May 01, 2011
The St. Petersburg Times just released an interesting article on the history of Absolute Poker (hat tip to Bill Rini). The article is worth a full read by anyone interested in online poker, and serves as a cautionary tale regarding the behind-the-scenes machinations that many online poker players seem more than happy to ignore so long as the money keeps flowing. Four highlights:
- Despite publicly proclaiming that their site and the underlying financial transactions supporting the site were fully legal, once the UIGEA was passed, Absolute Poker sent home most of its American workers, told American senior executives they could not return to the U.S. if they continued working, and set up a series of multinational financial transactions intended to shield American investors from the taint of illegal gambling proceeds (even telling those American investors they could not hold any direct interest in the company). These actions are hardly consistent with running a fully legal business.
- The sale of the company to Tokwiro Enterprises, part of the effort to dissociate the American owners from the poker business, is rather sketchy, considering that the owner of Tokwiro Enterprises was Joseph Tokwiro Norton, a former grand chief of the Mohawk Tribe of Kahnawake. As most poker players are aware, the Kahnawake tribe licensed Absolute Poker and its sister company, Ultimate Bet, and investigated both the Absolute Poker "Potripper" scandal (which directly implicated founding co-owner/operator Scott Tom along with his friend and fellow Absolute Poker executive AJ Green) and the Ultimate Bet "superuser" scandal (involving part-owner Russ Hamilton among others). Also of note, Absolute Poker's servers were apparently hosted on servers owned by another of Chief Norton's companies. Chief Norton had established the Kahnawake gaming commission, giving him great influence over the regulators overseeing Absolute Poker and Ultimate Bet. Nothing better than having the fox guarding the hen house!
- Following the cheating scandals at Absolute Poker and Ultimate Bet, the companies secretly built duplicate servers and moved their operations from Kahnawake to Antigua (where they continue to operate today as part of the Cereus network). This was apparently engineered by some of the original founding American owners who supposedly no longer owned or operated the companies.
- As recently as 2009, Scott Tom was apparently still involved in the operation of the companies, despite his involvement in the Absolute Poker scandal (Tokwiro Enterprises combined Absolute Poker and Ultimate Bet into the Cereus platform in December 2008, so it seems clear that Scott Tom and Chief Norton were still involved in the companies for that critical transaction). It remains unclear from this article whether Tom had any connection to the company after the sale of Absolute Poker and Ultimate Bet to Blanca Gaming and the transfer of operations to Antigua in 2010, though the article intimates that Tom and other original founding owners are still calling the shots, likely from behind the shield of several corporate layers. Nat Arem's comment from late 2007 seems particularly prescient: "Scott Tom probably owns something multiple levels/shell companies removed from the actual AP organization, but I really don’t care how it’s legally structured. If he’s receiving income from the operation (and I don’t see any reason why he wouldn’t be), then he’s an owner."