Casino Bar Experiment

Update: The Casino Bar attorneys say their own expert should be done with his review by the end of this week. I plan to repost by June 24.

From: Law Offices of Shmueli, Abramovich, Yosef & Co.
To: Michael Shackleford
Received: 4:26 AM, Pacific daylight time, June 6, 2002.

Thursday, June 06, 2002

To the attention of : Mr. Michael Shackleford
By electronic mail Without prejudice

Dear Sir,

Re: COA World Entertainment Limited

As the legal counsel of COA World Entertainment Limited ("COA"), we would like to draw your attention to the following:

1. COA is an online gaming operator having title to two main Internet sites, www.casinobar.com and www.casinoonair.com (the "Sites").
2. COA has been in the gaming industry for nearly 4 years and has over 150,000 loyal play-for-real players and over 2 million fun players. COA is a reputable company and is renown for its promotions and the amount of bonuses it offers to the players, in spite of the fact that it faces many bonus hustlers, fraudulent and charge-back punters. Indeed, as you have stated in your report, mentioned hereunder, "they have good software, a nice website and otherwise seem a good organization".
3. We are informed that on June 3rd, 2002, you published a report in www.theWizardofodds.com, titled "Casino Bar Experiment".
4. Your report is tendentious and is of a slanderous nature. We can hardly comprehend how you could possibly reach these incorrect and misleading conclusions.
5. It should be noted, that it would be impossible for you to have used COA's software code as it is only known to three of its major partners and is stowed away in a safe depository. If indeed you have used a software code, such cannot be COA's and in all circumstances it is not the code by which COA's software is operated. If after all, you have been using COA's code, it would constitute a felony and you may thereby face legal action for dishonestly appropriating COA's property. It is reasonably expected, that one, who pretends to perform a diligent analysis, would at least verify that the code is that of COA's software.
6. Your harsh assertion, namely that "Casino Bar is cheating at blackjack" is based on unfounded allegations and conclusions drawn recklessly by inducing your findings over an unreasonable short period of time. In addition, you have recklessly related your analysis with respect to Casino Bar to COA's other site, casinoonair.com, stating, "Casino-on-Air now uses the same software as Casino Bar" and yet asserting "I have not played at Casino on Air since they left Starnet".
7. We are advised that your report's slanderous nature has caused COA severe economic losses, actual and potential, to its business and goodwill. COA insists that it DOES NOT tamper with its software codes.
8. Due to the severe and enormous damage caused by your unsubstantiated allegations, we instructed COA to accept the appointment of an independent third-party expert to ascertain your allegations of which results would be published on the net. It is to note, that COA's willingness in this regard, only demonstrates its full assurance in the credibility of its software and in its integrity and fairness in the way it conducts its business. Any failure to cooperate with COA in this respect and/or rescinding the unsubstantiated assertions raised by you, would only indicate its unprofessional and tendentious nature, which is also being unlawfully abused by sites slandering COA's business.
9. We are instructed, to exhaust all available legal measures in order to avoid the publication and distribution of unsubstantiated information of which consequences may result in the loss of tens of jobs, without even affording COA the opportunity to prove otherwise.
10. We are, therefore, advised to inform you to immediately publish an appropriate apology to be circulated via the same media that served your report.
11. Unless you notify us immediately that you will promptly comply with the foregoing demands, we will be forced to take appropriate action to protect COA's valuable legal rights.
12. Nothing contained herein will be deemed to constitute a waiver of any of COA's rights or remedies, all of which are specifically reserved.

From: Michael Shackleford
To: Law Offices of Shmueli, Abramovich, Yosef & Co.
Sent: 8:52 AM, Pacific daylight time, June 6, 2002.

Dear Gideon:

Please let me make some comments about your letter and make a short-term counteroffer.

Point 5: I received just a snippet of coding from an anonymous source. It may or not be legitimate. The source may have obtained it by reverse engineering the game itself. The purpose of my experiment was not to prove the code was true but to disprove the game was fair. At the very least I will make this point more clear on my site.

Point 6: My opinion is that if one casino is guilty of cheating then all others owned by the same company would be suspect. However I will emphasize on my site that I make no accusations against Casino on Air.

Point 11: I don't see how I can make an apology when I believe my charges to be true. Furthermore I didn't just go into this recklessly but had three other independent sources play there as well and we all came to the same conclusions. There were seven days between when I played and when I posted my findings, giving me ample time to review them. As an actuary and professor of casino math at the University of Nevada, Las Vegas, I feel I am qualified to perform statistical tests like the one I did on Casino Bar's software. Furthermore I had a PhD mathematician review my expose before I made it public, and he said the math looked sound.

What I would like to offer is to temporarily remove my results for a period of seven days. This will give you time to find your own mathematician to review my work. If I can be convinced I am in error by someone with an equal or greater mathematical background as mine then I will immediately post an apology. During the seven days I will not apologize but state what I just said, that I am giving you a fair chance to have my charges more carefully examined.

This I believe is a fair offer. Please let me know if you accept and I will make the temporary removal at once. If you are correct then an apology would sound much more sincere if I could explain how my analysis was in error.

Regards,

Michael Shackleford

From: Law Offices of Shmueli, Abramovich, Yosef & Co.
To: Michael Shackleford
Received: 11:12 AM, Pacific daylight time, June 6, 2002.

Dear Sir,

In response to your email dated June 6, 2002, please note the following:

1. The purpose of your experiment is irrelevant to the question whether you have used or had access to the software code. Similarly, reverse engineering is by all means illegal, of which implications, are currently examined.
2. We are instructed that the basis of your offer is welcomed. However, the coming weekend will cause a delay in locating the proper authoritative professional whose task would be to perform a test on your findings. We are informed that during the next week we would revert to you with a more detailed time table for conducting the test. We, therefore, cannot, at this stage assess whether 7 days will suffice to come up with our findings. If, in spite of our efforts we fail to locate an expert we will revert to you and seek your assistance in this regard, if such would be acceptable by you.
3. We, nevertheless, demand that you immediately remove your report from your site and publish our correspondence in this regard.
4. Once our expert's findings are found to be contrary to yours, we demand that you publish a sincere and fully pledged apology accompanied be the expert's findings.
5. Nothing contained herein will be deemed to constitute a waiver of any of our client's rights or remedies, all of which are specifically reserved.

From: Michael Shackleford
To: Law Offices of Shmueli, Abramovich, Yosef & Co.
Sent: 11:50 AM, Pacific daylight time, June 6, 2002.

Dear Gideon:

1. I never had access to the software code. I simply got an anonymous e-mail with the bit of code. Where and how this person got it I don't know. I will consult with my own attorney about my rights to paraphrase the code I got. You will note I never quoted it directly.
2. I agree to be flexible on the seven days. However I don't see failure to locate an expert being a legitimate excuse to not address the specifics of my report. I would suggest going to any respectable university and asking which professors or graduate students do outside consulting.
3. I will publish your initial letter if that is what you wish, with my explanation of our terms.
4. I fully agree that I will consider your experts conclusions but I reserve the right to communicate with your expert if I don't agree with them. If your expert does convince me I am in error I of course will post a full apology. If I can't agree with your expert I will at least post their findings on my site in the interests of telling both sides of the story.
5. I understand.

Following is a letter sent by kind attorney who agreed to help me free of charge. He has requested to stay anonymous for the time being.

From: Michael Shackleford's attorney
To: Law Offices of Shmueli, Abramovich, Yosef & Co.
Sent: June 19, 2002.

I am an intellectual property attorney and Michael Shackleford has consulted with me regarding the current matter. I am licensed to practice in New York, New Jersey, and Georgia, but not in Nevada. It is also noted that Mr. Shackleford resides in Las Vegas, your law office is located in Israel, Casino Bar is believed to maintain their servers and license in Venezuela, and Casino Bar's management and their nationality/location is not directly known. Further, events contributing to this dispute have taken place throughout the United States and other parts of the world. At this point it is undetermined which jurisdictional laws these matters fall under. As such, I make no representations under Nevada law, and make the following statements based only on the facts and Federal laws of the United States.

Mr. Shackleford is a well known expert in the field of gambling mathematics. As such, he runs a for-profit web site, www.theWizardofodds.com, dedicated to gambling and which includes reviews of Internet casinos.

Many people are reluctant to gamble online because of their concern about "unfair games." An unfair game can be defined as a game which does not follow commonly accepted practices, such as those found in land based casinos or other online casinos, and without any notice or disclaimer to the player disclosing same. Typically, unfair games increase the house advantage. An unfair game may be intentionally programmed as such by the programmers of the casino's software, or an unfair game may also be due do an unintentional bug in the software such as a problem with the random number generator.

Unfair games such as blackjack at a particular casino can be identified, but not by the casual player. An expert would have to play a series of hands and perform a complex mathematical analysis on the results. Because this is beyond the capability of the vast majority of players, players turn to web sites like Mr. Shackleford's for information about particular online casinos. Mr. Shackleford has a duty to readers of his site to both acknowledge which online casinos are doing a good job as well as which online casinos may have problems of some kind. This is no different from any other consumer oriented web site or magazine.

Mr. Shackleford received an anonymous email containing code allegedly from the Casino Bar software. Mr. Shackleford did nothing more than look at this code. The code contained a provision to deal "seconds," an unfair provision which increases the house edge. Because his web site states he can test any online casino a reader reports as unfair, Mr. Shackleford felt it necessary to test the Casino Bar blackjack game to see if it really dealt seconds. He performed his tests by playing directly on the Casino Bar web site (as any other player would), and the code he received had nothing to do with the results of his tests. The result of his studies is that the chances of the particular observed results happening in a fair game is only a 1 in 238 billion. Mr. Shackleford has a duty to report such results to his readers.

Mr. Shackleford regrets that he found your software to not play fairly, his goal is not to harm Casino Bar, but to protect players. If any online casino suffers any financial loss due to a negative review, this is an unavoidable consequence. In fact, Mr. Shackleford even noted in his article that, "I think this is a shame about Casino Bar. They have good software, a nice web site, and otherwise seem a good organization. "

However, Mr. Shackleford still stands by his original report. Further, after reviewing all of your correspondence with Mr. Shackleford, based on the facts they are without merit.

You state in Item 1 of the second June 6 email that Casino Bar's software code was unlawfully reverse engineered. You state, "reverse engineering is by all means illegal, of which implications, are currently examined." While Federal U.S. cases have clearly upheld the legality of reverse engineering in itself, the legality of this is not even in issue because Mr. Shackleford received the code anonymously by e-mail and had no part in its procurement. He also did not do anything with the code, such as post it publicly or distribute it. Mr. Shackleford clearly did not partake in reverse engineering as you describe.

You state in item 5 of the first June 6 email that "If after all, you have been using COA's code, it would constitute a felony and you may thereby face legal action for dishonestly appropriating COA's property." Mr. Shackleford performed his tests on the Casino Bar site itself. The code he received via anonymous email was not used and in fact could not even be compiled and executed without having the remaining subroutines of the program, which were not provided. Every player at Casino Bar uses the COA code in order to play the games, as this is part of the player license. Mr. Shackleford indeed used the COA code for his tests like any other player would. Thus, Mr. Shackleford did not misappropriate COA's code as you describe.

You also state numerous times that Mr. Shackleford's report is slanderous. As you know, the U.S. Supreme Court has consistently held that truth is a complete defense to such claims. Mr. Shackleford stands by his report. In fact, if it comes down to it, Mr. Shackleford would gladly testify under oath in any forum that the reported results of his trials at Casino Bar happened exactly as he described and that he kept accurate records of the results. The fact that at least two other web sites present similar results to those described by Mr. Shackleford corroborates his statements. As far as the mathematical analysis of these trials goes, as agreed previously, you may procure your own expert to refute Mr. Shackleford's conclusions based on his trials. If your expert is persuasive, Mr. Shackleford agrees to publish a retraction and an apology. In your email you state that Mr. Shackleford's conclusion that Casino Bar is cheating "is based on unfounded allegations and conclusions drawn recklessly by inducing your findings over an unreasonable short period of time." Mr. Shackleford played long enough to determine that the odds of his observed results in a fair game were 1 in 238 billion. Longer play would only result in that number being even more astronomical. Notwithstanding the above, you still have not identified which part of Mr. Shackleford's report is untrue. Mr. Shackleford respectfully requests that you point out with particularity which part of the article is false and why it is false.

You state in Item 7 of your first June 6 email that, "COA insists that it DOES NOT tamper with its software codes." Please note that Mr. Shackleford never accused the management of Casino Bar themselves of intentionally cheating, so your statement does not contradict anything in the report. Casino Bar may have been provided with the faulty software without their knowledge. The origin of the unfair code is unknown to Mr. Shackleford.

While Mr. Shackleford understands your concern about harm to your casino's reputation from the article in question, trying to have him permanently remove the article (of which you will not succeed unless you can clearly identify to him which part is not true) would nonetheless not solve the problem. There are at least 2 other similar articles on the Internet at the current time attesting that Casino Bar is dealing seconds, as well as countless messages on message boards voicing sentiments similar to Mr. Shackleford's report.

Mr. Shackleford maintains his suggestion that Casino Bar continue to review their software and address the issue discussed above. Mr. Shackleford maintains his offer that at any time in the future, Casino Bar may request that he perform one complimentary retest the Casino Bar blackjack game. If the results of this new test are different from the previous conclusions, he will print an update on his web site indicating that whatever previous problem that was reported with the blackjack game now appears to be fixed. This would certainly help to restore Casino Bar's reputation. While as courtesy to you the first retest is complimentary, any additional retests will be at the expense of Casino Bar for Michael Shackleford's time and any money lost.

Mr. Shackleford still awaits your rebuttal of his conclusions from an expert, as previously agreed. While the waiting period has already expired, as pure courtesy to you he will continue to wait until Monday, June 24. However, unless you succeed in procuring a persuasive expert within such time, Mr. Shackleford plans on reposting the article on his site on that date.

Very truly yours,

(name deleted), Esq.