Do we really know that online poker is on the level? I.E., not rigged

[DING-DONG YO]

This is not a post about anything that players do (bots, collusion) but whether or not the site provides a fair game (fair shuffler, RNG, a site’s own bots, etc.). Please keep your replies focused on this.

Now before I begin, let me say that I do not think for 100% that it is rigged. But I do think that there is a reasonable possibility that something is going on and the games are not completely on the level. There is enough uncertainty about these online poker entities that I can’t personally see how a reasonable person would not, at a minimum, acknowledge the possibility.

Let’s take a very careful approach to this question. Look at it how an investigator looks at whether or not a crime has been committed. To commit a crime you need two things.

1 – Motive

2 – Opportunity

<u>MOTIVE</u>

Let’s discuss motive first. The most often cited argument for a lack of motive is:

“The sites make so much money off rake, why would they want to risk that by rigging the games?”

(Ignore the idea that they might get caught for a moment. We’ll discuss that when we get to opportunity.)

I do not agree with this statement. The sites could obviously make even more money by rigging the games. Ignoring whether or not they would get caught for a moment, their motivation to rig a game is there. The more games going on, the more money a site makes in rake. The longer a site can keep each player playing and depositing, the more games they’ll have going on. Therefore, don’t let the fish get cleaned out too fast. Keep them around, allow them to think they’re good players. As for the sharks, they’ll mostly equate their losses to variance, bad beats, etc. As long as they see bad play, they’ll keep coming back regardless of the outcome.


<u>OPPORTUNITY</u>

Look at the second half of the sentence above, “why would they want to risk that by rigging the games?” Assuming a site had made the decision to offer a less than fair game, the next step would logically be to assess their risk of getting caught, the opportunity to commit the crime. If the risk of getting caught is high, then the statement above (“The sites make so much money off rake, why would they want to risk that by rigging the games?”) is 100% true and all online poker should be fair. But if the risk of getting caught is low, which I think it is, then the environment is ripe for a crime (rigging a game) to be committed.

I think the risk of a site getting caught rigging the games is low for the following reasons:

1 – Who polices/audit the games on these sites? I know some of these companies are audited by some of the big 4 accounting firms. But remember, that is only the Company’s financial statements that are audited by the firm. The auditor is checking to see if their financial statements are materially accurate only. It is unlikely that a financial statement auditor would expand the scope of that audit to include operational items like a RNG unless specifically engaged by the Company to do so. (Aside: interesting how party gaming is audited by PriceWaterhouseCoopers for UK listing purposes but Itech labs verifies the RNG. Why not have PWC perform all the work? PWC is an international firm that undoubtedly has subject matter experts in this area)

Most of the sites have contracted other parties to assess the integrity/fairness of the games. First off, I have been able to find very little information on these companies. For instance, Itech labs issues a certificate on a somewhat official looking letter verifying party gaming’s games. Has anyone been able to find out any detailed information on Itech labs? I spent a half hour searching for information on the Company and all I found were links to their website and party poker’s website.

And what work does Itech labs perform as a basis for their opinion? This is also something that I have not been able to find. Is their audit adequate? What qualifies this Company to know enough about this industry to issue their report?

How is a certificate from some Company I have never heard of and I can’t find any information on supposed to give me, the player any kind of comfort level?

2 – How hard would it be to fool an auditor? Trust me, it isn’t as hard as you think. The frauds committed at Enron/WorldCom/Healthsouth/Tyco were not near as complex as rigging a RNG and they went undetected for years.

For example, say you have a not so random number generator. Then you hire a Company to come in and verify that RNG. How hard would it be take the rigged RNG out of production during the audit and replace it with a real RNG, then put the rigged RNG back in place after the audit is over and you have your clean certificate?

3 – No way they could keep the rigged games a secret for long. If a game was rigged, why would more than a very small number of people within the Company know about it? The only people that would need to know would be the development team and maybe 1-2 very high level execs. Probably 10-15 people tops. Letting any more people know would be unnecessary and would only increase the risk of getting caught. Also, at the Enron/WorldCom/Healthsouth/Tyco frauds, a very small number of people were aware of the fraud. That is a big reason why it was able to go on for so long.


Again, I’m not trying to say that online poker is rigged. What I am saying is that I can’t say with any level of confidence that it isn’t. I have been surprised at how most of the posters here seem to dismiss out of hand any idea that a site is rigged. As I said above, how can one not, at a minimum, acknowledge the possibility?