concluded that certain player accounts did in fact have an unfair advantage, and that these accounts targeted the highest limit games on the site," UltimateBet said in a statement. "The individuals responsible were found to have worked for the previous ownership of UltimateBet prior to the sale of the business to Tokwiro in October 2006. Tokwiro is taking full responsibility for this situation and will immediately begin refunding UltimateBet customers for any losses that were incurred as a result of unfair play. "The fraudulent activity was enabled by unauthorized software code that allowed the perpetrators to obtain hole card information during live play. The existence of this vulnerability was unknown to Tokwiro until February 2008 and existed prior to UltimateBet's acquisition by Tokwiro in October 2006. Our investigation has confirmed that the code was part of a legacy auditing system that was manipulated by the perpetrators. Gaming Associates, independent auditors hired by the KGC, have confirmed that the software code that provided the unfair advantage has been permanently removed." In separate press releases in June and July, UltimateBet admitted that more accounts than were originally announced in May were part of the cheating scandal, and moved to refund money to affected players.

Below is a complete transcript of the KGC's response to the unfair play at UltimateBet:

KAHNAWAKE, Canada -- (PRESS RELEASE) -- Effective immediately, the Kahnawake Gaming Commission (KGC) has appointed an independent monitor, led by former New Jersey State Gaming Regulator, Frank Catania, to investigate the KGC Licensee, Tokwiro Ent., parent company of both Absolute Poker and Ultimate Bet. Mr. Catania is a former Director of the New Jersey Division of Gaming Enforcement (DGE), the regulatory and enforcement agency responsible for maintaining integrity and trust in all Atlantic City gaming operations.

As division director, he was a driving force in updating the New Jersey Casino Control Act by fine tuning the balance between regulatory necessity and economic stewardship. After leaving the DGE, he served as the vice president in charge of compliance for Players International, Inc. where he was instrumental in resolving compliance issues the company had encountered in the State of Louisiana, prior to his appointment. He is a principal in Catania Gaming Consultants and the Law Offices of Catania & Associates LLC The Independent Monitoring Team will be given the task of completing a full forensic audit/investigation of the online gaming business of both licensed entities.

The main purpose of the investigation is to ensure that the games offered to the public are fair and honest and that all player protections as required by the Kahnawa:ke Gaming Regulations are being complied with, without exception. The monitoring team will also be charged with verification that all those involved in the fraudulent activities in any manner, no matter how slight, have been or are removed from the licensee company and verify that Ultimate Bet and Absolute Poker have submitted to full compliance with the directives issued by the KGC and recommended by the independent monitor.

Furthermore, Mr. Catania's team will be empowered by the KGC to have full access to interview all employees, past or present, review all records, contact and interview all sub contractors and individuals whom the monitoring team believes necessary. Any failure by the licensees could result in immediate revocation of their license privileges with the KGC. In the event that any criminal activity is found to have occurred, such activity will be reported to the appropriate authorities for possible prosecution. KGC License Holder, Tokwiro Enterprises has agreed to comply fully and submit to this independent monitor.

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