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It seems there are more rumors about the Dunes flying around these days than about who killed JFK. We have remained quiet up until this point for a variety of reasons, each of which will be addressed below. This article is not written to shock or alarm any customer, but to remind them of what goes on at every sportsbook, and the constant vigilence needed to maintain security as in any online industry. We have remained quiet up to this point, agonizing over how to approach each issue, increase security, be honest with the public, and keep everyone duly informed without hurting ourselves or our customers, and the industry. Our decision to be brutally honest will hopefully serve to keep the public's confidence in us and to bring together a usually divided industry on an issue pivotal to the future of us all.
1. Many questions have been raised recently regarding our stability and financial position. Rumors are running rampant and while some are based in fact, most are so off base that we can't even fathom how or why they began. To put it bluntly: We are NOT going anywhere. We are NOT broke. We ARE paying our customers.
This industry thrives on egos and jealousy. This is probably the biggest obstacle that stands in the way of true acceptance and legitimacy. While the books hold a certain respect for one another, don't think that they don't summon the band and get out the pom poms when they hear one SMIDGEN of a rumor that someone is going out of business or someone didn't get paid.
Having said that, let me say that our payouts have, at times, been slower than they were last summer and early fall. The reasons behind this (other than JR's stinginess) can be found in issue number TWO.
2. We have been hacked three times since October, and there is no telling how many other books have been affected by this and how much damage has been done. Sit down…the description of how we discovered this is rather unbelievable:
We have had a Russian customer (whom we will not name at this time) just about since we opened our doors. In the beginning he was a very good customer. He used his credit card, but provided the necessary forms and documentation with no problems. He won some money, we credited back his cards and sent him a few Western Unions and a bank wire. For a few months we heard nothing from him. In September, he loaded up his account with 5 figures worth of credit card charges and started firing away. We were not concerned (although perhaps we should have been), because this customer had been so good in the past. He lost, and kept losing time and time again. At any rate, on October 23, 2000, he ran up $60,000 on 22 credit cards. This obviously sent up a red flag; we stopped his account immediately, and contacted him for the documentation we were fairly sure he would not be able to produce. We went back and forth on whether to just credit the cards back when on November 13, 2000 MasterCard International informed us all that we could no longer issue credits to MasterCard. Coincidentally enough, all 22 credit cards were MasterCard. We knew we would probably be seeing these on our chargeback lists, but there was nothing we could do.
About a week before Thanksgiving, I received a chat request from our "live chat with an operator" feature. It was our Russian friend. He asked why his account was stopped, I informed him of the credit card fraud, and how damaging this was and he then proceeded to inform us that we had a security hole. Of course I was defensive and skeptical…until he produced my network login and password. He then proceeded to produce everyone else's logons and passwords to not only our network, but to our Esports Software as well. After calling Jim and JR, the other two principal managers in the office, to my computer and showing them this……the Russian sends me a URL. I click on it and am shown a copy of the directory structure of our hard drive. Not one person said a word for at least a full minute. After picking our chins up off the floor we moved the conversation to the ICQ chat program for more privacy. Over the next five hours, of very careful discussions with this guy, we were told that ALL sportsbooks were easy targets for such fraud. He demonstrated this by going through the list of sportsbooks found on the OSGA and producing copies of their hard drives and daily Internet-processed credit card reports. Customer names, addresses, credit card numbers and expiration dates were all easily accessible to any computer hacker who chose to look for such a hole. We were absolutely speechless. We had NO idea what to do with this information. Of course it should be immediately released to the public, but would this cause a "run on the bank" so to speak and shake every customer's confidence in an offshore industry that already walked a tightrope when it came to credibility? We knew that by speaking up we could hurt everyone and by keeping quiet we would also hurt everyone. We decided to keep quiet until we came to a decision with which everyone was comfortable. We also consulted with security experts, Esports, programmers and software experts.
As rumors about our stability, intentions and future started to explode, we became more unsure of who to turn to and how to fix this situation. On December 15, 2000 we removed our online credit card processing to prevent the hackers from retrieving customer credit card information. We would only process over the telephone and ONLY after receiving all necessary documentation to protect ourselves. This of course angered and confused many customers. What everyone must realize is that just as customers often don't trust us, we are now forced not to trust the customer. A few rotten apples have ruined the entire bushel so to speak.
As of right now, we are still in limbo, and still trying to sort out this out. The effects of the credit card fraud are still rolling in. Just to give everyone an idea of how badly WE were hit our chargebacks went from $0 in August, to $2600 in September, $16,000 in October, $50,000 in November, and $51,000 for December. It's not often a book throws ANY of their financial information out there; however, in this case, I feel it helps illustrate the severity of the situation. Now did this kill us financially? NO. It certainly didn't make us happy, and it is money we would rather have in our pockets, but it did not hurt our ability to pay our customers. What it did hurt was our confidence in our sportsbook software, and the security of taking wagers over the Internet.
We have no proof that any damage beyond the theft of credit card numbers has taken place. We also are not sure that there is not more damage. As was discussed on one of the forums, we had a customer hit THREE 7 team parlays, three DAYS in a row over the Internet in October. Ranging from $600 to $850 a parlay and paying 70-1 odds. He, of course, requested a payout, and we were, of course, skeptical, but after a week of going over and over the account, we had no choice but to pay. Did this kill us financially? NO. We welcome another book to come forward and tell us all of a similar situation. The odds of this happening legitimately are astronomical.
What this all boils down to is this: we are simply NOT going to pay customers the same day a request is made until we are certain that our system is secure, and the transactions in each customers account are valid. Right or wrong and big or small, we have to take a HARD look at every request going out the door and listen to the tape of every play over the phone and check every session a customer had on the Internet to be as comfortable as possible when we send the check, Western Union, wire or credit back out the door. Even though $100 isn't much to us (as many customers would point out)….a thousand people requesting $100 is. It starts to add up.
We are the newcomer on the block. We burst on to the scene and grew rapidly. We compete with books that are much larger than us and who have been around for years. Is this happening to them? It is hard to tell because the number and amount of transactions that flow through their computers every day is much larger than ours….and it would be easier to camouflage any clandestine activities. The managers here at Dunes (including myself) may not have taken the correct route by not announcing these occurrences earlier. We were fearful that "coming out of the closet" would sign our death warrant either in the form of a public outcry, or in angering the Russian customer so that he would do further damage to us or others. Well there you go…..now you have one reason for the increase in time it takes us to pay our customer. Now on to issue number THREE.
3. Dunes is undergoing a complete reorganization. NO ONE PANIC. This is NOT a sale, takeover, Chapter 11 filing (or anything else scary and horrible you can come up with). All of us here laugh when we hear that we're going out of business. The joke in the office is "we're not that lucky". A few of the principals involved in the company have decided that the post-up business isn't as much fun as they thought. They are no longer enamored of handling customer problems or the day to day trials and tribulations of close to 80 employees. On approximately January 15, 2001 the Dunes will be under a new management structure, and will have a different focus. Please take note that I said "structure", not personnel. We will be shifting our player focus to the Internet, and will be replacing a large majority of our equipment even though what we have is only a year old. Looking back we realized that a lot of mistakes were made and that things could have been done much more efficiently. Our banking situation will be positively affected by all of these changes. We are moving to a new bank account offshore that is more stable, flexible and appropriate for an Internet gaming company. We were unsure about making an announcement of this nature….just wanting the transition to progress seamlessly. Of course we then woke up and realized what industry we were working in and decided to just lay it all out on the table for better or worse.
In summary, I would like to thank everyone for reading this novel of a press release and would like to leave everyone with the following highlights:
1. Yes, we have been experiencing problems---just not of a financial nature.
2. We are working feverishly to overcome each and every one of these issues I have discussed, and with a little patience and help from everyone, we will only be stronger in the long run.
3. We are NOT going anywhere, and only grow stronger by the day. Everyone of us at Dunes loves this industry and the people in it! Each and every one of our customers will always be paid in full, even if I have to sell my extensive shoe collection to help do so.
Sincerely, and with best wishes from everyone at Dunes for a Healthy, Happy and Prosperous New Year,
Samantha
1. Many questions have been raised recently regarding our stability and financial position. Rumors are running rampant and while some are based in fact, most are so off base that we can't even fathom how or why they began. To put it bluntly: We are NOT going anywhere. We are NOT broke. We ARE paying our customers.
This industry thrives on egos and jealousy. This is probably the biggest obstacle that stands in the way of true acceptance and legitimacy. While the books hold a certain respect for one another, don't think that they don't summon the band and get out the pom poms when they hear one SMIDGEN of a rumor that someone is going out of business or someone didn't get paid.
Having said that, let me say that our payouts have, at times, been slower than they were last summer and early fall. The reasons behind this (other than JR's stinginess) can be found in issue number TWO.
2. We have been hacked three times since October, and there is no telling how many other books have been affected by this and how much damage has been done. Sit down…the description of how we discovered this is rather unbelievable:
We have had a Russian customer (whom we will not name at this time) just about since we opened our doors. In the beginning he was a very good customer. He used his credit card, but provided the necessary forms and documentation with no problems. He won some money, we credited back his cards and sent him a few Western Unions and a bank wire. For a few months we heard nothing from him. In September, he loaded up his account with 5 figures worth of credit card charges and started firing away. We were not concerned (although perhaps we should have been), because this customer had been so good in the past. He lost, and kept losing time and time again. At any rate, on October 23, 2000, he ran up $60,000 on 22 credit cards. This obviously sent up a red flag; we stopped his account immediately, and contacted him for the documentation we were fairly sure he would not be able to produce. We went back and forth on whether to just credit the cards back when on November 13, 2000 MasterCard International informed us all that we could no longer issue credits to MasterCard. Coincidentally enough, all 22 credit cards were MasterCard. We knew we would probably be seeing these on our chargeback lists, but there was nothing we could do.
About a week before Thanksgiving, I received a chat request from our "live chat with an operator" feature. It was our Russian friend. He asked why his account was stopped, I informed him of the credit card fraud, and how damaging this was and he then proceeded to inform us that we had a security hole. Of course I was defensive and skeptical…until he produced my network login and password. He then proceeded to produce everyone else's logons and passwords to not only our network, but to our Esports Software as well. After calling Jim and JR, the other two principal managers in the office, to my computer and showing them this……the Russian sends me a URL. I click on it and am shown a copy of the directory structure of our hard drive. Not one person said a word for at least a full minute. After picking our chins up off the floor we moved the conversation to the ICQ chat program for more privacy. Over the next five hours, of very careful discussions with this guy, we were told that ALL sportsbooks were easy targets for such fraud. He demonstrated this by going through the list of sportsbooks found on the OSGA and producing copies of their hard drives and daily Internet-processed credit card reports. Customer names, addresses, credit card numbers and expiration dates were all easily accessible to any computer hacker who chose to look for such a hole. We were absolutely speechless. We had NO idea what to do with this information. Of course it should be immediately released to the public, but would this cause a "run on the bank" so to speak and shake every customer's confidence in an offshore industry that already walked a tightrope when it came to credibility? We knew that by speaking up we could hurt everyone and by keeping quiet we would also hurt everyone. We decided to keep quiet until we came to a decision with which everyone was comfortable. We also consulted with security experts, Esports, programmers and software experts.
As rumors about our stability, intentions and future started to explode, we became more unsure of who to turn to and how to fix this situation. On December 15, 2000 we removed our online credit card processing to prevent the hackers from retrieving customer credit card information. We would only process over the telephone and ONLY after receiving all necessary documentation to protect ourselves. This of course angered and confused many customers. What everyone must realize is that just as customers often don't trust us, we are now forced not to trust the customer. A few rotten apples have ruined the entire bushel so to speak.
As of right now, we are still in limbo, and still trying to sort out this out. The effects of the credit card fraud are still rolling in. Just to give everyone an idea of how badly WE were hit our chargebacks went from $0 in August, to $2600 in September, $16,000 in October, $50,000 in November, and $51,000 for December. It's not often a book throws ANY of their financial information out there; however, in this case, I feel it helps illustrate the severity of the situation. Now did this kill us financially? NO. It certainly didn't make us happy, and it is money we would rather have in our pockets, but it did not hurt our ability to pay our customers. What it did hurt was our confidence in our sportsbook software, and the security of taking wagers over the Internet.
We have no proof that any damage beyond the theft of credit card numbers has taken place. We also are not sure that there is not more damage. As was discussed on one of the forums, we had a customer hit THREE 7 team parlays, three DAYS in a row over the Internet in October. Ranging from $600 to $850 a parlay and paying 70-1 odds. He, of course, requested a payout, and we were, of course, skeptical, but after a week of going over and over the account, we had no choice but to pay. Did this kill us financially? NO. We welcome another book to come forward and tell us all of a similar situation. The odds of this happening legitimately are astronomical.
What this all boils down to is this: we are simply NOT going to pay customers the same day a request is made until we are certain that our system is secure, and the transactions in each customers account are valid. Right or wrong and big or small, we have to take a HARD look at every request going out the door and listen to the tape of every play over the phone and check every session a customer had on the Internet to be as comfortable as possible when we send the check, Western Union, wire or credit back out the door. Even though $100 isn't much to us (as many customers would point out)….a thousand people requesting $100 is. It starts to add up.
We are the newcomer on the block. We burst on to the scene and grew rapidly. We compete with books that are much larger than us and who have been around for years. Is this happening to them? It is hard to tell because the number and amount of transactions that flow through their computers every day is much larger than ours….and it would be easier to camouflage any clandestine activities. The managers here at Dunes (including myself) may not have taken the correct route by not announcing these occurrences earlier. We were fearful that "coming out of the closet" would sign our death warrant either in the form of a public outcry, or in angering the Russian customer so that he would do further damage to us or others. Well there you go…..now you have one reason for the increase in time it takes us to pay our customer. Now on to issue number THREE.
3. Dunes is undergoing a complete reorganization. NO ONE PANIC. This is NOT a sale, takeover, Chapter 11 filing (or anything else scary and horrible you can come up with). All of us here laugh when we hear that we're going out of business. The joke in the office is "we're not that lucky". A few of the principals involved in the company have decided that the post-up business isn't as much fun as they thought. They are no longer enamored of handling customer problems or the day to day trials and tribulations of close to 80 employees. On approximately January 15, 2001 the Dunes will be under a new management structure, and will have a different focus. Please take note that I said "structure", not personnel. We will be shifting our player focus to the Internet, and will be replacing a large majority of our equipment even though what we have is only a year old. Looking back we realized that a lot of mistakes were made and that things could have been done much more efficiently. Our banking situation will be positively affected by all of these changes. We are moving to a new bank account offshore that is more stable, flexible and appropriate for an Internet gaming company. We were unsure about making an announcement of this nature….just wanting the transition to progress seamlessly. Of course we then woke up and realized what industry we were working in and decided to just lay it all out on the table for better or worse.
In summary, I would like to thank everyone for reading this novel of a press release and would like to leave everyone with the following highlights:
1. Yes, we have been experiencing problems---just not of a financial nature.
2. We are working feverishly to overcome each and every one of these issues I have discussed, and with a little patience and help from everyone, we will only be stronger in the long run.
3. We are NOT going anywhere, and only grow stronger by the day. Everyone of us at Dunes loves this industry and the people in it! Each and every one of our customers will always be paid in full, even if I have to sell my extensive shoe collection to help do so.
Sincerely, and with best wishes from everyone at Dunes for a Healthy, Happy and Prosperous New Year,
Samantha
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