Scott Tom, the co-founder of Absolute Poker, has a lot in common with UltimateBet co-founder Greg Pierson. Both men started successful online gaming websites, and then both were forced to watch as their creations were scandalized and eventually destroyed. But while Pierson continues to openly conduct business in the United States, Tom is in exile to avoid being arrested following the events of Black Friday.
So how did Tom reach such an unenviable place in his life? Read on to learn all the juicy details.
Not much is known about the adolescent years of Scott Tom, which likely means that he had a fairly normal upbringing. He was raised in Frenchtown, Montana, and he completed his basic education by graduating from Frenchtown High School.
His parents divorced when Scott was still young, and his mother eventually remarried. Her new husband had children of his own, and this included Brent Beckley. Scott's biological father, Phil Tom, made his living by managing stock portfolios for clients.
The College Years
Following his departure from high school, Scott Tom enrolled in college at the University of Montana and joined the Sigma Alpha Epsilon fraternity. He enjoyed his time at the university level, and he was eager for his step-brother, Brent Beckley, to join him. According to Beckley, Tom would call almost every night and say things such as,
"You gotta come to college; it's awesome. You're not doing anything with your life. You gotta come up here and party with me and go to school and meet girls."
Beckley finally relented and joined his step-brother at the University of Montana, lured by the promise of a room at the Sigma Alpha Epsilon house for the entire summer at a cost of just $500. Once the fall semester began, Beckley enrolled in classes and was officially accepted into the fraternity.
Each night of the week, the frat brothers would entertain themselves at a different spot in the college town of Missoula. Most of these venues involved drinking and flirting with girls, but Monday nights were devoted to Stockman's, which hosted a weekly $100 freeroll poker tournament.
While most of his frat brothers looked at poker night as nothing more than a diversion, the wheels began to turn in Scott Tom's head. This was heightened by his discovery of online poker and the fact that virtual card rooms took a small percentage (known as the "rake") of each hand played.
The Birth of Absolute Poker
In 2002, Scott Tom graduated from the University of Montana with a degree in finance. Tom moved into his biological father's basement in Seattle while he figured out what to do next. Ideas came and went, but his mind always returned to those Monday nights at Stockman's and the allure of online poker.
Suitably inspired, Tom put together a business plan. When Tom's father, Phil, agreed to act as a financial backer, the project was up and running. A number of Sigma Alpha Epsilon brothers were recruited, including Pete Barovich, Garin Gustafson, Oscar Hilt Tatum IV, and Shane Blackford. Beckley was also involved in the early stages, although Tom insisted that his little brother return to college and finish his education.
Since the government of the United States wasn't exactly welcoming to Internet gambling operations, it was decided that their operation should be based elsewhere. After careful research, the group chose Costa Rica for its friendly attitude towards online poker, low tax rates, and overall party atmosphere.
Now that everything was in place, Tom and his business partners were ready to unleash their creation onto the gambling world. On an otherwise uneventful day in 2003, Absolute Poker made its debut.
That same year, Brent Buckley had graduated with a degree in finance and business administration. His step-brother wasted no time in offering him a job, but Buckley didn't view online poker as a stable profession. However, jobs were hard to find, and when Tom offered him the position of Director of Customer Service and quoted a monthly salary of $1,200 to $1,800, he relented and moved to Costa Rica.
During the development stage of the software, a number of accounts were created for the purpose of testing the overall program and making sure that pots were evenly distributed. Some of the accounts allowed the user to see the hole cards in an opponent's hand, and this feature would eventually lead to a major scandal.
The Rise of Absolute Poker
Absolute Poker received strong reviews upon its launch, but business was initially slow. An average of 10 new customers signed up daily, but that number was far below expectations. That all changed when Tom and company purchased commercial time on television, and the daily enrollments suddenly skyrocketed to 2,000+.
Within a few years, Absolute Poker had become one of the largest online card rooms in the world. They were reportedly making a million dollars in profit daily, and their success showed no signs of letting up.
When a rival poker room went public, it turned the creators into overnight billionaires. Tom and his colleagues liked the idea of being set for life, so they decided to offer shares to anyone with the cash to afford them.
Passage of the UIGEA
Unfortunately, the U.S. passed the Unlawful Internet Gambling Enforcement Act in 2006. While it didn't ban online gambling outright, it made transactions a major pain and allowed the Department of Justice to go after offshore operators who were accepting American players.
In June of 2006, Absolute Poker received a license from the Canada-based Kahnawake Gaming Commission. In October of that same year, former Grand Chief of the Kahnawake tribe, Joe Norton, purchased both Absolute Poker and UltimateBet and placed them into a holding company known as Tokwiro Enterprises.
Absolute Poker Scandal
In 2007, the site underwent a number of upgrades that required outside programmers to be hired. It's been alleged that one of these individuals came across the test accounts providing a view of opponent's hole cards, and that's when things started to get messy.
Rumors began to circulate on Internet forums about suspicious behavior at the site, especially as it related to an account named Potripper. Things got even more interesting during a $1,000 buy-in tournament, when Potripper and Marco Johnson went head-to-head.
After Johnson lost, he asked for a hand history of the final table. He shared this information with others, and most came to believe that Potripper had the ability to see the hole cards of his opponents.
Due to a growing uproar among customers, Absolute Poker decided to freeze the Potripper account, along with three other accounts that had also shown suspicious activity. Meanwhile, Internet sleuths tracked the account link of Potripper to Scott Tom, and it was eventually learned that it belonged to AJ Green, the site's former Director of Operations.
At this stage, Absolute Poker went into damage control mode. They officially stated that Tom hadn't worked with the company in over a year. In addition, they agreed to issue refunds to all the customers who'd been impacted by the cheating (to the tune of $1.6 million). It was during this period that Joe Norton first admitted to owning the site.
The Kahnawake Gaming Commission also launched their own investigation, but the fact that their former leader owned the site didn't fill anyone with optimism. They eventually fined Absolute Poker $500,000 in 2008, but they opted not to revoke their license. Adding additional fuel to the fire, they refused to name the person(s) responsible for the actual cheating.
Later that year, the Cereus Poker Network was launched. This new enterprise included both Absolute Poker and UltimateBet, the latter of which had also suffered through its own scandal. After slowly reforming their image and re-establishing a customer base, the entire network was sold to Blanca Gaming in 2010.
On April 15th, 2011, the U.S. Department of Justice initiated a no-holds-barred effort to combat illegal offshore gambling. A number of high-ranking executives were arrested, and several others were indicted. Scott Tom was among these individuals, and he was charged with the following three counts:
- Conspiracy to Violate Unlawful Internet Gambling Enforcement Act - Maximum penalties include: five years in prison; three years of supervised release; fine of $250,000 or twice the gross gain or loss.
- Violation of Unlawful Internet Gambling Enforcement Act - Maximum penalties include: five years in prison; three years of supervised release; fine of $250,000 or twice the gross gain or loss.
- Operation of Illegal Gambling Business - Maximum penalties include: five years in prison; fine of $250,000 or twice the gross gain or loss; three years of supervised release; forfeiture of proceeds of offense.
To make matters worse, the Internet domains of Absolute Poker, Full Tilt Poker, and PokerStars were all seized by the U.S. government. The Cereus Network owed players more than $50 million, and they didn't have nearly enough to pay everyone back. Within a short period of time, Absolute Poker was officially out of business.
Dodging the Law
When the indictments were unsealed, Scott Tom was on vacation in Antigua with his girlfriend. He decided to stay there to avoid prosecution, and he later became an official citizen of the island nation.
His step-brother, however, wasn't so lucky. Brent Beckley was also indicted, and he wound up being sentenced to 14 months in a minimum security prison.
Ben Mezrich's Book
In 2013, author Ben Mezrich told the story of the rise and fall of Absolute Poker in his book Straight Flush: The True Story of Six College Friends Who Dealt Their Way to a Billion Dollar Poker Empire and How It All Came Crashing Down. The book proved controversial among gamblers, as many felt that he'd been too easy on Tom and his associates.
No matter what opinion you have on the book, his promotional interviews provided some insight on the life of Scott Tom after the events of Black Friday. When talking about getting sources for the book, for example, Mezrich said,
"I managed to get to all of the guys, and they all seemed willing to talk. Scott Tom was the most reluctant. He did not originally want to talk to me probably because of the whole 60 Minutes thing, and a lot of people had come after him and he was in Antigua and he was trying to figure out what he was going to do about the indictment and the government and all that kind of stuff. But I met with him and convinced him to be a source as well."
In the same interview, Mezrich spoke at length on the current well-being of Tom.
"Scott, on the other hand, was terrified about his future, because he had no idea what was going to happen. I went to Antigua and spoke to him in person. He can't leave the island. He's afraid to get extradited or taken away or get a bag put over his head and get dragged in. He's facing a big indictment. I think he's trying to get some sort of a deal, but the amount of money they want is an enormous amount of money. He claims he doesn't have anywhere near that kind of money. He is a charismatic individual. He is definitely complex. He's one of those guys who are hard to get down on paper. There are two sides to Scott, I think. If you talk to everyone who knows him well, they either love him or hate him. I think he's a fascinating character."
Scott Tom co-founded Absolute Poker with several of his fraternity brothers from the University of Montana. It became a major player within a short period of time, but its eventual collapse was due to the efforts of the U.S. government and an internal scandal that permanently blemished its name.
Tom is now a virtual prisoner on the island nation of Antigua, unable to return to the United States for fear of being imprisoned. Some might view this as justice, while others would label him a scapegoat. No matter what your opinion, though, the rise and fall of Scott Tom should serve as a cautionary tale for anyone thinking about getting into the offshore gambling business.
Author: Shane Rivers
Updated: May 2017
- NCAA to Thoroughly Examine Sports Betting, Colleges Want Integrity Fees
- Bovada, Bodog Roll Out New Site Layouts, Features
- DraftKings Will Partner with del Lago Casino for Sports Betting in New York
- Spurs Trade Superstar Kawhi Leonard to Raptors
- The FanDuel Sportsbook is Off to a Fast Start, How Does it Compare to Others in NJ?