The UltimateBet Super-User Scandal: Part I

Part I of how Russ Hamilton masterminded the UltimateBet super-user scandal...

Editor’s Note: About a month ago, we received a list of names of people connected to the UltimateBet super-user cheating scandal. Much of that information can now be found on 2+2 here.

Since then, we received substantial and substantive information that helped validate some of the data that appears in those documents, while disproving other data. We conducted a wide-range of interviews with well-informed sources connected  to the investigation, high-level and connected industry figures, and  high-stakes poker players that had varying degrees of knowledge (ranging from  “intimate” to “was directly cheated by Russ Hamilton”)  about the scandal.

Eventually, a consistent story formed about who built the super-user cheating software, who else might have known about the cheating scam, and who exactly were the super-users.

Some of this information has, in some shape or form, been discussed through great investigative work by the likes of Nat Arem, Haley Hintze, and others. Some of it has not. What we are doing here is connecting the dots to tell the story of how Russ Hamilton pulled the strings to develop a super-user “tool” that cheated friends, associates, and UltimateBet customers out of millions of dollars.

The Story of Russ Hamilton

“…a bully.”
“…a liar…”
“…a cheat…”
“…the worst hustler and golf prop better ever…I’d bet against anybody in golf except Russ.”

Having left Detroit’s underground games behind at the age of 36, Russ Hamilton had been a successful blackjack and poker player in Las Vegas for years. But it wasn’t until he won the 1994 World Series of Poker Main Event that the gambling world really took notice.

1994 was the 25th anniversary of the WSOP. The silver anniversary. Jack Binion, a cunning marketer whose family-owned Binion’s Horseshoe and the WSOP at the time, had pledged that whoever won the WSOP Main Event that year–along with the $1,000,000 first place prize–would receive his weight in silver.

Russ Hamilton won the 1994 WSOP Main Event. He weighed 360 lbs.

Despite banking $1,000,000 and already clocking in at 360 lbs, when he stepped on the scale to be weighed, he stuffed his pockets, trying to get even more of Jack Binion’s silver.

He laughed it off years later. But regardless, no matter how much he had, it always seemed like Russ Hamilton was angling for ways to get more.

Russ Meets UltimateBet’s Founders

In 1999, five years after Russ Hamilton won the WSOP Main Event, Greg Pierson and Jon Karl formed a company called ieLogic. Eventually, Greg Pierson spun off a company called Iovation from ieLogic, and became its CEO. Iovation would eventually become UltimateBet’s software provider.

Like any new company, ieLogic/Iovation needed money. Enter Russ Hamilton.

Russ was, by all accounts, successful in his business ventures. He was also known for investing in poker-related businesses. Greg was a tertiary figure in the poker scene, but he played, and he came to know Russ.  Eventually, Russ became the “money man” to Greg Pierson and Jon Karl’s business.

It is rumored that another former WSOP Main Event winner who was very close to Russ, Mansour Matloubi, was brought in financially from the out-set as well1.

In this arrangement, as noted, Greg Pierson took the CEO role and was more or less the technology lead. Jon Karl was head of business development. Russ Hamilton took on a consultant-like role (although he was an owner of eWorld Holdings, which  established a “reverse licensing” agreement with ieLogic). And Mansour Matloubi lived in Thailand, doing who knows what.

Like Russ, all of the sources we spoke to who personally knew Greg Pierson now describe him as a “cheat,” a “liar,” and even a “giant douchebag.” Greg though could apparently make a good first impression on people, and even forged friendships with two of UltimateBet’s key public personalities: the WSOP’s all-time bracelet winner Phil Hellmuth, and the world’s most well-known female poker player, Annie Duke.

Greg was so good at making impressions, Hellmuth would eventually go on to say this about him: “Greg Pierson is the man! No, you haven’t heard of him yet, but mark my words: GP’s new company, Iovation internet security company, will have a billion dollar evaluation by 2008…” and went on to note how much “respect” he had for Greg.

Annie was an acknowledged close friend of Greg’s at UltimateBet’s inception as well.

However, neither Phil nor Annie now has regular contact with Greg Pierson.

While opinions on Greg have transformed over the years, most everyone we spoke with that knew Jon Karl still describe him as a “square, stand-up” guy, “reserved and likable,” and someone “not capable” of cheating people (three very well-connected people said they would be “totally shocked” if Jon was involved in any way).

Regardless of opinions, Russ, Greg, and Jon plowed ahead2, launching UltimateBet in 2000 and creating one of the initial powers in the online poker industry.

Russ and Greg Play God

There are conflicting stories with how the UltimateBet super-user cheating “tool” came into existence. Or more specifically, why it came into existence. In talking to our sources, one camp believes that it was originally intended–from the outset–to be used for cheating. Another camp believes the initial intentions, at least, were not nefarious. What was agreed upon though is that only a small number of high-level, connected people within UltimateBet knew about the tool at all, and the story they spun to get the tool created would ultimately lead to the worst cheating scandal in online poker history.

According to our sources, Russ Hamilton told people he believed there was a high-stakes player cheating in his online poker room.

Russ asked Greg Pierson to have his team develop a “tool” that would allow him to see hole cards and catch the cheater. Greg then had his tech team create this “tool.”

However, an internal source involved with UltimateBet at the time told us a few of the higher-ups there believed there could be some potential moral consequences in even creating such a tool. Because of this, a delay was put in place (from 30-second to five-minutes in length3) to ensure that the tool couldn’t eventually be manipulated for active, real-time use.

As concerns grew over its existence, our sources said that it was agreed upon by upper-management that there would be no version updates to the tool, effectively making it obsolete and unusable when UltimateBet software was updated.

As far as many knew, that was that, and the tool was put out of use.

However, our sources say, Russ came back to Greg, more determined to “catch the cheat” on the site, and asked for the tool to be updated without a delay. Greg hired an independent contractor to update the tool without a delay–something that internally came to be known as going into “God Mode.”

We were told God Mode worked like this: the tool couldn’t be used on the same computer that someone (in this case, we’ll say Russ) was using. Someone else would need to log into UB and turn the tool on. That person could then see all hole cards on the site–and then feed the information to Russ as he played.

Of course, it’s very possible someone could set up two computers side-by-side and just look at the hole cards on one monitor while playing on another.

Whatever the case may be, one thing in talking to our sources is clear: Russ had access to this tool, Greg Pierson knew it was developed and was being used by Russ, and starting around May 2004, it started being used not to catch cheats on UltimateBet–but to actually cheat players on the site.

Coming in Part II, how–and who–created the accounts and who used the tool…

1. No source we spoke with could confirm that Mansour was anything other than a shareholder in ieLogic/Iovation. But ones connected to UltimateBet’s launch all believe that he was among the original money in the company.

2. We attempted to contact both Greg Pierson and Jon Karl for their comments, but they did not respond.

3. We have two sources that agree a 3o-second delay was put in place on the tool and one that says a 5-minute delay. However, while the time of the initial delays vary, what remains consistent is that Russ Hamilton requested that the tool be created, and Greg Pierson had it made.

 

20 Responses

  1. skunk puddle

    June 15, 2010 6:39 pm, Reply

    Hey unless Dan Harrington is involved you should take his name and picture off this story. You know how internet rumors start.

  2. V12CL

    June 20, 2010 10:00 am, Reply

    I want to see Greg Pierson’s head on a stick. I read awhile back, he was working on something with Intel. I am guessing that deal is dead, and Greg is sitting on an island somewhere?

    Where is he, and how can we get him?

  3. Steve

    August 10, 2010 2:17 pm, Reply

    Not that it really matters, but the link you guys provided doesn’t say that Russ stuffed his pockets to get more silver. That was a joke someone from the crowd made, but in actuality, he actually accepted less silver because he was too embarrassed about his weight.

    From the article (which is a pretty good read):

    “When Jack arrived, he got the report that Russ weighed 330 lbs! The scale brought in for the awards ceremony only went up to 300 lbs. After Russ won the title, with the world’s poker media gathered around, he got up on the scale to weigh in and the scale went “Clunk,” right to the floor! A voice came from the audience, “What do you have in your pockets Russ, rocks?” Everyone got a good laugh out of the unfolding scenario, including good-natured Russ. The silver bars used to counter his weight fell way short, and a lot more had to be brought in to balance the scales. Besides the $1,000,000 in cash, Russ collected 43 bars of silver that added up to an additional extra $28,000. This was quite a nice bonus.

    Russ told me when I interviewed him last week, “Tom, I only told Jack I weighed 330 lbs., but the truth was in those days, I really weighed 360 lbs.! I was too embarrassed to admit it, though, so I probably cost myself some money!”

  4. mahituna

    June 16, 2014 4:02 pm, Reply

    love people defending this scumbag, he was a cheat, got caught. no rumor about it at all. Russ is 300lbs of human shit that should get run over one day

  5. Micki

    July 12, 2014 5:47 pm, Reply

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