The Absolute Poker brand will always be associated with the biggest scandal in the history of the online gambling world.
However, the history leading up to the company finding themselves all over the news is also just as interesting and scandalous.
We are going to give you all the details on the site, their founders and how they burned fast and bright until they finally got caught up in their own fiery blaze.
Absolute Poker Fast Facts
Site Launched: 2003
Site Closed: 2011
Founders: Several frat brothers from University of Montana
Other Games: No
Google’s Graph for Absolute Poker
The Launch of Absolute Poker
The early 2000s saw massive growth in the online gambling world. With broadband Internet connections becoming faster and more of a commonplace across the globe, more and more people had access to paying their favorite games online.
The first wave of trailblazers in sports, casino and poker had made their mark on the landscape, and now entrepreneurs from all walks of life were getting their feet wet in the business.
At the Univesity of Montana, there wasn’t much to do in the light of entertainment, so you can imagine how popular online gambling became for those long winter nights. In one frat house in particular, a few of the brothers really took to poker, and having seen the success of Paradise Poker, decided they wanted to take a piece of the action for themselves.
While there were reportedly 6 original founders, the most public of those was Scott Tom, who, with funding from his father, started plans for the launch of the site in 2002.
Using some contacts from Asia, Tom and his partners found a development house in South Korea to build their platform, and in 2003, the group moved to Costa Rica and launched their Absolute Poker brand.
The fact that the software was being developed out of the sight of the founders was something that would come back to bite them in the future.
The Rise of the Site
Tom and the other founders of Absolute Poker weren’t the only group trying to get rich in the poker world. By the time Absolute Poker launched, the landscape was getting crowded with other competitors.
Sites like Ultimate Bet, PokerStars and Party Poker were all poker-focused companies that had entered the market, along with companies like 888 who added poker to their casino and sports platforms.
That didn’t matter though. In the early years, there were enough players for everyone, and after Chris Moneymaker won the World Series of Poker Main Event in May 2003, the floodgates were opened.
It is important to note that at this time sports betting was looked down upon,
so many of the sites provided only poker to players.
There was an argument that, because the game was being played between players and the site was just dealing the cards, that this was not considered being the house like in casino games. Again, that would factor in later on for all the sites in the industry.
Absolute Poker continued to grow at their own pace. Obviously, they didn’t have the marketing budgets of PokerStars or Party Poker, but they were able to carve out a nice niche and grew to a respectable size over the coming years.
The Partying Takes Over
So, you take a few frat brothers from the U.S., stick them in Costa Rica, the Wild West of online gambling, and fill their pockets with tons of cash.
What could go wrong?
The reports of the partying that happened at the Absolute Poker offices were legendary; allegedly fueled by cocaine and strippers, it certainly seemed like the founders were unstoppable.
By 2005, the site had signed on some poker pros like Mark Seif to represent the site.
The company was also starting to flex their marketing muscle with their meager budget. However, it seemed hard to tell if the marketing spend was an effort to bring on new players or just an excuse for Tom and his cronies to travel around the world and party in different locations.
UIGEA and the Merger
Everything seemed to be going just fine for Absolute Poker. In fact, in light of so many moves of a similar nature by their competitors, the company was planning to file papers to raise money in an IPO.
The industry was attracting some serious attention from investors given the massive profits being churned out. However, the cost of doing business was increasing, and the price of acquiring a new player was growing as a result. Many firms had turned to public money to continue on the growth trend, and Absolute Poker was going to follow.
Then, on October 1, 2006, that all changed when the Unlawful Internet Gambling Enforcement Act was passed by the U.S. Congress.
This changed the landscape forever; companies that were publicly traded were forced
to pull out of the lucrative American market, while private companies had to make a decision
about taking the risk of staying to scoop up the players.
Absolute Poker was in the perfect position to take advantage of this change in the industry. They came to a swift deal to acquire the assets of Excapsa, a publicly traded software company that had an exclusive arrangement with Ultimate Bet for poker.
Absolute would take over the company, including benefitting from the revenues from the poker brand. Overnight, Absolute Poker was now 5 times their size with a market that saw its two largest players abandon their American databases.
Clearly, there was cause for great celebration at the Costa Rican headquarters of Absolute. The partying continued and became even more intense when the founders became the recipients of millions of dollars of UB revenue.
Nothing seemed to be a cause for concern; what ended up happening is so unlikely that it is hard to believe.
Some Fishy Player Behavior
We’ll say this about the online poker community: it has done a great job over the years self-policing an unregulated industry.
The player forum sites are full of players calling out sites, other players and entities in order to preserve the sanctity of the game they love.
In 2007, a couple of players started to notice the play of what seemed to be a very amateur player in the high-stakes cash games and tournaments at Absolute Poker.
While this player had a style that should have them losing on a regular basis, this player seemed to always be on the right side of hands. This did not sit well with the community, and after posting about it on the forum, it was noted that several players seemed to be outside the normal range of winning strategy.
One thing about the online poker game that can’t be replicated live
is the ability to access a full history of hands being played.
All sites had them available for players to download, and thanks to the introduction of training tools like Poker Tracker, the players in question at Absolute Poker were able to be reviewed by other players in the community. Sure enough, what they found was that these accounts were playing as though they could see the cards they were up against.
One account, in particular, seemed to be cleaning up in $1,000 Heads Up Tournaments – Potripper.
Once the Potripper account name had been exposed, the poker community started asking Absolute Poker for some answers. First, Absolute Poker didn’t respond. Then, after a significant amount of public pressure, the company announced that it was suspending the account in question until they could review the case.
Poker players could not wait, however, and they started their own investigation. Soon, they would be able to trace the Potripper account to an IP address of the site’s own founder, Scott Tom.
Absolute Poker went into panic mode at this point.
First, they claimed that Tom had not been an employee of the company for over a year (a fact which could not be proven).
Finally, they determined that the player behind the Potripper account was A.J. Green, the company’s former COO. You can imagine the response of the poker community. Even though Absolute Poker offered to pay back the players who had been scammed, that wasn’t enough to make up for the crime that had been committed.
Green had, in fact, been in touch with the Korean software developers. Was he the only one who knew about these test accounts that had access to all the cards face up on a table as they were being played?
There has been a lot of speculation about who else may have had these accounts. Unconfirmed reports of Tom and his associates playing in the accounts after drug-fueled nights out have never been proven to be true.
It definitely did not help that as this scandal was taking shape, another major scandal of a similar nature was taking place….at the very site Absolute Poker had merged with—Ultimate Bet! As a result of this, both companies had their behavior reviewed by the Kahnawake Gaming Commission, which controlled their respective gaming licenses.
The Tribal Findings – and a New Name?
To cloud things even further, the name listed as the owner of both Absolute Poker and Ultimate Bet was Joe Norton – a former chief of the Mohawk Tribe controlling this licensing jurisdiction. As a result, when the commission was done with their investigation, they passed a judgment which didn’t make too many people satisfied.
Absolute Poker was given a fine of a couple million dollars, along with the necessity to pay back all players who were affected by this controversy. However, they were allowed to keep their license and stay in business.
Players were outraged; this was apparent collusion between the site and the commission in their eyes, but the site faced no further punishment.
In the midst of all this controversy, the brain trust at Absolute Poker decided it was a great time to rename the network and install some new management. Paul Leggatt was listed as the new CEO of the Cereus Poker Network, which contained just two licensees: Absolute Poker and Ultimate Bet.
While it took almost a year to pull off this merger of platforms, the company entered 2009 with a new name and hoped to move on from the scandalous nature of the previous few years.
Black Friday – the Real End for Absolute Poker
The Cereus network was sold in 2010 to Blanca Gaming (perhaps a shell company that would further protect the current owners – this has not been confirmed). The company continued to tread water as a poker network.
It was by far the smallest of the three sites left in the U.S. market with PokerStars and Full Tilt Poker owning the lion’s share of the market.
This story would all come to a crash landing on April 15th, 2011 – Black Friday as it is known in the online gaming industry. That day, indictments against the owners of the remaining U.S. facing sites were unsealed, and the domains of Absolute Poker and Ultimate Bet were seized by the Department of Justice.
Bank accounts were also frozen. The bad news for these players? These accounts were almost empty; the company didn’t have the players’ cash on hand as they should.
This sparked panic and outrage in the industry. PokerStars settled with the Department of Justice and agreed to pay the balances of Full Tilt’s players as a result (those players were also shocked to find out their site had spent all their cash).
However, as Absolute Poker was so much smaller, it seemed as though all was lost. Tom and the other founders had scattered, and only one saw jail time as a result of the actions against them.
A Silver Lining for Players
In 2017, the fate of the balances of Absolute Poker players seemed to be a distant memory. The Full Tilt Poker players had been paid out, and there was no sign of Scott Tom or any of the cash from the coffers of the players’ accounts.
Then, without warning, the Department of Justice made an announcement: they had enough money left over from the PokerStars settlement to be able to offer both Absolute Poker and Ultimate Bet players refunds (if they could remember their player information).
As of the writing of this article, over $30 million had been refunded with the final refunds to be completed by the end of 2017.
CEO Out of Hiding
At almost the very same time that this announcement was being made, another announcement was being made: Scott Tom was turning himself in. In return for pleading guilty to one misdemeanor and paying a $300,000 fine, Tom returned from Antigua and had the rest of his felony charges dropped.
While he could have faced up to 15 years in prison, he seems to have gotten away with only a few days in jail, while being able to return to his island paradise.
The online gambling world has seen a wide range of company founders, but perhaps none as hell-bent on making their names as the founders of Absolute Poker. This group of twenty-something year old friends tore through the industry, launching a poker brand from which they were able to afford a fantastic lifestyle.
Their rise and fall is a thing of legend in the space, and gained public notoriety when they sold the rights to their story to Ben Mezrich, who turned it (loosely) into the book Straight Flush.
In the end, the cheating scandals and Black Friday shut down a site which, had it continued, may have taken more money from players than it ended up being responsible for when it ultimately shut its doors for good.
This site will be a stark reminder that the online gambling industry needs to continue to improve its operational security and transparency with players to ensure that everyone who wants to spend their money playing cards online feels safe.