Video Poker machine glitch: cheating or not ??

[Alan Mendelson]

do you believe Rob's story about the $2 dealt royal and the accidental double up? Maybe we can give Rob a point for this one to make this a three-way tie?

I have no reason to doubt the story, because no one that I know of has ever said to me it isn't true.

I think the reality is that someone who has played so much video poker can have all of these various experiences. I will say this -- I find it hard to believe someone who played only a limited amount of VP could experience so much. So the more "stories" I hear, the more I have to think that Rob did a lot more playing than he admitted to. Especially his recent run of big wins and royals.... I doubt they all happened in just a few hours of play.

[Dan Druff]

Yes, I have. Since the federal prosecutors admitted they were "overplaying their hand" by going after Nestor & Kane, it looks like the final scoreboard for this thread turned out to be:

arcimede$: 1 (for saying they shouldn't be charged, and the feds agreed)
quahaug: 1 (ditto)
Rob Singer: 0 (for saying they should have been charged, but legal professionals saw otherwise)

My question to you, Alan and others, is do you believe Rob's story about the $2 dealt royal and the accidental double up? Maybe we can give Rob a point for this one to make this a three-way tie?

Actually, I think they should have been charged and convicted -- but not of either hacking or wire fraud.

They should have been convicted of theft.

Indeed, they were not "hacking" anything. That charge was ridiculous.

Wire fraud was also ridiculous, as the fraud did not occur through mail or telephone communication.

They were guilty of theft, as they were knowingly using a glitch in a machine to cause it to pay out 10x the intended amount. Similarly, if you notice an ATM is spitting out $200 when you try to withdraw $20 (and only removing $20 from your account), you are committing a crime by repeatedly going to that ATM and requesting $20, knowing you'll receive $200.

That's basically what these guys did. They didn't create the bug, but they definitely took advantage of it in order to steal.

This is MUCH different than noticing a machine with incorrect payouts that make it hugely +EV for the player.

For example, if a Jacks-or-Better video poker machine was set to pay 50 for a flush instead of 5, you would not be committing a crime by playing it and winning huge. It is not the player's responsibility to provide the casino with an edge. If the casino wrongly prices their payouts, they have to eat it.

However, this was a different situation. The machine's payouts were set correctly, but a separate bug made the machine exploitable to where it could be stolen from after the hand's conclusion. That was definitely theft.

[Alan Mendelson]

Actually, I think they should have been charged and convicted -- but not of either hacking or wire fraud.

They should have been convicted of theft.

I heard of a player who was at a machine that had a glitch and was awarding too many "comp points" for play. If you were the one playing that machine and you knew the machine was awarding you too many comp points would that also be theft?

What if you knew the floorman at your blackjack table was awarding too many comp points to the players or was "over rating" them. Would that also be theft?

I think the situation with an ATM is entirely different. However, I don't know what the law is about an ATM that spits out too much money.

[Dan Druff]

I heard of a player who was at a machine that had a glitch and was awarding too many "comp points" for play. If you were the one playing that machine and you knew the machine was awarding you too many comp points would that also be theft?

What if you knew the floorman at your blackjack table was awarding too many comp points to the players or was "over rating" them. Would that also be theft?

I think the situation with an ATM is entirely different. However, I don't know what the law is about an ATM that spits out too much money.

No, too many comp points would be in the same category as a machine with mistakenly set high payouts.

It is not the player's responsibility to determine the "fair" payout of machines, either in real money or comps. Even if the player can be proven as an expert who knew the machine was incorrectly set, there is still no requirement that the player only stick to losing games.

However, intentionally exploiting a bug where a machine pays you too much by a factor of 11 is a different story. Here you are not simply playing a profitable machine, but instead exploiting a bug in the system to steal from it.

[Dan Druff]

Interestingly, there was a case in 2001 where a guy exploited severe overcomping machines, and he was both arrested and backroomed.

He sued the casino, and actually won a fairly large settlement. It was determined he was unlawfully detained and arrested, as he was simply playing the machine as set, and did not do anything differently to exploit them. There was no violation of the law on his part by simply recognizing the best-comping machines and choosing to play them.

[Count Room]

Actually, I think they should have been charged and convicted -- but not of either hacking or wire fraud.

They should have been convicted of theft.

Indeed, they were not "hacking" anything. That charge was ridiculous.

Wire fraud was also ridiculous, as the fraud did not occur through mail or telephone communication.

They were guilty of theft, as they were knowingly using a glitch in a machine to cause it to pay out 10x the intended amount. Similarly, if you notice an ATM is spitting out $200 when you try to withdraw $20 (and only removing $20 from your account), you are committing a crime by repeatedly going to that ATM and requesting $20, knowing you'll receive $200.

That's basically what these guys did. They didn't create the bug, but they definitely took advantage of it in order to steal.

This is MUCH different than noticing a machine with incorrect payouts that make it hugely +EV for the player.

For example, if a Jacks-or-Better video poker machine was set to pay 50 for a flush instead of 5, you would not be committing a crime by playing it and winning huge. It is not the player's responsibility to provide the casino with an edge. If the casino wrongly prices their payouts, they have to eat it.

However, this was a different situation. The machine's payouts were set correctly, but a separate bug made the machine exploitable to where it could be stolen from after the hand's conclusion. That was definitely theft.

I'm going to remain neutral as to whether this should be considered theft. I wanted to draw attention to another story that was far more widespread back in the 1940's. After World War II, Las Vegas casinos lost hundreds of millions of dollars (in 1940's dollars, no inflation adjustment!) to large crowds of people called "rhythm players" that took advantage of a faulty mechanical lever in slot machines. The procedure required some precise timing maneuvers with the slot handle to artificially create jackpots. All of this got started with a discovery by an Idaho farmer and it eventually became taught in formal classes. If this could also be considered theft, it made the Nestor & Kane case look like small potatoes (no Idaho pun intended). The situation was eventually quashed by a new item called a variator for the gears in the slot machines.

I think I read about this incredible story from an old edition of "Scarne's Complete Guide to Gambling" that my dad had in his library, so information from Google may be scarce. "Rhythm Players", "Slot Machines", "Variator", "1940's", etc. may be promising search terms if interested in a little known fact of history that once shook Las Vegas' slot revenues to the core.

[arcimede$]

There was a machine at Sam's Town that used to kick out more coins than there were credits. I played it occasionally but did not play it any differently than I played any other machine. However, there was this one guy who used to continually put in money, play a short while and then cash out ... over and over again.

[redietz]

I bring this up as a point of debate since it tangentially relates to this topic. Occasionally a sports book will put out a reversed line or wrong line. Somebody makes an error, and the line is there which does not match any other book's line. Now an online book always has the option, if it catches its error, of canceling the wager up to the start time of the event. I don't believe an LV book has that same option, but I will check.

Now here's my question -- Is taking advantage of a wrong or reversed line illegal, immoral, or just being smart? And the followup: if you do it, should you take maximum advantage?

This question popped up recently as an offshore had a wrong line for a prop. It's kind of surprising, given the number of prop bets these days, and the fact that sometimes there is no obvious "right" line, that more errors aren't made. I knew the prop bet line was wrong; it was +172 instead of -172. Although I am usually merciless when it comes to attacking books, I actually do not go nuts when this occurs. I made a very modest wager, and understood I was at risk for having the wager canceled before the event began. My ideas are (1) I don't want some monster bet to draw attention to the error, (2) I don't want a book closely monitoring my large bets or my action, and (3) I want them to understand that I could have whacked them but I didn't, so they should bend over backwards for me down the road.

I'm curious as to what the various forum folks would have done.

[Alan Mendelson]

Redietz consider this: there are many retailers who make an error in the pricing of their merchandise and still honor the incorrect price. Are the customers doing something immoral, illegal or wrong when they buy an item that is priced too low? Do the stores honor the price for the sake of good customer service?

[Count Room]

Redietz: Your actions regarding the sportsbook sound like the smartest moves to make at the time. I most likely would have done the same.

When I look at the Kane and Nestor case, it appears those guys got greedy and started winning too much in one sitting. Regardless of how one may feel whether it is theft or not, they just simply drew too much attention to themselves. They could have done this quietly with small winning hands for many years to come and this story would never have come to light.

This is turning into a fascinating debate as to when it is immoral to take advantage of another entity's error.

In this adult Social Darwinist world, people are generally expected to pay full price for the financial errors they make (unless you were an investment bank back in 2008).

Happy Thanksgiving!

[Count Room]

Apologies for the double post.

This thread has become interesting enough for me to bring forth the Omar Siddiqui case.

Through a kickback scheme with vendors in the late 2000's, Mr. Siddiqui stole more than $60 million from his employer, Fry's Electronics, to gamble and lose as a whale in Las Vegas.

General Case Story

6 years in prison for stealing $60 million

Is it OK for the casinos to keep that $60 million since it would be considered taking full advantage of the the moral failings (or perhaps a moral "glitch") of a compulsive gambler? If so, then why wouldn't it be OK for Kane and Nestor to take full advantage of a software glitch by the casino (and perhaps IGT) to the tune of a relatively paltry $400,000 or so?

Sometimes I have to wonder whether these "moral rules" only apply to the little people, but not large, powerful entities (which helps to keep those big entities big!).

PS. 6 years in prison for a $60 million heist is also a crazy light sentence, but that's beside the point here.

PPS. OK, now I go. Happy Thanksgiving!

[Dan Druff]

I'm going to remain neutral as to whether this should be considered theft. I wanted to draw attention to another story that was far more widespread back in the 1940's. After World War II, Las Vegas casinos lost hundreds of millions of dollars (in 1940's dollars, no inflation adjustment!) to large crowds of people called "rhythm players" that took advantage of a faulty mechanical lever in slot machines. The procedure required some precise timing maneuvers with the slot handle to artificially create jackpots. All of this got started with a discovery by an Idaho farmer and it eventually became taught in formal classes. If this could also be considered theft, it made the Nestor & Kane case look like small potatoes (no Idaho pun intended). The situation was eventually quashed by a new item called a variator for the gears in the slot machines.

I think I read about this incredible story from an old edition of "Scarne's Complete Guide to Gambling" that my dad had in his library, so information from Google may be scarce. "Rhythm Players", "Slot Machines", "Variator", "1940's", etc. may be promising search terms if interested in a little known fact of history that once shook Las Vegas' slot revenues to the core.

This would actually not be theft, whereas the Nestor & Kane one should be.

Using timing, you are simply using your own skill to beat the game under its own rules. (There are no requirements in slot play that you have to pull the arm at a given time. It's your choice!)

Nobody could be convicted of anything by using this exploit today, and I am assuming it was the same in the 1940s. (It would, however, be a crime to use an electronic device to help you determine the exact timing!)

The Nestor & Kane one is different, as they were actually NOT playing by the machine's set rules, and rather exploiting and obvious bug to force it to pay a winning hand 11 times.

The bigger risk of doing this in the 1940s would be getting discovered and killed by the mob!

[Dan Druff]

Apologies for the double post.

This thread has become interesting enough for me to bring forth the Omar Siddiqui case.

Through a kickback scheme with vendors in the late 2000's, Mr. Siddiqui stole more than $60 million from his employer, Fry's Electronics, to gamble and lose as a whale in Las Vegas.

General Case Story

6 years in prison for stealing $60 million

Is it OK for the casinos to keep that $60 million since it would be considered taking full advantage of the the moral failings (or perhaps a moral "glitch") of a compulsive gambler? If so, then why wouldn't it be OK for Kane and Nestor to take full advantage of a software glitch by the casino (and perhaps IGT) to the tune of a relatively paltry $400,000 or so?

Sometimes I have to wonder whether these "moral rules" only apply to the little people, but not large, powerful entities (which helps to keep those big entities big!).

PS. 6 years in prison for a $60 million heist is also a crazy light sentence, but that's beside the point here.

PPS. OK, now I go. Happy Thanksgiving!

The casino can't be expected to investigate where the guy is getting his money to gamble. That's not reasonable.

If they knew he was embezzling and still let him gamble with it, then they would be at fault.

I'm not a defender of casinos, by the way. For example, I think the law that allows them to CONFISCATE chips when a person cashes them in and admits they belong to someone else is TERRIBLE. For example, if you carry a 5k chip to the cage, and they ask, "Where did you get this?", and you answer, "Oh, a guy I knew owed me some money, so he paid me with this", they will take the chip and give you no money. This is LEGAL!

Guess where the chip ends up? Yup, they keep it. They don't attempt to find the "rightful owner" (in this case, the guy who gave it to you) and return it to him. Nor can he go back and claim it himself. They just keep it.

The MGM did this to longtime poker community member Nolan Dalla in 2007.

[Alan Mendelson]

The casino can't be expected to investigate where the guy is getting his money to gamble. That's not reasonable.

I think there is a requirement under the Nevada gaming regulations that the casinos must stop players who they know are addicted or have other problems and should not be gambling. The casinos are also not allowed to help money laundering, and gambling stolen money is money laundering.