ABSOLUTE POKER ISSUES INTERIM STATEMENT ON SECURITY BREACH
(NOVEMBER 8, 2007) — Absolute Poker (AP) issued the following statement today
with respect to its on-going internal investigation of the recent security breach in its
system.

“As Former Grand Chief Joe Norton, the 100% owner of AP, previously stated, Absolute
Poker will, when appropriate, issue periodic updates concerning the recent security
breach in its system. Because the Kahnawake Gaming Commission’s (KGC’s)
investigation is on-going, the information provided in this interim statement is subject to
the completion of the final KCG inquiry. Gaming Associates (GA) is in the process of
auditing AP’s systems as part of the KGC inquiry. AP continues to cooperate fully with
these investigations.

“First and foremost, we would like to assure our players, once again, that the security
breach, which resulted in unfair play, was resolved immediately after it was discovered
and confirmed, and AP’s sites are absolutely secure.

“At this point, all players known to have been adversely impacted by the security breach
have been fully reimbursed with interest. The amount that was illicitly ‘won’ by the
illegitimate accounts was approximately US$800,000. The amount reimbursed to players
by AP as a result of the security breach was approximately US$1,600,000.

“Thus far, our internal audit has uncovered the following additional information:
• “The known period of unfair playing was approximately 40 days in length,
beginning on 14 August 2007.

• “A known perpetrator was immediately terminated upon discovery of the scheme
and no longer has access to AP. AP’s internal investigation continues.

• “The system breach was the result of a recent internal software release impacting
internal reporting. The breach was exploitable only by an authorized AP person
that manipulated the internal reporting software, together with the AP gaming
software. The security breach was not, therefore, the result of an external action,
and no individual outside AP could exploit the breach.

• “There is no evidence of the current or past existence of a “super-user” account.
There is no player account in the AP system with the ability to see other players’
hole cards.

• “The names of the accounts known to have cheated are: potripper, graycat,
steamroller, doubledrag, payup, supercard55, and romnaldo. These accounts have
been closed. All players that played hands and lost funds during the period in
question, against these accounts have received refunds, plus interest, for the net
amounts lost.

• “All accounts associated with the perpetrating accounts are under investigation. If
any other accounts are deemed to have engaged in illicit activities, AP will refund
all affected players in the same manner.

• “AP can confirm that not every hand played by the perpetrating accounts during
the said period was compromised by the tool enabling the unfair advantage.
Nonetheless, AP has refunded players for the net loss resulting from every hand
played against the perpetrating accounts during the affected period.

• “All hand histories with respect to the affected period were retained by AP and
were made available to both the Kahnawake Gaming Commission and the internal
auditor for detailed review.

• “All registered accounts in the AP database are under investigation to ensure that
there are no other compromised accounts with links or associations to the closed
accounts. If the on-going investigation determines that there are any further
accounts that were used in connection with the unfair play, all affected players
will be reimbursed in full, with interest.

“AP regrets the damage that has been done to its players and to its own reputation by this
incident. We are absolutely focused on doing the right thing for our loyal customers,
employees, consultants, and business partners, and we will continue to work with the
KGC and Gaming Associates to bring this incident into the full light of day and to right
any wrongs done to innocent victims of this unfair play.

“Currently, thousands of people are playing on AP both for real money and for free. AP
is a safe, secure and fun place to play poker.”

Hi Everyone:

Over the past two months Two Plus Two and its forum members have been responsible for noticing, investigating, and ultimately alerting the world to the suspicious and potentially fraudulent cheating activity occurring at Absolute Poker.

For over two decades Two Plus Two publishing has been committed to the responsible growth of the poker industry and the fair play of the game. During the past five years the emergence of online poker has been both a blessing and a curse in this regard. Although online poker has certainly introduced our game to countless new players, it has also threatened to cast doubt on the game’s fairness and legality. Two Plus Two has tried to associate itself only with companies committed to fair, accurate, and legal poker.

Despite the scar left on the industry in wake of the recent allegations of online cheating, Two Plus Two is pleased with the way these forums have uncovered and addressed the issues. You have let the industry know that any potential cheating will be discovered, exposed, and not tolerated by poker players and customers of online poker sites.

Due to the size and influence of these forums within the industry, Absolute Poker recently approached me to ask if Two Plus Two would confirm to our forums that Absolute has done everything in its power to address and fix the recent allegations of cheating, security breaches, and improper activity. As you all know, I would never agree to such a statement unless

1. I believed it to be true, and
2. I thought it was in the best interest of the Two Plus Two community.

I am not an investigator able to make a determination that Absolute Poker, or any online site, is 100% safe for poker. I mentioned to Absolute that my attorneys may be able to conduct an investigation on my behalf. If my attorneys, who I have worked closely with for almost twenty years, agreed that the Absolute Poker site was safe, I would post a forum notice to that effect. The representative from Absolute Poker who we spoke with was initially agreed to these terms and I presented the investigation opportunity to my attorneys.

My attorneys informed me that they would be willing to conduct a thorough investigation of Absolute Poker. The law firm could immediately assemble a team of lawyers, computer specialists, and ex-government fraud investigators to fully analyze the current situation at Absolute and give an accurate report on the same. In order to accept, however, my attorneys needed to make it very clear that:

1. The investigation and report would be for the direct benefit of Two Plus Two and its forums, not Absolute Poker,

2. A positive outcome for Absolute could not be guaranteed,

3. The report and investigation would not include Two Plus Two’s (or its attorneys’) position on the general legality of online poker, and

4. They would accept direct compensation for the investigation only from Two Plus Two as a client.

Our attorneys sent us a formal letter outlining their investigation plan. Two Plus Two believes the plan is reasonable and guarantees an objective result that you, as Two Plus Two members, can rely on when deciding whether to support Absolute Poker in the future. We have forwarded the letter to Absolute Poker for approval, and so far, we have not heard an answer. In fact, Absolute Poker recently issued a press release stating that they have retained the “Gaming Associates” company to conduct an investigation into the recent allegations.

We at Two Plus Two don’t know enough about Gaming Associates to judge its ability to conduct an adequate investigation of Absolute Poker. We do know, however, that this proposed investigation makes us uneasy for a few reasons. First, according to its press release, Absolute Poker is funding the investigation directly, with no third party involved to ensure objectivity. Second, Absolute has apparently agreed to allow Bluff Magazine and Pocket Fives to review the findings of the investigation without a similar arrangement for Two Plus Two. This seems strange considering Two Plus Two’s role in uncovering and discussing this situation. Finally, Two Plus Two believes that a report from Gaming Associates, an Australian company apparently dealing primarily with Antigua and Barbados companies, may not maintain the same weight and reliability as the international law firm retained by Two Plus Two.

Ultimately the decision to support Absolute Poker in the future is up to each of you. Two Plus Two, although it does not condemn Absolute at this time, will not offer any support nor give any assurances until its proposal is accepted or discussed by Absolute.

I have posted this update for two reasons. First, I wanted to inform all Two Plus Two posters of the Absolute situation and our current stance on the issue. Second, I wanted to encourage discussion on whether Absolute’s current investigation proposal with Gaming Associates is adequate to protect its site and the online poker industry in general.

Best Wishes,

Mason Malmuth
Two Plus Two Publishing

The above is from a thread on 2+2

Posted By Nat at 2+2

With regards to what has become known as "popcorngate" — I’ve recently been filled in on a number of the details. While I did not get the information from a confidential source, the person who gave it to me would prefer that his name is not used here. However, he is currently pretty high up in management in AP and is a credible source.

There are a number of issues to address.

First, AP made the donation to "Sunrise Children’s Foundation" via wire transfer to a bank in Las Vegas. Not the best website I’ve seen, but you can check it out here: http://www.sunrisechildren.org. Also, feel free to verify the info with people there.

Second, the donation was not made until February of 2007. The guy who I spoke with admits that the timeframe for the donation was not ideal considering that the donations were received in July/August-ish of 2006. I’m told that it was largely an administrative screw-up due to a changeover in marketing companies (ie, the people who ran it). Regardless of the explanation, obviously it should have been made sooner.

Third, because Schneids was generous enough to offer to donate his refund to charity, AP is going to match that offer and donate that amount to charity in the near future. This is in addition to the money raised and AP is going to do so regardless of whether Schneids follows through with his offer.

Fourth, AP is going to run a charity tournament of some kind on their site where the rake will be collected and contributed to a charity (not sure if it will be the same one). In addition, AP is going to match the collected rake, effectively doubling the contribution from the community. I assume details will be announced at some point in the near future.

With that said, none of us have heard anything more about the alleged 2006 WSOP popcorn story and none of that money making it to charity.

If someone from Absolute can come in here and tell me which charity received your popcorn dollars and after contacting them I am satisfied that it is in fact a real charity and they did receive your money from selling $1 bags of popcorn, I am willing to donate every cent you just gave me, to that charity.

Anxiously awaiting further details on this.

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