Sometimes the truth is in the shadows. Statements can be twisted and intent can be cast into question. But when an issue is illuminated from many directions, and the dance between actions and reactions is examined, a clear view can emerge from the shadows.
For months CardSpike had payment issues, and for months the management of Affiliate Media, who operate the CAP and PAP websites, appeared to ignore and defend CardSpike in a fashion that many affiliates felt was uncharacteristic of the way other affiliate programs such as Grand Prive were treated. In a few forums, such as PokerAffiliateListings.com, questions were raised about the seemingly cozy nature of the business relationship between Affiliate Media and CardSpike.
Then, on January 1, 2009, Gambling 911 dropped a new year’s bombshell. They announced that “A number of its (CardSpike’s) affiliates and some industry observers have told Gambling911.com the new online poker room (CardSpike) is owned by some individuals behind Casino Affiliate Programs, also known as CAP….”
(1)
The Casino City Times news staff was investigating the CardSpike situation at the time of the Gambling 911 announcement, although they were not yet ready to run a story on the topic. However, since a news story about the involvement of CAP’s principles with CardSpike had been published, we decided it was appropriate to comment on the situation based on the information we had available at the time. So I made a post in response to the Gambling911 story that stated “I was actually told many months ago that the principals at CAP were the beneficial owners of CardSpike.”
(2)
Gambling 911 then followed up with another story about CardSpike on January 6th based on my post with a headline that read “Corfman Confirms CAP Ownership in CardSpike.”
(3) I want to apologize for any confusion that resulted from the Gambling 911 headline. I did not expect my statement to be sensationalized as a personal confirmation of the ownership of CardSpike by CAP - I was just trying to say that a source who had confided in me had indicated that there was a beneficial ownership relationship. The statement I did make was based on solid journalistic standards since I viewed my source as being highly credible, I had corroborating information from others, and I had documentation, which I had promised not to reveal as a condition of its receipt, that supported the statements made to me.
Also on Tuesday, January 6th an APCW Perspectives video was released on YouTube that outlined the issues raised in the Gambling 911 article of January 1st, specifically outlining the rogue nature of CardSpike, outlining the possible relationship between CAP and CardSpike, and inviting CAP to make a statement to clear up the situation.
(4)
Earlier that week J.Todd had also sent an e-mail request to the management of Affiliate Media (the company that operates the CAP and PAP websites) requesting a statement about the relationship between CAP and CardSpike. Warren Jolly, the CEO of Affiliate Media, responded to the request with an e-mail message that emphatically denied any relationship with CardSpike.
(5) Warren’s response stated: “Cardspike is not controlled or managed by CAP, PAP, nor its parent company, Affiliate Media Inc. CAP, PAP, Affiliate Media, and all company personnel have absolutely no ownership interest, no profits interest and no beneficial interest whatsoever in Cardspike. Any statements to the contrary are untrue and unfair.” Since Warren Jolly and Lou Fabiano are company personnel of Affiliate Media, this statement could only be true if both Warren Jolly and Lou Fabiano had absolutely no ownership interest, no profits interest and no beneficial interest whatsoever in CardSpike.
On APCW Perspectives Friday, January 9th, the existence of the Florida corporation Effective Media Group was exposed. Warren Jolly and Lou Fabiano were shown to be officers of both Effective Media Group and Affiliate Media in the video, making them related companies. So we asked Affiliate Media to issue a statement regarding any relationship between Effective Media Group and CardSpike.
(6)
Warren Jolly responded with a post on the CAP website that was subsequently reposted on the GPWA website.
(7) The post included the following statement: “Effective Media Group, its officers, staff and investors have no direct or indirect ownership in CardSpike.com. EMG operated as performance based consultant ONLY for an offshore investor.” Also, in a video released by CAP on Friday, January 9th Lou Fabiano acknowledged that Effective Media Group provided consulting services to CardSpike.
( 8 ) But no details were offered regarding the nature of the consulting services provided.
We covered the newly revealed relationship between the principles of Affiliate Media and CardSpike in the APCW Perspectives Friday video released on January 16th.
(9) In our video we documented that the services Effective Media Group provided to CardSpike extended beyond mere consulting services and included running the rogue CardSpike affiliate program. And we reported that the CardSpike affiliate manager was an employee of the Effective Media Group. This information was subsequently confirmed by the management of Affiliate Media in a thread on the CAP website
(10).
Next, in a post I made on the GPWA website on January 19th, I established that the Effective Media Group also ran the affiliate program for Absolute Slots.
(11) In the previous statement Affiliate Media had made covering their various business arrangements there was no mention of Absolute Slots. The Absolute Slots connection was also covered in the APCW Perspectives Tuesday video released on January 20th.
(12) Again, the relationship was subsequently acknowledged, but only after it was first exposed by us.
The material presented above illustrates some of the interplay that has taken place between Affiliate Media and those trying to get to the bottom of the situation around CardSpike. It shows a clear pattern of Affiliate Media acknowledging only what they understand can already be proven by others. Why would they adopt this approach rather than being more open and transparent? I believe the simple answer to that question is money. More money for Affiliate Media at the expense of both the affiliates and the affiliate programs they purport to serve.
Think about it. If you are an affiliate and believe the information provided on the CAP website is not biased by conflicting business relationships, then the positions taken by CAP management relating to one program versus another would appropriately influence which affiliate programs you decide to work with. But if there are hidden agendas that effect not only what Affiliate Media management says, but also extend to influencing what others have to say through forum censorship, a fundamental trust is broken.
And if you are an affiliate program, the situation is far worse. Affiliate programs pay unbelievable amounts of money to be certified on CAP - $10,000 per quarter is typical. For that reason many affiliates have already questioned the meaning and value of CAP certification. However, when it is clearly demonstrated that conflicts of interest result in some programs remaining inappropriately certified the value received by affiliate programs in exchange for the certification fees is further diminished. And that leaves aside another more important issue for affiliate programs. How many of them understood that when paying heavy fees for CAP certification they were also providing funding to an organization that had a hidden vested interest in the success of competitive gambling sites?
Now, with that background information, let’s go back and examine the CardSpike ownership question which has been so adamantly denied by the management of Affiliate Media. Suppose you were based in the United States and wished to own and operate an online gaming site. How would you go about doing so?
You would probably begin by researching licensing arrangements and other operational aspects of running a gambling site and the associated costs. And once you made a decision to move forward you would most likely set up a legal infrastructure that would minimize the risk of your being directly tied to the online gambling operation you planned to establish.
A typical way to accomplish this objective would be to set up a shell corporation overseas using a third-party “investor” to license the gambling software, to hold title to overseas bank accounts, and to be officially responsible for various legally sensitive matters. Then you would enter into a performance based consulting and services contract with that legal shell whereby you received compensation for the portion of the revenue you wished to repatriate to the United States in exchange for handling various operational aspects of the online gaming site such as running the affiliate program.
And if it ended up you bit off a bit more than you could chew with the complex issues around integrating software and managing affiliate relationships, you might end up with payment problems and other difficulties that would cause affiliates and players to consider the operation you established to be rogue.
Is this the true nature of the relationship between Effective Media Group and CardSpike? It is certainly interesting to note that it appears the statements made by the management team of Affiliate Media and Effective Media Group would be fully consistent with such an arrangement. And such an arrangement would certainly explain why Cake Poker made a proposal to Casino Affiliate Programs to grant them a license on the network used by CardSpike.
(13) According to the header record in the e-mail message forwarded to me by a confidential source this proposal was copied to Warren Jolly of Affiliate Media sometime before Effective Media Group was incorporated and before CardSpike was launched. Personally, I find this very interesting indeed!
Michael
(1)
www.gambling911.com/gambling-news/cardspike-poker-affiliates-want-answers-cap-010109.html
(2)
www.gpwa.org/forum/cardspike-cap-gambling911-178366.html#post524113
(3)
www.gambling911.com/gambling-news/corfman-confirms-cap-ownership-cardspike-010609.html
(4)
www.gpwa.org/forum/apcw-perspectives-tuesday-01-06-09-a-178394.html
(5)
www.gpwa.org/docs/Affiliate-Media-CardSpike-Relationship-Denial.pdf
(6)
www.gpwa.org./forum/apcw-perspectives-friday-01-09-09-a-178452.html
(7)
www.gpwa.org/forum/cardspike-cap-gambling911-178366/p3.html#post524784
( 8 )
www.casinoaffiliateprograms.com/captv/january2009/cap-tv-community-news-january-16th
(9)
www.gpwa.org/forum/apcw-perspectives-friday-01-17-09-a-178547.html
(10)
www.casinoaffiliateprograms.com/bb/cap-tv-professor-s-community-news-1-16-09-cap-london-cardspike-and-more.33421.html
(11)
www.gpwa.org/forum/absolute-slots-effective-media-group-178579.html
(12)
www.gpwa.org/forum/apcw-perspectives-tuesday-01-20-09-a-178612.html
(13)
www.gpwa.org/docs/CAP-Cake-Proposal.pdf
Dancing Around the Truth About CardSpike
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