The controversy has been swirling in online poker forums for a few weeks, but now it's official: Absolute Poker has been hacked.

In a letter to regular players, Absolute Poker owner Joe Norton conceded that his site was compromised by "a high-ranking, trusted consultant employed by [Absolute Poker]."

"As has been speculated in several online forums, this consultant devised a sophisticated scheme to manipulate internal systems to access third-party computers and accounts to view hole cards of other customers during play without their knowledge," the letter says.

The e-poker blogosphere has been in a frenzy for several weeks since several individuals reported the ability to see others' cards during play. Such a hack is potentially devastating to the entire industry because if players believe that games are rigged or that cheaters can break the systems' defenses, they may stay away from all such sites in droves.

Absolute Poker reportedly is contacting the individuals whose accounts were violated through the theft of an .xls file. "We will pay for all losses suffered by the affected players as soon as our audit is finished and the amounts are determined," Norton's letter says.

Some reports say Absolute Poker has been offering affected users a $500 voucher to play on the site, but those reports have not been confirmed.

— Tim Wilson, Site Editor, Dark Reading