Gunning for Cheats
Two online poker regulars uncover a scam fleecing unsuspecting players of millions of dollars.
From the Print Edition:
Daniel Craig, November/December 2008
David Paredes put himself through law school by playing online poker. After landing a plum job in the financial sector, he continued to play, and profited nicely. Despite viewing Texas Hold'em as an avocation, Paredes soon dominated some of the highest games on the poker site UltimateBet.com.
During a good month, he'd win $100,000. If things went horribly wrong, he'd drop $30,000—nothing too earth-shattering. But after blowing $150,000 in August 2007, he understandably felt a little stung. To make matters worse, Paredes lost to an opponent who played like a stone-cold fish and seemed eager to blow off his chips as efficiently as possible. Logged in under the name NioNio, he played a weak style of poker: way too loose, way too aggressive. It was a recipe for disaster. Long-term, it seemed virtually impossible for NioNio to win. Paredes figured that the guy had gotten obscenely lucky against him.
Chatting online with another high-stakes internet poker wizard, a player who goes by the name trambopoline, Paredes bemoaned his recent spate of losses. Trambopoline had similar experiences—and similar results—against NioNio on UltimateBet. Joining forces, the two players decided to delve deeper into NioNio's play. "I'm a big proponent of using statistical analysis to get better," says Paredes. "So I suggested that we go to the software."
Employing a program called PokerTracker, he and trambopoline were able to see 3,000 hands that they had played against NioNio (too small a sample to prove anything definitively, but big enough to provide some answers as to what was happening). On one level, it promised to be an intellectual exercise; on another level, there was a small chance that NioNio was doing something special, something that the high-stakes players could learn from.
As they scrutinized the hands and took apart NioNio's strategy, unusual patterns emerged. "He was playing 65 percent of his hands and raising 35 percent of the time," explains Paredes. "Most good players play 25 percent of their hands and raise 18 percent of the time. It may be impossible to win by playing as loosely as he was. He was winning 75 big blinds per hour. Most good players would be happy to win five."
Clearly, more scrutiny was warranted. So the players analyzed specific hand histories and individual pots. Here's where it got really creepy. "Every time trambopoline had a good hand, NioNio folded," recounts Paredes. "Often when trambopoline bluffed or was on a draw, NioNio re-raised. He check-called on [his own] draws." NioNio was either uncannily skilled at reading online opponents, incredibly lucky or doing something more sinister.
The more sinister scenario seemed glaringly possible in light of an incident that had taken place months earlier on a site called AbsolutePoker.com, which is owned and managed by the same entity as UltimateBet. A tournament player seemed to be operating with an extraordinary degree of luck, cleaning up in the events and doing it so aggressively that he called a lot of attention to himself. It became clear that he had some kind of backdoor entry into AbsolutePoker, and was able to see his opponent's cards. That player's run lasted six weeks. Absolute refunded money to people who were cheated (the company paid out $1.6 million, awarding the victims twice the amount of their losses) and the perpetrator, at the time a consultant of Absolute with some managerial responsibilities, was neither prosecuted nor exposed. In exchange for anonymity, he explained to Absolute executives how he did what he did, and he assisted in finding players who had been victimized.
The perpetrator of that scam was clumsy and greedy. NioNio, on the other hand, if he was cheating, did it in a cagey way. "Sometimes he would call with the worst hand," says Paredes, who believed early on that something was amiss. "The Absolute guy always raised or folded on the river."
Paredes and trambopoline posted their findings on twoplustwo.com, a bulletin board frequented by online players. (It's the Internet entity of the respected book publisher 2 + 2, co-owned by renowned poker theoretician David Sklansky.) Both Paredes and trambopoline are frequent posters to the site, and they have high credibility among online poker players.
On January 8, 2008, when their suspicions went up on the site, they expected at least a show of curiosity from fellow players. Instead, as Paredes puts it, "We got ripped by the community. They thought we were crying over spilled milk. People pointed out that NioNio lost some hands. I now think he had to call sometimes with [inferior holdings] so it wouldn't look like he was folding [good hands that happened to be second best]."
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