'60 Minutes': Murky world of online poker Video

'60 Minutes': Murky world of online poker Video Transcript

>> In the marquee world of internet poker, there was precious little the players could do about it. The companies were located in Costa Rica, they couldn't really complain to U.S. authorities because online gambling is illegal. The only pretense of supervision, and the players' only hope lay with a tiny nation thousands of miles to the north, that hardly anyone had ever heard of.

>> The virtual poker games are actually run on computer servers from this Canadian Indian reservation outside of Montreal. It's all licensed by a sovereign tribe of the Mohawk nation, that has no experience in casino gambling, and doesn't have to answer to Canadian authorities.

>> The grand chief is Mike Delil [assumed spelling].

>> Is internet gambling illegal in Canada?

>> Yes, but we're not Canadians. We're members of the Hodenashuni [assumed spelling] Five Nation confederacy, and we're Mohawk and Yokahawga [assumed spelling] people. We're not Canadian.

>> And that legal distinction has allowed the Kanawagi's [assumed spelling] to rake in millions of dollars a year, by licensing internet gaming sites, and housing their computer servers on the reservation. They now register and service more than 60% of the world's internet gaming activity, from this highly protected, and nondescript building that used to be a mattress factory. We drove by with the Washington Post reporter, Gil Goal [assumed spelling].

>> You really are right, this is nondescript.

>> This takes nondescript to an entirely different level.

>> Yeah, it does.

>> The operation is overseen by the Kanawagi Gaming Commission, whose three commissioners operate out of this building. It meets in secret, is independent of tribal leaders, including Chief Delil, and its investigation of Absolute Poker and Ultimate Bet have been neither transparent nor particularly aggressive. A lot of the players who were cheated suspect it's because the owner of the discredited sites is Joe Norton, a former grand chief of the Kanawagi's, who helped establish the gaming commission that cleared him of any wrong doing in the scandal. The commission fined the two sites a total of two million dollars, ordered them to repay the losses to players who were cheated. But Absolute Poker and Ultimate Bet are still in business.

>> Well periodic gaming commission, it was originally set up by Joe Norton, and his two companies come before the board, and they get a slap on the wrist.

>> Well I don't think it's a slap on the risk though. We're comfortable in saying that through the gaming commission they have done the investigation, saying that he didn't have a part in the cheating scandal.

>> Neither the gaming commission nor Joe Norton would talk to us. But in a statement, the company said they were victimized by insiders, and former employees, and accepted blame for overlooking the security problems with its software. ^M00:02:36 [ ticking ]