BATTENING DOWN THE HATCHES (Update)

28 November 2008

Tokwiro briefs employees on Sixty Minutes program

 

Paul Leggett, the COO of Tokwiro Enterprises, was busy midweek briefing employees on the upcoming Sixty Minutes television expose of the Absolute Poker and UltimateBet scandals and the online poker industry in general (see previous InfoPowa report)

In a memo to employees, Leggett did not sound optimistic, writing that he had "every reason to believe that the 60 Minutes producers are intent on portraying the online poker industry and our companies in a negative light, and we do not expect that the program will be either fair or balanced."

Leggett is referring to the upcoming screening Sunday (November 30th) edition of the Sixty Minutes program, the result of a four month collaborative investigation by top producers and investigative reporters at the Washington Post and CBS's Sixty Minutes team. The program is expected to examine the scandals and how players were treated in detail, and apparently interviews a number of poker personalities involved in the affair.

Tokwiro representatives will not be among those appearing on camera, however. Leggett's memo says that although the company cooperated in responding to requests for information, a high level decision had been made not to be interviewed.

"Because of 60 Minutes’ apparent bias against Tokwiro and online poker, we have decided not to appear on camera," Leggett advises in his memo. "We have, however, had many conversations with the program’s producers. We provided them with extensive background materials and documents, and we answered questions on-the-record, but off-camera. Despite all this, it is not likely that our views will be properly represented.

"Therefore, it is important that all of our staff know the following facts about our company:

* Tokwiro Enterprises, ENRG, is the full and sole owner of both Absolute Poker and UltimateBet. Joseph Tokwiro Norton is the full and sole owner of Tokwiro Enterprises.

* Incidents of cheating at both Absolute Poker and UltimateBet were fully reported and investigated by Tokwiro, by the Kahnawake Gaming Commission, and by third parties engaged by Tokwiro and the KGC.

* As soon as Joe Norton realized that cheating had occurred, he took immediate and appropriate actions.

* The KGC’s investigators have acknowledged that Tokwiro, as a corporate entity, was not involved in and did not benefit from the cheating.

* The date range, financial extent, and methods used in the cheating are now known and understood.

* Tokwiro agreed not to prosecute the perpetrator in the Absolute Poker cheating, and to protect that individual’s identity, because this was the only way to ensure that the ability to cheat was fully discovered and disabled. Because of this decision, AP could continue operating and begin to reimburse affected players as quickly as possible.

* Tokwiro has no interest in protecting or shielding the cheater in the UltimateBet incident in any way. We vigorously pursued the Company’s legal options in this case, and won a $15 million settlement from the previous owners. The alleged cheater, who was named in the September 2008 KGC statement, has never been an employee of Tokwiro; nor has he been an employee of AP or UB since our purchase of these companies.

* The perpetrators in the Absolute Poker and UltimateBet incidents were different individuals who were not working in concert, and who used completely different methods to cheat.

* We have now completed all reimbursements to affected players. Everyone, who was a victim of these schemes, has now been made whole. We have paid out millions of dollars to customers who were cheated.

* We should also be mindful of the fact that we have taken a series of actions that are designed to ensure that this kind of cheating can never again happen on our sites. You are well aware, I am sure, of many of these, but 60 Minutes may very well ignore them in its program."

Leggett goes on to itemize the Tokwiro initiatives that have flowed from the scandals, writing:

"Joe Norton completely restructured the management team as soon he became aware that cheating had occurred on the AP site. The new team brought in a Compliance Officer and two Security Managers, and it established risk assessment procedures and ongoing internal audits."

Other moves included the development of a new Security Centre that incorporates gaming statistics, new security software, and human analysis and oversight to catch and prevent potential cheating. UB and AP have been moved to a common software platform, Cereus, which Leggett claims will facilitate monitoring of the system and tracking of any suspicious activities.

"We have also established a new, specialized Poker Security Department, in addition to the existing general security department, and hired outside gaming industry analysts to do a full audit of all software code and internal practices, and to make recommendations about best practices," he continues. "We instituted a Whistleblower Policy to formally protect Tokwiro employees and contractors who report any suspicion of cheating. We developed a Code of Ethics that formally prohibits any employee or contractor for any Tokwiro business from playing for money on any Tokwiro site.

"We discontinued the policy of “greenlighting” VIP Pro players at cashout, and we have forbidden account name changes except under very specific circumstances (such as abuse in a chat room).

"Because of the actions we have taken, Absolute Poker and UltimateBet are now two of the safest places to play poker online, and we are committed to keeping them that way. We believe that our loyal customer base will understand this, even if 60 Minutes does not.

"Regardless of how the 60 Minutes producers may choose to slant their show, we at Tokwiro are confident that we have acted with diligence and transparency in addressing these crises, and we will continue to do so," Leggett claims, directing employees to a YouTube corporate interview produced by Tokwiro in which he answered questions about the company and its operations, and to his personal UltimateBet blog.

Leggett concludes by acknowledging the tough time the company has endured and thanks employees for their support.

"This last year has been a difficult one for our Company," he writes. "We – both our customers and our employees – have been the victims of not one, but two, sophisticated fraud schemes that have cost us millions of dollars and have tarnished the hard-earned reputations of our stellar brands. Joe and I want to thank each and every one of you, our valued employees, for your commitment, trust and confidence. Because of you, I firmly believe that we have emerged from these trials as a stronger, more focused and more secure company than ever, ready to provide an unequaled poker experience to our thousands of loyal customers."

News of the Leggett memo broke at around the same time as the mainstream Canadian newspaper the Toronto Sun published yet another summary of the UB and AP debacles in advance of the Sixty Minutes program at http://www.torontosun.com/sports/othersports/2008/11/25/7535196.html.