The Tribune

A web shop operator yesterday said it had detected fraud by players ‘gaming the system’, hitting back at accusations it was refusing to pay out winnings.

A Paradise Games spokesperson told Tribune Business that its system had witnessed an unusual spike in player activity relating to the now non-existent Iowa state lottery numbers.

They said this data, and all-related evidence, had been passed to the Gaming Board, which is expected to adjudicate on a matter that impacted the whole Bahamian web shop industry “in a couple of days”.

Vehemently refuting claims that Paradise Games was refusing to pay out legitimate player winnings, the spokesperson said the issue arose from persons exploiting information asymmetries and timing differences to manipulate the gaming system to their advantage.

They explained that the ‘winnings’ in questions were being claimed “on a ticket for a [US] state lottery” that does not exist”. The Iowa three and four-ball lottery has been discontinued as “a cost savings exercise” by that state, which has now partnered with Indiana’s state lottery to publish and share the latter’s results.

The Paradise Games spokesperson explained that the opportunity for manipulation arose because “no public announcement or statement that they share the same results” was made by either Iowa or Indiana to inform all market players.

And, with Indiana publishing its draw results 30 minutes to the non-existent Iowa lottery, the spokesperson explained that players ‘in the know’ were able to purchase winning ‘Iowa’ numbers that were already known.

Suggesting that this amounted to fraud and market manipulation, the Paradise Games spokesperson said: “This is not unique to Paradise Games. This happened throughout the Bahamas. Any gaming house that was providing Iowa had a similar experience.

“Where we were able to figure out what was happening is that our system is based on trends. It [Iowa] was a very modestly played house, and we were able to see a peak in activity with those specific accounts.

“What we then did immediately was to make a report to the Gaming Board, and provide all the evidence reporting what we flagged. It has been done.”

Paradise Games’ explanation is vastly different to the allegations made earlier this week by several unnamed patrons, who claimed they were being given “the run around” by the web shop over payouts ranging from $32,000 to $60,000. The total amount was pegged at $180,000.

The web shop spokesperson, though, said the industry’s technology and detection systems, and rules and regulations, had worked exactly as they had supposed to in preventing possible fraud.

“One of the major problems here is that Bahamians think the gaming industry is localised and controlled locally,” they told Tribune Business. “The platforms are tested internationally and for good reason - to capture these trends when they break.

“This is a business done professionally, and correct and legitimate action was taken to stop these guys exploiting the system. The expectation is that the Gaming Board will give an official ruling on it in a couple of days. We anticipated it already, but they’ve got a mountain of reports from the rest of the industry on this activity.

“The evidence was provided immediately to the Gaming Board when it happened. This is par for the course in doing business, where people seek to cheat, undermine and take advantage of anything they can. The company was entirely right to refuse payment.”

The spokesperson added that Paradise Games’ website outlined the legal terms and conditions which players had to abide by, adding: “This was done as part of developing a legalised gaming industry in this country.

“This is a highly regulated market with people using internationally-recognised and tested technology to provide gaming for clients. It’s not something somebody made up in their backroom, like they did 20 years ago.”