The results of a four-month investigation by 60 Minutes correspondent Steve Kroft, producer Ira Rosen, and The Washington Post's two-time Pulitzer Prize-winning reporter Gilbert Gaul will appear this Sunday, November 30, at 7 p.m. EST/PST on 60 Minutes.
The collaboration by the two news organizations reveals how online poker players suspecting cheating were forced to successfully ferret out the cheaters themselves. That's because managers of the mostly unregulated $18 billion Internet gambling industry failed to respond to their complaints.
"He was raising, just really, really bad hands against very good hands. He seemed to play crazy," says Todd Witteles, a computer scientist turned poker player who believed he was losing too much to the same person. "It seemed like he was giving his money away. Except the only thing was, he wasn't losing. He was playing in a style that was sure to lose, but he was killing the game day after day," Witteles, who played a key detective role, remembers.
Michael Josem, a player and a computer security expert, plotted the odds of such consistent success. "We did the mathematical analysis to find that they were winning at about 15 standard deviations above the mean...approximately equivalent to winning a one-in-a-million jackpot six consecutive times."
The cheating, which netted the cheaters more than $20 million, occurred on two of the Internet's most popular sites, Absolute Poker and Ultimate Bet. The two sites operate out of a shopping mall in Costa Rica and run their games on computer servers housed on an Indian reservation outside of Montreal. They are licensed by a Mohawk tribe that has no background in casino gambling, a tribe that previously made the majority of its money selling tax-free tobacco.
Though such gambling is illegal in both Canada and the U.S., the betting laws in those countries have no jurisdiction on the sovereign reservation.