Greg Pierson Biography
When most people think of gambling, their minds conjure up names such as Phil Hellmuth, Doyle Brunson, and Phil Ivey. These are the faces of the industry, but there are an equal number of men and women who work behind the scenes without garnering the attention of the masses. Greg Pierson is one such individual, although hardcore gambling enthusiasts may forever associate his name with one of the biggest scandals in the history of online poker.
The Early Years
Pierson was born in the state of Oregon in 1967. Following a rather uneventful childhood, he attended Oregon State University from 1985 to 1989 and graduated with a bachelor's degree in both economics and business administration. During his college years, he also participated in jazz band and the school's water polo team.
Following graduation, Greg landed a job with Accenture, where he served as a Global Retail Practice Manager and Business Process Architect. In the course of his duties, he worked closely with companies such as Bridgestone/Firestone, Lands' End, and Nordstrom.
As the tech industry continued to grow, Pierson became, in his own words, a "computer geek." This love of technology, and a desire to get in on the ground floor of a booming market, led him to found a company (along with Jon Karl) named ieLogic in 1999.
While they would eventually grow to provide other services, the original goal of ieLogic was to supply software to the online video game industry. During this period of his life, Pierson also married Portland-area high school teacher Janelle Lynn.
The Creation of UltimateBet
In 2000, Pierson and Karl took part in the incorporation of an Antiguan company named eWorld Holdings. A number of investors were involved, and one of the main figures was former World Series of Poker winner Russ Hamilton. The purpose of this venture was to eventually launch a new online poker site called UltimateBet.
The business launched the following year, and ieLogic was tapped to develop the software that would power the site. UltimateBet had no problem getting licensed by the Kahnawake Gaming Commission, and they would offer a wide variety of options including Texas hold'em, Omaha, seven card stud, and mixed games.
In January of 2003, authorities were notified of an inappropriate relationship that had occurred between Janelle Lynn Pierson and a 16-year-old male student. This affair had started in January of 2002 and lasted through November, even continuing while the teacher took a medical leave for severe depression related to the incident.
Once the matter became public, Greg Pierson disappeared for two weeks in early 2003. He eventually surfaced in Costa Rica, then later returned to the United States. Meanwhile, the parents of the minor refused to press criminal charges, but a financial settlement was reached between the two parties. In addition, Janelle Lynn Pierson was given five years of probation, ordered to attend counseling, and permanently barred from working in a school setting.
The Rise of UltimateBet
Despite his problems at home, Pierson's professional life was booming thanks to the rise of online gaming and the success of UltimateBet. The company held million-dollar tournaments, sponsored a televised poker series, and boasted such celebrity endorsers as Phil Hellmuth and Annie Duke. At their zenith, they were the world's fourth largest online poker room.
In 2004, ieLogic was split into two new companies: Iovation and Excapsa. The former was responsible for providing software to the site, as well as assuming duties related to online fraud detection and risk management. The latter, meanwhile, became the owner of UB and was eventually traded on the London Stock Exchange.
By 2006, the site was sold to Blast Off Limited, which was in turn owned by eWorld Holdings. This move was in anticipation of the passage of the Unlawful Internet Gambling Enforcement Act in the United States, and UB continued to accept American players while many of their competitors abandoned the market.
The following year, Tokwiro Enterprises purchased UltimateBet. This company also owned Absolute Poker, and the pair were packed together to form the Cereus Network. Unfortunately for online gamblers, the entire house of cards was about to come tumbling down.
Over at Absolute Poker, a number of top-tier players were repeatedly beaten by an individual known as "Potripper." After a series of investigations by dedicated customers, it was determined that someone was using a "God Mode" account that allowed them to see the cards of all players involved in a hand.
No criminal charges were ever brought against the guilty party, but Absolute Poker was fined $500,000 by the Kahnawake Gaming Commission and forced to pay back $1.6 million to players. Oddly enough, their license was never revoked.
The Kahnawake Gaming Commission released a report about the matter on January 10th, 2008. Exactly one day later, UltimateBet--the brainchild of Greg Pierson and sister site to Absolute Poker-began to suffer through its own series of allegations.
A user with the handle "NioNio" was tearing through veteran players, consistently pulling offs wins that were next to impossible. Players once again took matters into their own hands, gathering evidence and conducting research that eventually revealed 23 accounts and 117 usernames linked to cheating. Russ Hamilton was at the center of the scandal, and it was later revealed that more than $22 million was stolen by those with access to a "God Mode" account (much like the Absolute Poker incident).
Hamilton's lawyer, meanwhile, denied the accusations on behalf of his client. The Kahnawake Gaming Commission was unconvinced, and they later named Hamilton as "the main person responsible for and benefitting from the multiple cheating incidents." Of course, company co-founder Greg Pierson was also subject to plenty of suspicion and accusations.
Despite calls for UltimateBet to be stripped of their license, the company continued to operate. They were, however, fined $1.5 million by the Kahnawake Gaming Commission and order to pay back the more than $22 million that had been stolen from players.
Wild theories and accusations began to fly. One of the most popular involved a desperate Pierson going to Hamilton for help (and money) after his wife ran into legal problems. In this scenario, Hamilton dipped into the till to help his business associate, and he never stopped dipping. Keep in mind, however, that not a shred of evidence exists to support this theory.
Pierson, for his part, remained silent about his role in the scandal. This encouraged wild speculation among the Internet crowd, although the bulk of their ire was aimed primarily at Hamilton.
By November of 2008, Tokwiro Enterprises had settled a lawsuit against Excapsa for $15 million. At the same time, UltimateBet was paying back those who had been impacted. A major marketing push was also underway in an effort to bring customers back to UB, and the poker room was eventually sold to Blanca Gaming.
Black Friday occurred in 2011, and the world of Internet gambling was forever changed. Blanca Gaming was eventually forced to file for bankruptcy, with unpaid debts reported to be in the range of $50 million.
Life Goes On
Greg Pierson isn't one to give up, though. While his Excapsa brand might have fallen on hard times, his company known as Iovation kept chugging along by offering security and fraud prevention to customers. In 2013, he was even nominated for the Ernst Young Entrepreneur of the Year Award.
His past would come back to haunt him from time to time, though. For example, when it was learned that Iovation was providing fraud management services for a site known as Ultimate Poker, the wave of customer complaints resulted in the company looking for a new security provider.
The Smoking Gun
In 2013, a damning three-hour audio tape was released by Travis Makar, a former assistant to Russ Hamilton. Recorded in 2008, the tape captures conversations between Hamilton, Pierson, and attorneys Sandy Millar and Daniel Friedberg.
As the men try to get their stories straight, more details about the dirty dealings of UltimateBet come to light. Pierson never admits to any direct involvement, but Hamilton certainly comes off as a villain. In fact, the former WSOP champ states at one point, "I did take this money, and I'm not trying to make it right, so let's get that out of the way."
A Bright Future
In February of 2016, it was reported that Iovation was unanimously granted a gaming license by the Nevada Gaming Commission. Despite the serious doubts of one commission member, the company now has the ability to provide anti-fraud, cyber security, and geolocation services to all licensed sites within the state's online gambling industry.
Meanwhile, Iovation boasts a customer retention rate of 98%. They employ over 100 individuals at their Portland headquarters, and their list of clients numbers into the hundreds.
Quotes about Greg Pierson and UltimateBet
During the course of the UB scandal, numerous professional poker players came forward to provide commentary about both Greg Pierson and the company he co-founded. In this section, we'll look at some of the most notable quotes from Pierson's business associates, former friends, and those who had the misfortune of losing money via UltimateBet.
First up, we have Annie Duke. A longtime associate with UB, Duke maintained her affiliation with the company even after the scandal became public. However, when the Smoking Gun Tapes were released and Duke was accused of cheating, she finally spoke out and sought to distance herself from her business associates.
"Listening to the leaked audio that describes an elaborate attempt by some of UltimateBet.com's founders, including Russ Hamilton and Greg Pierson, to cover up cheating reminds me once again how much I regret having been associated with the people that were involved in this conspiracy. The release of this audio has spurred accusations and I want to make it clear that I have never used a tool on a delay or otherwise that gave me or anyone else access to hole cards for use during real money play nor was I aware that such a tool existed until the scandal broke.
Knowing what I know today, I would have never encouraged anyone to play on the UltimateBet.com site under that management. I'm horrified at the lengths to which these people went to try to cover up their actions, and I am very sorry that I ever agreed to work with them. I remain very upset that people were cheated and that, partly because of the actions of the people on this tape, it took far too long to pay back the $23 million that was owed to the victims, and that hand history information was never fully provided to the public."
Next up is Phil Hellmuth. One of the most successful poker players in the history of the game, Phil was known to be a friend of Greg Pierson, as well as a spokesperson for the controversial UltimateBet website.
"I've made a living off of reading people at the poker table and in the business world. Trusting my gut has allowed me to be at the top of my profession and develop a lifetime of friends and great experiences.
Unfortunately, I made a horrible read regarding my relationship with the founders of the now defunct online poker site Ultimate Bet.
I trusted their team and believed in their ability to run a first class website and business. Most importantly, I allowed them to convince me that they were honest and forthright. I've never been more wrong about anything in my life."
While Duke and Hellmuth both distanced themselves from Pierson and his former company, they still walked away from the scandal with a tidy sum of money in their pockets. Not all poker players were so lucky, however, which brings us to Mike "The Mouth" Matusow.
"This man (Russ Hamilton) would call me to play him head-up. I would ship $50,000, $50,000, $50,000. All the money I won when I won the '05 World Series Main Event, when I got to the final table and when I won the Tournament of Champions, I gave all to Russ to put on UB while he was playing me heads-up and stealing it from me. The two people that got beat the most were Prahlad Friedman and myself... What [Russ] did to him was just brutal."
Speaking of Prahlad Friedman, here's what the WSOP bracelet winner had to say:
"I remember days where I'd be up $50,000 and then I'd play some random guy and he'd kill me. I'd just play and play and play and not quit a guy. I never did that. I would give them 10 buy-ins because I had so much confidence and felt I could adapt to the way they were playing. Occasionally I'd win a huge pot on a hero call. That was tough for me. I was doing so well, was on top of the world and then hit that rough patch. I figured it was variance. Variance happens."
Despite his negative experience with UB, Friedman signed on to endorse the company a few years later (before having his contract terminated in 2011). When he was criticized for allying with a company that had stolen millions from him, Friedman replied with the following:
"I feel like they took care of me after the scandal. I feel like they didn't have to pay people back and they did. It was amazing to find out I was going to get a hunk of money back. I have a good relationship with their team and their management and I feel like this is a totally different UB than anything associated with the scandal."
Throughout his career, Greg Pierson has boosted his personal wealth and overall reputation by being credited with a number of patents. There are three major examples, and this section takes a brief look at each.
- Patent #7,272,728 (issued
in September of 2007)
Created by Greg Pierson and Jason DeHaan, this patent covers a network security and fraud detection system and method. Its description is as follows: "A system and method to detect and prevent fraud in a system is provided. The system may uniquely identify physical devices connecting to a network, register unique devices, track end-user logins, associate end-user accounts with specific devices, and share information with multiple network service providers is described."
- Patent #7,526,796 (issued
in April of 2009)
Created by Greg Pierson, Dan Lulich, and Ron Lunde, this patent concerns the methods and apparatus for securely signing on to a website via a security website.
- Patent #8,751,815 (issued
in June of 2014)
Created by Greg Pierson, Ron Lunde, and Dan Lulich, this patent involves "creating and verifying globally unique device-specific identifiers."
The world of online gambling has plenty of unpopular figures, but Greg Pierson remains among the most disliked. While there's no clear evidence that he participated in or knew about any wrongdoing in the UltimateBet cheating scandal, there are numerous players who continue to hold him and his anti-fraud software responsible.
Despite his controversial past, Pierson continues to move forward with his life. Iovation remains a leading player in the tech industry, and their recent approval for a Nevada gaming license assures the self-confessed computer geek of continued success for years to come.
Author: Shane Rivers
Updated: December 2016