Ultimate Bet is arguably the most-scandalous online poker site in history. They comprised everybody’s worst fears about gambling sites, from cheating to stealing customers’ money. Ultimate Bet (a.k.a. “UB”) went offline in December 2011 – seven years from this very month. Despite being gone for seven years, UB Poker still serves as a painful reminder of online gaming’s ugly side.

Luckily, most internet gambling sites are reputable operations that value their customers and repeat business. But it’s still good to remember the lessons that Ultimate Bet taught about vetting gaming sites so you don’t get burned. I’m going to look at the 7 biggest lessons you can learn from the failed UB Poker and apply to future gaming sites you choose.

1 – Steer Clear of Gaming Sites with Murky Ownership

Ownership structure is one of the most-underrated aspects of picking a gambling site. It’s good to know exactly who’s in charge along with any important officers. Simply knowing the ownership and/or management hierarchy doesn’t guarantee that you’re dealing with a reputable site. But it at least improve the chances.

Only shady gambling operations try to keep their owners hidden from the public. This lessens the chances that they’ll deal with backlash from customers and potential legal consequences. A huge problem with Ultimate Bet is that it was hard to distinguish exactly who owned and ran the site. It was only in later years that the poker community began peeling back the layers to figure out who was behind UB.

Ultimate Bet was originally owned by a public company (discussed later). But this changed when the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed in 2006. The UIGEA prevents American financial institutions from accepting transactions involving unlawful internet gambling business. Ultimate Bet’s parent company, Excapsa, didn’t feel that they could survive without the US market.

Excapsa was delisted and sold to Blast-Off Ltd. The Malta-based Blast-Off was a subsidiary of Tokwiro Enterprises. This is just one of several examples involving Ultimate Bet’s muddled ownership over the years. The site’s roots can be traced to Greg Pierson and John Karl, who founded ieLogic in the 1990s. The Portland, Oregon natives originally planned to use their software to support massive-multiplayer-online games.

However, things changed when Pierson met 1994 WSOP champ Russ Hamilton during a poker trip to Las Vegas. Hamilton convinced him that ieLogic would be more successful by jumping into the budding online poker industry. Pierson, Karl, and Hamilton became early owners of Excapsa Software. Pierson later rebranded ieLogic to Iovation, which served as Ultimate Bet’s fraud prevention service and software provider.

UB came more into the public light when Excapsa was listed on the London Stock Exchange. This was a positive development for the company, given that many people were still leery of online gambling in the early 2000s. But the company’s legitimacy took a hit when it delisted and went private. Grand Chief Joe Norton of the Mohawk of Kahnawake (Montreal) was revealed to be the buyer a year later. Norton’s Tokwiro also owned Absolute Poker (another scandal-ridden operation) before purchasing UB. He merged both sites to form the CEREUS network in 2008.

Norton remained largely hidden within the company until he was forced to make a public statement in 2007. He’d been dealing with a cheating scandal at Absolute Poker and finally released his identity while addressing customers. The ownership twists didn’t end here, though, because Tokwiro was sold to Blanca Games in August 2010. Blanca wasn’t a different group, but rather a shell company used to protect Tokwiro’s owners from potential lawsuits and legal issues.

Yet another revelation was that Blanca/Tokwiro was trying to hide its major shareholders through a company called Madeira Fjord. The Norwegian-listed business held $250 million of Tokwiro’s debt. In return, they received a 12% annual dividend until 2009, when the payments suddenly halted.

All in all, there were too many shady and covert aspects surrounding Ultimate Bet’s ownership. The many attempts to hide the real owners definitely raised red flags. This is why it’s best to deal with upfront gaming companies whenever possible. If you can’t figure out who their owner(s) is after a five-minute Google search, then you’re probably not dealing with a reputable operator.

2 – Be Leery of Sites that Circumvent Federal Laws

Some poker sites, including publicly owned 888 and Party Poker, saw the UIGEA as a death knell for their US-facing operations and quickly vacated. These businesses had a strong enough European following to where they could still stay afloat. Privately run companies like PokerStars and Full Tilt Poker felt that they could continue operating in America. The UIGEA didn’t declare online gambling illegal, and PokerStars/Full Tilt didn’t have shareholders to appease. Excapsa was somewhere in between. They were a public company that needed to leave the US market. However, doing so would’ve bankrupted them considering their reliance on US players.

It’s at this point when Pierson met with Absolute Poker’s Scott Tom in late 2006. Tom launched Absolute in 2002 with funding from his father, Phil, and help from his University of Montana fraternity brothers. Absolute Poker was a private company and not as big as UB. But the two sides were still able to work out a merger deal, whereby they’d also sell a large portion to Norton.

Excapsa removed themselves from the London Stock Exchange so that Norton could buy them. Pierson, Hamilton, and other Excapsa owners profited off their $130 million sale to Tokwiro. UB Poker and Absolute initially operated separately. But Norton combined them in 2008 to form the CEREUS network.

Tom and his step brother, Brent Beckley, headed payment processing for the CEREUS network. They worked with crooked payment processors to circumvent the UIGEA and accept deposits from American players. Their work continued until April 15, 2011, when attorneys from the Southern District of New York indicted Tom and Beckley. They were among 11 individuals who were indicted through the events of “Black Friday.”

Going back to 2006, it’s obvious that Pierson and Tom would do whatever it took to keep their money train rolling. The end result was selling a large portion of their businesses to Norton. Tom and his step brother stayed on to help circumvent the UIGEA and keep serving American customers. However, they used dodgy methods to make it happen.

This leaves us with yet another lesson from UB/Absolute in that you don’t want to deal with sites that’ll evade the law just to make money. This has become less of a problem today, especially since gaming sites can now use Bitcoin to get around the UIGEA. But you should still make it a point to avoid gaming companies that are rumored to be breaking laws in any way.

3 – Public Companies Can’t Always Be Trusted

A company’s main goal when going public is to raise more capital and expand. But legitimacy is a nice byproduct of being listed on a stock exchange. Earlier I discussed how Excapsa benefited from being on the London Stock Exchange. This listing provided more confidence to customers at a time when online poker was fairly new. Of course, we have enough Enron and Lehman Brothers’ episodes to show that public companies aren’t always reputable. Excapsa wasn’t far off from the corruption that these corporations displayed.

Pierson was able to pull off the London listing. He hired CryptoLogic CFO Jim Ryan to head Excapsa and prepare the company for its IPO. As CEO, Ryan guided the company from January 2005 to November 2006. Ultimate Bet posted very good numbers during this time, which coincided with the height of the poker boom.

Excapsa Software went public in February 2006, helping Pierson, Hamilton, and other early investors get rich. But despite having a public listing, professional CEO, and good growth, the company was still heavily reliant on their American customers. The UIGEA popped Excapsa’s bubble and sent the company scrambling for a solution. They took the easy route by selling off to a private company that was willing to still serve Americans.

4 – Never Fully Trust a Site without Premier Licensing

Ultimate Bet launched on March 1, 2001 under licensing from the Kahnawake Gaming Commission (KGC). The license was issued to a shell company called eWorld Holdings (yet another weird ownership quirk), rather than the software provider and parent company Excapsa. The KGC would quickly become one of the most-popular jurisdictions for US-facing gaming sites that wanted legitimacy.

Online gaming was still very much a wild-west affair in the early 2000s. Therefore, a KGC license seemed as good as any. Of course, we now know that the KGC isn’t truly a premier licensing jurisdiction. It carries nowhere near the clout of authorities like the UK Gambling Commission (UKGC) or Malta Gaming Authority (MGA) today.

The KGC was exposed during the UB Poker cheating scandal. This incident arose when high stakes players lost at an accelerated rate to specific accounts like “NioNio” and “Nopaddles.” Losing players became suspicious that somebody had a “superuser” (a.k.a. god mode) account that allowed them to see everybody’s hole cards.

These suspicions were based on logic, given that a superuser scandal occurred at Absolute Poker just months before in September 2007. Absolute refunded $1.6 million to affected players after discovering that a high-ranking consultant cheated players via the superuser handle “POTRIPPER.” The KGC levied a light $500,000 fine against Absolute with no other punishment included. This was the first major sign that the KGC wasn’t the toughest judge on licensees. It also didn’t look good when former KGC founder Joe Norton revealed himself as Absolute’s owner.

Back to the brewing UB scandal, players vigorously complained to the point where Ultimate Bet conducted a half-hearted investigation. Their results concluded that superuser cheating had occurred from March 2006 to April 2007. March 2006 is also the point at which Excapsa performed a database update, which excluded results before this point. Tokwiro, meanwhile, was dealing with the scandal’s fallout as the current owner.

They offered affected parties a refund worth a collective $6.1 million. It later turned out that even this money was stolen from customer funds. The victims weren’t satisfied with the refund and continued looking into the matter. An Ultimate Bet whistleblower emailed one of the victims screenshots and other information on the superuser accounts. The info outed Russ Hamilton as the primary superuser.

The KGC dug into the matter and discovered that Hamilton (and possibly other UB employees) won an estimated $22.1 million through god mode. They also uncovered that the cheating dated back to May 2004, when Excapsa still owned the site. Tokwiro (via Blast-Off) sued Excapsa for $75 million over the cheating scandal and financial damages. Excapsa agreed on a $15 million settlement, which was put towards more player refunds.

To the KGC’s testament, they did a far better job of investigating than Ultimate Bet. The licensing jurisdiction even hired former New Jersey gaming official Frank Catania to investigate. On the other hand, the KGC only issued a $1.5 million fine to Ultimate Bet. They also allowed the poker site to continuing operating with no license suspension.

This doesn’t prove that the KGC is the world’s worst online gaming jurisdiction. However, they’ve never shown the same teeth as, say, the UKGC does today. The UKGC will fine sites millions of dollars just for predatory advertising. I can only imagine what they’d do to an online poker network that had insiders cheating players. This goes to show that you take your risk when dealing with gaming sites that don’t have premier licensing.

5 – Never Listen to Paid Gaming Shills

Ultimate Bet gained much of its early popularity thanks to Hamilton’s connection with famous pros. Hamilton worked these relationships to bring in star sponsored players like Phil Hellmuth, Annie Duke, Freddy Deeb, and Antonio Esfandiari. Hellmuth and Duke were the cream of the crop and were featured in many of the site’s advertisements. They in turn shilled the site as much as possible and stuck by UB after its cheating scandal. It was later revealed that they didn’t know a tremendous amount about the day-to-day operations. But Hellmuth did have a large stake in both Iovation and Ultimate Bet (even after the sale to Tokwiro).

Poker documentary maker “ElevenGrover” shared what he knew about Hellmuth’s ownership through a TwoPlusTwo post. Here are excerpts:

“The question arises then as to what Phil could have done in 2008. Beginning in May [after superuser scandal], he wielded a ton of power.

“[…] Phil could have said “OK, water under the bridge. But now, I’m not voting for any settlement where players don’t get at least 100 cents on the dollar with a full accounting.

“[…] I imagine Phil struggled with this, but we know what side he came down on and Pierson holding iovation ownership over his head prolly played at least some role. Bottom line, he was a terrible steward of the game who flinched when the game needed him most.”

In November 2009, Ultimate Bet rebranded to UB.com. They also began signing new pros to Team UB. Prahlad Friedman and Joe Sebok were the most-important new additions. Each was crucial to the site’s marketing efforts to lure customers back. Sebok was cast as a standup guy who wanted to change things at the scandal-ridden UB. Friedman praised the “new management” for settling with him as the biggest superuser victim (he was repaid $1m on a stolen $3m). This was all a mirage, though, because Tokwiro was still behind UB. The company merely lied to Sebok and Friedman to use their images.

Everything blew up in April 2011, when Black Friday exposed CEREUS’ bank fraud and money laundering. UB and Absolute Poker would both see their player bases reach zero before the end of the year. Not surprisingly, the network couldn’t afford to reimburse player deposits. CEREUS went offline in December 2011 while owing some $50 million to former customers.

Tokwiro had been dipping into customer funds for years, including part of what they used to pay back players affected by cheating scandals. Team UB members saw their reputations tarnished. Sebok expressed deep regret for representing the site, while Friedman dropped off the map for a few years.

Many accused Sebok, Friedman, Hellmuth, Duke, and other Team UB members of looking out for their wallets, rather than customers. They were also criticized for turning a blind eye to UB’s past history. It’s difficult to guess what each sponsored player did and didn’t know. But it’s likely that every Team UB member went against their better judgement in supporting the site.

6 – Don’t Buy Rebranding Moves from Bad Actors

Ultimate Bet’s rebrand to UB.com was an obvious attempt to separate themselves from the company’s shady past. They lost plenty of customers after the superuser scandal in 2008. Tokwiro’s hope was that rebranding, offering generous rakeback deals, and sponsoring popular pros would turn things around.

All of this worked to some extent. Merging Absolute’s and UB’s player bases in 2008 helped create more liquidity. But the network was still bleeding money due to the god-mode scandal. They’d stopped paying 12% annual dividends to Madeira Fjord in 2009, which indicated their poor financial health. The poker room canceled their annual Aruba live tournament event in 2010. This was an unpopular move that caused more players to leave the site. Hellmuth and Duke – both long-time Team UB members – severed ties with the company in late 2010.

By early 2011, CEREUS had already seen a large traffic decrease. Black Friday was the final nail in the coffin. Lesson learned: don’t trust a shady gambling site just because they’ve rebranded. It’s likely the same people running the company and trying desperately to recruit more future victims.

7 – Never Ignore the Warning Signs Before Depositing

Following Black Friday, the poker community shamed those who deposited on and lost their money at UB. The cheating incident and shell company ownership made it seem obvious that UB was sketchy.

But the site still had some qualities that attracted players before their shutdown. These aspects included:

  • 30% rakeback deal (or more for higher VIPs).
  • Soft player base (most serious players stayed away).
  • Rebranding & new management ploy.
  • Sponsored pros shilling the site.
  • Third-biggest player base in the world.

These factors convinced players to deposit onto UB despite the warning signs. But anybody who stayed too long eventually had trouble making withdrawals.

Black Friday eventually made it impossible to cash out, because CEREUS could no longer keep their ruse going. It was clear that the company was at the point of no return. Those who looked past the shills and rakeback deals saw this moment coming long before April 15, 2011. Players who ignored the warning signs, however, lost their money as a result.


UB Poker’s existence came to a close at the beginning of December 2011, when players reported the site being offline. Many customers had already given up hope on their withdrawal requests by then. This seemed like a fitting end for such a crooked poker operation. But a couple of interesting developments have come about in more-recent years.

First, tapes released by Travis Maker shined new light on the UB cheating scandal. Maker, Hamilton’s former righthand man, released the tapes to protect his reputation from being smeared. The private recordings feature Pierson, Hamilton, and their lawyers discussing how to deal with the scandal.

Their conversation reveals that superuser accounts were originally created for testing purposes. However, Hamilton used the accounts to bilk players out of what he estimates to be between “$16 and $18 million.” He mentions how he has no plans to pay any of the money back. Hamilton believes that he was owed the stolen funds due to non-reimbursed investments he’d made into Excapsa.

Pierson is heard devising a cover-up story along with how they could get away with only refunding players “$5 million.” The second development included the US Department of Justice issuing surprise refunds to former customers in 2017.

The DoJ refunded former CEREUS players over $38 million. This amount is around $0.75 on the dollar from what former CEREUS players lost. These refunds provide a somewhat happy ending to those who were robbed. Nevertheless, it’s still important to keep the lessons of Ultimate Bet in mind. After all, there’s usually no large refund waiting in the wings after a gaming site rips everybody off.

Related Articles
Leave Your Comment

Your email address will not be published. Required fields are marked *