> At 1:30 pm on October 6, 2009, a dozen state and local police converged on Andre Nestor's split-level condo on a quiet, tree-lined street in Swissvale. He was dozing on his living room couch when the banging started. “State police! Open up!” The battering ram hit the door seconds later, splintering the frame and admitting a flood of cops into the house.
> Nestor says he started toward the stairs, his hands over his head, when he came face-to-face with a trooper in full riot gear. “Get on the floor!” yelled the trooper, leveling his AR-15 at Nestor's face. Nestor complied. The cop ratcheted the handcuffs on Nestor's wrists, yanked him to his feet, and marched him into the kitchen.
That seems perfectly reasonable for a non-violent crime.
Read till the end. The government seized all his money, and even though he was acquitted (or never tried), they still kept it. And the IRS is after him too.
If you go against the government, you almost never win, regardless of how innocent you are.
John Oliver did a great job explaining the problem this week on his show. Basically, Kane and Nestor might be innocent, but their money is on trial separately, as dumb as that sounds.
You need to sue to get it back. Even if the trial is acquitted. It's a major source of revenue for police. It's one reason why they're becoming more and more militarized.
Police departments actually get a lot of their military-grade equipment free from the federal government. After the military has given away their "obsolete" tanks to police departments, they can order new tanks from defense contractors. This makes the very rich, influential people at the top levels of the military-industrial complex even richer and more influential.
Not quite free, but purchased using grants. It works out, that if they don't take the grants, they'll be in danger of losing funding in the future. These grants aren't just, "Here's a tank". It could be, "here's a tank, and medical equipment"
In essence, their hand is forced to take the gift. There's been backlash about this.
> the IRS even says he legally won it and want to tax him for it
The job of the IRS isn't to pass judgement on the legality of income, just to collect taxes. If you earn money, it's taxable; that's true wether you're a computer consultant, a video poker gambler, a hitman for hire, a drug lord, or Al Capone.
"Bribes. If you receive a bribe, include it in your income."
"Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity."
And of course they want to have it both ways. For example, income from illegal prostitution is taxable, but associated expenses can not be claimed as a business expense.
>And of course they want to have it both ways. For example, income from illegal prostitution is taxable, but associated expenses can not be claimed as a business expense.
It's complicated and I'm not a lawyer (and certainly not trained in reading court judgements), but this appears to be not true in all cases. Commissioner v. Tellier [1] seems to say that with some well-defined exceptions (although it doesn't appear to go into what those exceptions are), expenses incurred in the development of an illegal business are deductible just like they would be for a legal business. Examples given are paying legal defense fees, and rent and wages paid for a then-illegal gambling operation. So it may well be the case that expenses incurred while developing a career as a prostitute (e.g. phone bills, condoms, advertising, hotel rooms, and travel) could be deductible.
edit: Ah, I read a bit deeper and found the exceptions.
Only where the allowance of a deduction would "frustrate sharply defined national or state policies proscribing particular types of conduct" have we upheld its disallowance [...] Further, the "policies frustrated must be national or state policies evidenced by some governmental declaration of them." [...] Finally, the "test of nondeductibility always is the severity and immediacy of the frustration resulting from allowance of the deduction." [...] In that case, as in Hoover Motor Express Co. v. United States,356 U. S. 38, we upheld the disallowance of deductions claimed by taxpayers for fines and penalties imposed upon them for violating state penal statutes; to allow a deduction in those circumstances would have directly and substantially diluted the actual punishment imposed.
So based on that reading (and again, I'm not a lawyer), it seems like expenses a prostitute incurs would be absolutely deductible, because disallowing them doesn't frustrate the criminalization of the activity.
The belief of the IRS is entirely separate from the issue of theft and bringing it up in this context is just confusing the issue. It's like asking "If they believe he earned it, and the sun is rising, is it before noon?"
Not necessarily. Taking somebody else's property is only theft if you didn't have a legal right to do it. For example, if the IRS levied his property to satisfy the tax debt, that would not legally be theft because the IRS is legally entitled to impose levies for that purpose. It also would not mean that they didn't think he earned the levied property. It just means that they wanted the property and had a legal right to take it.
The situation as a whole is pretty crappy, but this part actually makes sense. It was income, and it's taxable. I'm definitely not condoning the fact that the government seized it and hasn't returned it after the acquittal, but the IRS still wanting to tax him for it is expected behavior.
Interestingly, it appears that (according to some very crude, preliminary research), the two men could probably claim their legal fees as deductions, which would lessen the tax burden a bit.
So let's say you are at a casino, and win $20K. It's reported to the IRS. As you're driving home happily whistling away, the police pull you over for illegal "whistling while driving". They find the $20K, and under the Civil Asset Forfeiture law (mentioned above), seize the $20K. Now how are you supposed to pay the taxes? You don't even have the money anymore!
he should have paid taxes immediately upon getting the money. That way IRS would be forced to return money to the casino too. That would be a show to watch :)
If the reporting is accurate, then he really got screwed. Your money is taken despite your never being convicted of anything, and then the IRS taxes you for that money that was taken. What a joke.
Many nonviolent crimes are commonly associated with potential for violence. For example, selling meth is not a violent act, but betting that a meth dealer is a level-headed pacifist is not a very safe wager. (I am not really agreeing with the indiscriminate use of violence out there — just explaining the most logical rationale I've heard.)
And that's why all police officers are already armed with pistols.
A no-knock warrant with holstered pistols would be entirely reasonable in a residential, non-violent crime conviction, don't you think? (Well, I would debate the no-knock part :)
I'm sure that experience was the least of his problems. If it ended there, it might be a good story to tell. The legal headaches which followed were probably worse than a SWAT invasion.
Read about Phil Ivey, who used a similar "hack" to advantage play in Baccarat.
Casinos really can't have it both ways. If they want to make money from people gambling money, they need to assume the risk of losing the gamble through their own incompetence.
If they released a table game with a negative house edge (due to some mathematical miscalculation) and most of the people who played it won money, they would figure out their mistake, pull the game and everyone would keep their winnings. How is this any different?
For those that don't know about the Phil Ivey "hack," here's basically what he is accused of:
A certain card manufacturer had a defect in which there were tiny deviations in the designs on the backs of their cards.
What they would do was the dealer would show all cards face down and Ivey and his accomplice would have the dealer rotate the cards so that the designs were all the same way. Then as they would play, they would have the dealer rotate the numbers 6, 7, 8, and 9 (which are the good cards in Baccarat).
This way they could spot all of the good cards face down based on the designs on the back. Ivey made sure to request a card deck shuffler to ensure the cards weren't rotated during shuffles.
Ivey won tens of millions of dollars doing this and is now being sued by several casinos even though he never touched the cards, didn't have any kind of cheating device, and had the casino agree to every move he did.
Ivey made sure to request a card deck shuffler to ensure the cards weren't rotated during shuffles.
He also requested a dealer that spoke Mandarin (under the story of being superstituous) so he could ask the dealer to perform certain card-turning actions and, most likely, do it under the radar of pit bosses that might have been listening in.
They didn't ask for a dealer that spoke Mandarin for superstitious reasons, they asked because the person actually doing the edge-sorting was Phil Ivey's partner in this, Cheng Yin Sun. Their request to turn cards was under the guise of being superstitious, not their request for a Mandarin speaking dealer.
It's not, and casinos are starting to see courts routinely deny them the least bit of sympathy when people beat them at their own games. The Borgata in Atlantic City was recently trounced in court while attempting to recoup more than $1 million in winnings from a group of Baccarat players that happened to notice that the pre-shuffled cards they were supposed to be using weren't shuffled at all.
Casinos make more than 90% of their revenue from less than 10% of players. When the exploitation of addiction is both your sole reason for existing and your primary source of income, you will find most people unsympathetic to your complaints.
In their study specifically of Bwin (an online casino) they found that "of the 4,222 casino customers, just 2.8% — or 119 big losers—provided half of the casino's take, and 10.7% provided 80% of the take".
However, online casinos don't attract the kinds of customers or the level of action that many physical casinos do. Many older players - who provide the vast majority of slot machine revenues - won't go near online casinos. Further down in this article they quote a marketing consultant for dozens of physical casinos saying "Bwin results are in line with his own estimates, based on confidential casino data, that many U.S. casinos get about 90% of their revenue from 10% of customers."
I have read a few academic papers on the subject, that also indicate numbers from 80% up to 92% being provided by roughly 10% of players. The fact that in the Bwin study, 2.8% provided 50% of the take, is breathtaking as well.
It's different because normally a casino game is the end result of a number of checks and double-checks to make sure the game is square, the math is correct, and no possible cheats exist that the player can exploit.
A game that had a negative house EV would never make it past development. A slot that had a bug that paid incorrectly would (theoretically) never make it past the gaming lab. A deck of cards would be inspected for manufacturing defects before it got into Phil Ivey's hands.
Naturally problems do happen, and things do slip through once in a great while. This is why every slot in every casino has a small sign that reads
MALFUNCTION VOIDS ALL PAYS
..it's written into the gaming laws, and that's the end of the story.
There's a fairly large difference between advantage players and what these guys did.
You have to keep in mind the spirit of the machines. Video poker machines are meant to play poker. If you can somehow find an edge in poker itself that gives you an advantageous position, I'd be for it. Exploiting the software that runs the game, however, isn't fair.
The punishment was blown monstrously out of proportion, but yes, I still think what they did was wrong (and certainly against the law!).
He was changing the bet amounts after the victory. Imagine playing for pesos, and then upon victory tricking the software into playing for Euros.
If he had outsmarted or even figured out a way to control the random number generator through button presses, I'd be all for him. But this is more like finding an ATM that has a bug to not record withdrawals of exactly $420 and then emptying the machine.
It's shouldn't be lost that the casinos love to let players think they have an advantage, even they don't. The old joke is that casinos have a word for people who have a system to beat the house: "Welcome!"
Imagine if you're playing, say, blackjack with a human dealer. After you win a hand but before you collect your winnings, you ask the dealer, "Say, would you mind if I retroactively increase my bet and collect the winnings on that?" The dealer replies, "Sure thing," and pays you accordingly.
I imagine we'd all agree that there's no harm in asking, and that the dealer's compliance is his own problem and a problem for his employer but not your problem. Why does this suddenly change when you're talking to a computer instead of a human? I'm not saying it doesn't change, but I can't entirely figure out why we approach these two scenarios so differently.
For your ATM comparison, it's not uncommon for excessively-clever bank customers to jokingly ask the teller for a million bucks, often in response to a question like, "Is there anything else I can do for you today?" Suppose you found a particularly dim teller who decided to actually hand over a million bucks when you asked. We'd blame the teller and the bank for agreeing to such a thing, not the person who asked, right? Yet when it's an ATM instead of a teller, we blame the person asking.
The gaming laws do not give the dealer the right to change the rules of the game once they have been set by the house and registered with the gaming control board.
If the dealer decides to deviate from the rules, the dealer has committed a crime. The player could also be an accomplice if he was in cohorts with the dealer.
Now in the case of the buggy slot machine, the software has been checked to NOT perform this action. If it does, it's obviously deviating from the rules as well and needs to be shut down. To avoid making the player an accomplice, the "malfunction voids all pays" rule comes into play. If the player knowingly made the slot deviate from the rules, then that falls under the definition of cheating.
> The gaming laws do not give the dealer the right to change the rules of the game once they have been set by the house and registered with the gaming control board.
I don't know about that. Don Johnson, the blackjack player who won more than $15M at the casinos, did so by having them change the rules. He made enough little changes that the odds swung into his favor, and he took the casinos to the cleaners. All valid and legal. From the wiki: He negotiated several changes to standard casino blackjack in order to gain a mathematical edge
The Nevada gaming laws, as I understand it, allow for payout probabilities across a time threshold. E.g. Over a 24hr period this machine pays out 95 cents on the dollar. This gives the casino the ability to make a machine pay out $1.05 dollars to $1 early in the night, then change to worse odds as players become convinced its a hot machine.
So, one could argue the 'hack' was no different than this. The probability of paying out was set to 500 to 1 for 1 hand. This is legal for the casino to do, but you turn the tables and a guy goes to jail?
Regardless, this is just more evidence that the 'house always wins' (even when it looses).
The "time threshold" is the lifetime of the machine. Not minutes, hours, or days.
Slots are fixed to a given payout percentage and then locked in with the gaming board. Traditionally this means a copy of the program is checksummed and stored offsite with the gaming commission. The officials have the right to open that machine at any time and verify that the program matches what is on record.
Casinos cannot dynamically change this payout percentage on the fly. That's a violation of the law. A casino is required to have a certain average payout across all machines, but that does not mean a particular machine needs to obey that percentage. In fact, the penny slots will be set way lower and the high-denomination slots will be set much higher. The average will hit the target.
The "hack" is theft, plain and simple. Putting aside the ability to re-award jackpots, the player found a way to change denomination of credits post-play. This is the equivalent of winning at a table game and then swapping your $1 chips for $100 chips when the dealer is not looking.
My source to the dynamic payout ability is a past co-worker that did work in the casinos back office computer system (think big iron computing). He entertained me with stories of how the casinos manipulated the environment to manipulate you into giving them more of your money. So, I may have misunderstood some of the details. But, am curious where your certainty comes from to see who's closer to the truth here.
Regardless, when a machine pays out in a way that is against the house, my take is that these guys deserve every cent they earned. The gamblers did nothing that the casinos don't do everyday. That is, use the rules of the game to their advantage (ie. manipulate you to make a decision against your own best interest). In this case the rules of the game were broken in an extremely subtle way.
My certainty comes from nearly a decade writing software for slot machines and consulting to various gaming firms in the United States.
When you say your friend's casino "manipulated the environment" to extract more money from patrons, that's a bit vague. Is he referring to things done to patrons outside the domain of the slot machine (e.g. comped alcohol/rooms/food, awarding extra player points, show tickets, etc), or actually changing the performance of a machine while the person is playing?
Because the NV gaming law (the one that most other jurisdictions copy when doing their own) has it plain and clear in Regulation 14.040 Section 6:
"[Slots] must not automatically alter pay tables or any function of the device based on internal computation of the hold percentage"
Now back in the day, the payout percentage target was fixed in an EPROM table, which the gaming board held a copy. Things are a bit more complex now with networked slots. The games are now downloading their code from a central server. A slot floor manager can load a new game into the cabinet with a different payout percentage, but it cannot be done while a player is playing and for a fixed amount of time afterward, and then the game must go offline (and say so publicly) for another fixed amount of time after the new game loads. This time is on the order of 10 minutes or more so a player is guaranteed to know that the game is being changed if a slot floor decides to do this.
Really, a casino really doesn't need to play around with slots to make sure they earn money. The math guarantees it. The casino's job is to make sure the players come and stay as long as possible which seems like what your friend was involved with. There's serious work in collecting all that player data and trying to understand ways to maximize the handle.
Computers are not possessed of free will. You don't really ask them for things. You either compel them to take an action or you don't. Knowingly exploiting a glitch in a computer is like asking somebody for their wallet with a gun to their temple — despite the fact that the exchange could be described as a request and agreement to that request, you have made it impossible for the recipient to decline under the circumstances, so we classify it as something else.
Then a lot of the law will probably seem a little odd to you, because it is pretty solidly on one side of that debate. I'm not qualified to prove this one way or the other, but if you want to understand the law, you have to go in with the assumption that the average human being is in deliberate control of their actions under normal circumstances.
(AFAIK it is pretty hard to come up with a system of law that doesn't start with this assumption without it being either completely ineffectual or very oppressive. Whether or not free will exists, it's at least a very handy abstraction for distinguishing good actors from bad ones.)
Much of the law does seem odd to me, although I don't think that's why.
As far as I can tell, the law is based on a collection of ideas we collectively identify as "justice". In no particular order: that punishment can reform a person so they no longer commit criminal acts, that the threat of punishment can cause a person to refrain from committing criminal acts, and that punishment as revenge is just a good thing.
None of this has anything to do with "free will", whatever it is.
Volition is a huge part of deciding how we want to punish someone and even whether a specific act was criminal at all. If you did something bad of your own free will, the law probably wants to have a word with you. If you were forced into doing something bad against your will, you very well might not be punished at all, and instead the person who forced you to commit the act might be culpable because it was their volition that caused the law to be broken.
I come to a fork in the road, I can choose to go left or right.
A computer comes to a fork in the road, x == 5 so it goes left, it does not have free will and cannot choose to go right, it always goes left if x == 5.
We can argue "but what about determinism" all day but I'm pretty sure you understand what we mean by "free will" and are just being pedantic.
I'm sorry if you think I'm being pedantic, but I truly don't understand the concept. The more I think and talk about it, the less I understand what it's supposed to mean.
As far as I can tell, there are three possibilities:
1. The entity has no internal state. Any stimulus always produces the same response.
2. The entity is deterministic and has internal state. The same stimulus does not necessarily produce the same response. The same stimulus combined with the same internal state will always produce the same response.
3. The entity has some random factor in how it works. The same stimulus does not necessarily produce the same response, even with the same internal state.
Which one is "free will"? It's definitely not 1. It doesn't seem to be 2, from how people talk about it. But neither does it seem to be 3, as it's discussed as something more than just randomness. But what else could there be?
You can think of free will as a control system. Like a PID controller.
A person performs an action, measures how the environment is changed, and modifies their behaviour to get better outcomes (for themselves or other people they care about).
Humans are a bit more sophisticated than a PID controller. While most animals, machines and nature itself are limited to blindly performing actions and measuring the result, people (and crows) can ponder what will happen IF they do something. Several steps ahead. They do not need to perform an action to anticipate the consequence.
When we say the law assumes free will, we mean that the law assumes a good control system. "If you do this we'll put you in a concrete box". The law assumes that threat will work.
This, as it turns out, is a flawed assumption. Many people do not think through their actions (stupid criminals), or they think through their actions and judge them worth the risk (e.g. weed smokers), or they have no other choice of action (e.g. prostitutes).
That appears to be discussing the problem of free will, while assuming that you already know what the problem is, and more importantly what "free will" means. My problem is that I don't know what the very concept of "free will" is, completely separate from questions of whether humans actually have it or how.
No, the concept of what free will is is actually exactly what the series of linked posts is meant to address. Read the first, http://lesswrong.com/lw/no/how_an_algorithm_feels_from_insid..., in particular. "Free will" is a term with the same properties as "sound."
If I understand that analogy then it's basically saying that "free will" is an excessively vague term that evaporates entirely when you describe what you're thinking of more specifically. Which is basically what I'm saying: I don't think it's a coherent concept by itself, and I don't know what people mean when the use the phrase.
I think a good example of people who exploit bugs in people to get rich are con artists, and what they do is usually considered illegal. Sure, there are various reasons why what they do feels wrong, they may have to lie and misrepresent things, they may con people (the elderly, etc.) for which the law has specific protections (France has "abus de faiblesse" -- abuse of weakness -- for exploitation of physically or psychologically vulnerable people), they may use threats... But I would be surprised if there was no instance of a con artist being successfully prosecuted for something which basically amounted to getting a responsible person to give them money through a certain sequence of legal inputs.
I am not personally sure that I believe this to be a good thing -- the flipside of laws that protect people against themselves is that they may make them less responsible, so care is needed. But I think it is not the case that exploiting bugs in people to get money would be systematically legal.
I do think there is a difference (at least in degree, maybe in nature) between computer and human victims: for computers, we feel justified in estimating that people should know that they are dealing with them, and second-guess what they are supposed to do, so that you are blamed if it can be shown that you "knowingly" make them deviate. (Laws have this interesting way of talking about unverifiable states of mind of people, but there can be clues. Did the gamblers who exploited the bug call it a "bug"? If yes, this suggests that they realized it was unintentional, so you may argue whether it is still fair or not that they exploit it, but you can't compare their situation to someone who would hit the bug in good faith.)
With respect to this difference, I think the law is also designed to account for the pragmatical fact that everyone has entrusted their lives and businesses to the dumb computers, without having the technical skill to be responsible for what they do, so some protection is afforded computers they malfunction and/or if they have been incompetently manufactured or programmed. I often wonder whether this is a good thing. (When you consider that people are responsible for computers they own or operate, you often get interesting moral consequences.)
>I think a good example of people who exploit bugs in people to get rich are con artists, and what they do is usually considered illegal.
Many of the richest people around got that way by exploiting some "bug", but no one considers them to have done anything illegal. They find a loophole in banking laws and become a billionaire, or you manipulate people psychologically into buying your products (modern marketing). We call these "business" so it's not illegal to exploit these "bugs".
Suppose we postulate that exploiting a security flaw is wrong, and money obtained by doing so should be forfeit.
The entire business of casinos is exploiting a security flaw in the human mind. By hypothesis, the casinos' money should be forfeit, so they have no moral grounds for trying to get it back from the people who found a way to take some of it.
Conversely, if we backtrack and cancel our postulate, then there is no basis for a claim against a gambler who exploits the software.
be for it. Exploiting the software that runs the game, however, isn't fair.
That is clearly nonsense tho', and that's easy to prove. If you are playing poker with a person, then that is all about exploiting the flaws in that person, this ones timid, that one's reckless, this one has a facial tic, that one drinks too much and so on.
From what I understand, they weren't predicting future hands. They were switching to the main menu and back repeatedly to cash out on the same hand over and over again. They weren't playing the exact same game over and over again, they were cashing out repeatedly from the same win screen.
Poker has very little to do with reading other people's tells. If a player relies on reading another in order to play his game, the first player is probably not going to do too well.
Casinos make money by providing games with various house edges to gamblers. Gamblers and casinos know this, and if it is unfair you have the choice to not gamble. Suppose there were a glitch with the machine that caused it NOT to pay out as it should... The casino would be liable to pay back that money to gamblers under numerous gaming laws. Would you then say that they should not have to pay it back as gamblers should assume risk when they gamble? Also, if it were found that the casino knowingly had a glitchy machine out there that did not pay out there would be people going to jail for that.
If there were a vending machine that gave me all of the money it had in it as change after hitting a combination of buttons, and I travelled to every machine in town and did this, I would be stealing. This is no different. If they calculated the house edge wrong and launched the game to players that would be a different story as the players played in good faith and it is the casino's fault that they did it wrong.
Let's say you lose more than you should have mathematically. Do you get to disable the machine, mark it off with tape as evidence, seize your lost money, have everyone involved in the production of that game arrested, and only then try to figure out what happened?
It is highly likely that software-driven games could have a bug. Therefore the casino could have decided that electronic machines are too risky. Or they could have paid for some kind of insurance. I think the casino, just like many banks and retail stores, are using technology that they do not understand and are unwilling to pay or learn. They want more profit.
Let the seller beware.
Risk assessment != allowing someone to steal from you. Surely the casino knows that any game can be fallible and they could take a loss from it. I guess banks know that their computer systems could have problems and they can lose money from it. But what if I noticed if I exchanged a certain amount of money between my checking and savings account a few times, it doubled my balance? And then I repeated this many times knowing that there was an error in their system?
Now the bank if I had gotten away with it and could not be detected would then chalk it up as a loss and part of the calculated risk of having computerized banking. However if they knew I did this on purpose and took their money should they chalk that up as a loss and allow me to get away with it? No they would want that money back from me and possibly have me arrested for fraud.
The two gamblers in this story broke no laws and did not steal anything yet they were treated as criminals (and still are by the IRS). How is that fair? If anything, the casino should sue the maker of the machine.
There are actually video poker machines in Nevada with a negative house edge. I'm not entirely sure why - except that your upside is limited, you have to play perfectly, and it gets you in the casino.
It's to attract the players. If the negative house edge increases the return across your park of machines, and it's legal (e.g. this is illegal in France), you do it.
I saw several at the Atlantis in Reno less than a year ago. You do have an advantage, and most of the places they exist they're prominently marked. There are generally only a few, and they're often not played much - perhaps because they also don't pay out rewards points.
> Read about Phil Ivey, who used a similar "hack" to advantage play in Baccarat.
So - the slight difference there, and I'm curious whether people see this as a difference without a distinction, but Phil Ivey requested the casino to set up a scenario that would allow him to "hack" and then lied about the reasoning for doing so.
He claimed that he was "superstitious" and that's why he wanted the exact cards and shuffling machine that would allow him to win.
It's not as though he happened on this by accident and simply allowed the casino to continue making a mistake, he arranged the scenario and misrepresented his intentions in doing so.
Personally, I think if you have to lie in order to take advantage of a vendor error, your moral highground starts to crumble beneath your feet.
There is no moral high ground in gambling. The house has the edge, and has designed it to be so. Phil Ivey is a smart gambler and knew how to shift the odds into his favor without cheating. He requested specific things, such as a specific flavor of deck that came from the casino itself and a mandarin speaking dealer. The casino agreed to these requests because it wanted Phil to play. They could have said no.
Phil Ivey's edge sorting hack is phenomenal. That the casino thinks they should be insulated from smart players is unfortunate but it is their prerogative to refuse play. However, it absolutely should NOT be possible to claw back winnings from players who were NOT cheating, only playing smartly.
...but he lied. If they had said, "Hey, why do you want this?" and he said, "I think I've got a system for beating baccarat", and they went ahead anyway, they're idiots.
But they asked and he said that he was just superstitious, it was for luck. At that point he was being disingenuous.
Was it legal? Probably, I'm not a lawyer. Was it ethical? I'm leaning towards no.
Being disingenuous is not a crime, in fact, it's incredibly common. No one should be compelled to reveal their true intentions, regardless of if they're in good faith or bad.
True, as a professional gambler, he wants to find every legitimate edge.
But if you go to them repeatedly with a sophisticated attack and take them for $22m, you have to know they're going to sue you. That's part of what they consider their legitimate edge.
If I was at a poker table and there was someone who could read the backs of the cards I would probably think they were cheating me.
Suppose I'm taking steps to hide my cards, but you take overt acts to see them, like a mirror or something?
At some point a sequence of actions to defeat the protections becomes an act of fraud.
Just because a lock on my door is not unpickable doesn't give everyone a license to steal everything I own.
It's a gray area...once you're asking a specifically chosen dealer to do things and conceal them from the pit boss...come back and repeat it for $20m...at some point it crosses the line from taking advantage of a mistake to orchestrating a scheme to deceive and defraud.
Three friends and I found a broken slot machine an a Casino a few years ago the night before Thanksgiving. It was an older style slot where coins actually still paid out and the darn thing would just spit out more money they you it was supposed to. Obviously we were blown away. We would put twenty bucks in, play one or two times, and then hit payout and get between $50 and $100. So we started cashing out. A lot.
So here's the sketchy part... The machines only hold so much coin, so we kept having to have the attendent call to get the machine filled. I had seen enough movies to know how Casinos feel about this sort thing, so I would go to the bathroom and stuff the cash in my sock. The attendent started to make comments like, "wow, lucky night, huh?". This really spooked us so we eventually took off.
The four of us came in two cars so when my one friend was dropping me off at my house, we looked at other, and then took off back to the casino. When we got there there was someone else playing the machine; doing what we were doing but at a smaller scale. We probably sat and waited three hours for him to finish as he gave us a nod as he walked off.
We cashed out a few more times and then took off around 6am with a great story to tell the family at Thanksgiving dinner.
Slot machines are programmed with a table of payouts based on a rate, typically between 80 and 99%, such that the statistical expected payout overtime will be compounded at that rate. In some jurisdictions (e.g. Vegas), it is legal for the casinos to program a machine at greater than 100%. They do this to attract the players, who will attempt to find the winning machine on the floor. Random numbers still work, so not every payout wins, but over the course of the day you can get a payout. So you may have just walked away from free cash.
Source: I used to work in casino gaming (I wrote the Megapot server used for multi-casino progressives in France)
Re: Megapot server. I've always wondered if those incrementing jackpot banners are actually tied to a real server of if it just increments based on an average. Are those incrementing numbers actually coming from a server in realtime?
In the case of most progressives, there is just a single bank of machines, and they are communicating in realtime (wire delay) between them. When I quit the industry, the Megapot was the first server distributing money across sites in realtime (network delay). There was a similar product offered by IGT at the time, but the incrementing counters were entirely based on play within the casino; casino jackpot sums were batched and shared across the casinos according to a fixed schedule. Our displays were certainly based on real money, and I suspect anyone else in the industry would have to do the same to be legally in the clear.
Ehh... maybe, but I highly doubt it. It was probably 10 years ago now and less then $1,000, and on an Indian reservation (not sure jurisdiction there). I did actually checked the statute of limitations for both California and Federal felony theft before posting. It looks like almost all theft is a 3 year limitation.
As I read the story, I shook my head in disbelief. How stupid could these people be? Hitting the same machine again and again and again, in sequence?
And once again, talking did them in. If Kane had kept it a secret and just did the Vegas circuit, hitting one casino per day for about $10K, he could still be milking the bug.
Hindsight fools me into believing that I too would've chosen more wisely in a similar situation. But consider how oblivious the director of surveillance was before he watched Kane quickly win multiple jackpots.
Perhaps someone else is exploiting a similar bug slightly less aggressively (but still far more than you or I might consider 'safe'), and won't be caught. That person may not be so stupid after all.
As programmers, we sure have a good position in society. If someone uses our buggy code to steal credit cards, the evil criminals are blamed. If someone uses our buggy code to win infinite money from a casino, the evil users that figured out the bug are blamed. If our autopilot software decides that a pilot is trying to land an A320 when he's trying to climb and the plane crashes into a forest, the pilot goes to prison, not the programmers!
And, we get this complete autonomy and immunity without any education or certification!
With great power comes great responsibility, folks.
I like your point, but you've drawn the wrong conclusion.
Those with power are the ones that make the rules. Programmers aren't the ones with power, it's the casinos or the plane manufacturers with power, so it's their rules as to who the losers are. If, somehow it was in the casino's best interest that the programmer was made the villain then I'm sure a reason would have been found.
Case in point Goldman Sachs screwing over Sergey Aleynikov, a programmer that served time because Goldman didn't want his expertise in a competitors company.
The Goldman issue wasn't about defects in the work product, though. If Goldman sent everyone to jail that wrote buggy code, there would be no programmers left in New York!
> If our autopilot software decides that a pilot is trying to land an A320 when he's trying to climb and the plane crashes into a forest, the pilot goes to prison, not the programmers!
And, we get this complete autonomy and immunity without any education or certification!
True, but flight software itself goes through very rigorous FAA certification processes. I'd rather have that than be told that the programmers who made the software have Ph.D's!
>If our autopilot software decides that a pilot is trying to land an A320 when he's trying to climb and the plane crashes into a forest, the pilot goes to prison, not the programmers!
Prison is probably the least of the pilot's problems!
It struck me how the cooperation of the casino often comes up in these stories. Here, the trick ended up relying on the casino enabling the Double Up option on request. There was a story making the rounds a few months ago on HN about a famous poker player who took a casino for millions of dollars (playing a different game) by relying on a subtle asymmetry in the back sides of their cards, and that scheme required the casino to cooperate by providing a dealer who spoke Mandarin and allowed the cards to be turned around ahead of time.
I wonder why casinos don't just refuse any sort of unusual request related to the game. Sure, it sounds like an innocent request that won't affect the payout. But how sure are you about that? Wouldn't it be safer to just set the rules and never change them on request?
I assume the answer is ultimately that legitimate high-rollers sometimes have crazy requests, and you make more money from accommodating them than you lose from cheaters. But the response from the casinos (getting this guy thrown in jail, suing the poker player I mentioned above) seems to say that they aren't really comfortable with that tradeoff.
"I assume the answer is ultimately that legitimate high-rollers sometimes have crazy requests, and you make more money from accommodating them than you lose from cheaters. But the response from the casinos (getting this guy thrown in jail, suing the poker player I mentioned above) seems to say that they aren't really comfortable with that tradeoff."
They may be making the tradeoff but that does not imply that when the negative consequence happens (cheating) that they are going to let them get away with it. Suppose a store placed products outside in front of the store. There is tradeoff of increased sales of that product, but increased theft rate of that product. If they caught someone stealing they would still make them return the stolen item and possibly prosecute. Just because a negative risk is calculated, that does not mean that a detected negative event is accepted
That's a good point, but taking advantage of a casino after a player asks the casino to help them cheat, and the casino obliges, is a much grayer area of morality than simply stealing stuff.
To make another retail analogy, it's like a guy walking into a store, picking something up, and asking the clerk, "Hey, is it OK if I just take this home now?" And the clerk says "yes" with the assumption that the person intends to pay for the purchase later.
"That's a good point, but taking advantage of a casino after a player asks the casino to help them cheat, and the casino obliges, is a much grayer area of morality than simply stealing stuff."
FWIW, the commenter wasn't referring to the morality of the practice. He mentioned what casinos would do, not whether it was right or wrong.
It's obvious enough what casinos actually do, I'm just commenting on the psychology behind it.
And given that the casinos are willingly taking this tradeoff, and that the losses aren't what I see as immoral actions, it then becomes rather nasty that the casinos are dragging people to court and putting them in jail for it.
In short: you and I generally work within the framework of the law and make tradeoffs accordingly. The casinos appear to be bypassing that and are bending or modifying the law so they don't have to make tradeoffs.
It's nice to see a real life example of the prisoner's dilemma going against the Nash Equilibrium:
>Prosecutors had a weak hand, and they knew it. As a December 3, 2013, trial date approached, the Feds made Kane and Nestor separate but identical offers: The first one to agree to testify against the other would walk away with five years of probation and no jail time.
>The old gambling buddies had one more game to play together. It was the Prisoner's Dilemma. Without speaking, they both arrived at the optimal strategy: They refused the offer. A few months later, the Justice Department dropped the last of the charges, and they were free.
I don't think the Nash Equilibrium applies here. The consequence of defecting has to be better than cooperating, regardless of what the other player does. Here, you have to consider the probability that prosecution would be successful, which did not seem likely.
If you don't defect
-He defects first: You may or may not go to prison
-He doesn't defect: You may or may not go to prison
And if you defect first
-He defects second: You don't go to prison
-He doesn't defect: You don't go to prison
Still seems to me that the Nash Equilibrium is to defect. Not going to prison is better than probably not going to prison. According to the article, they still don't talk to each other, so it's not like the outcome would have changed much.
That was probably the logic the Feds used when designing this game. Actually, kind of surprising that Nestor did not go for it, based on my assessment of his character from this article.
>The concept was proven in 1995, when one of the GCB's own staffers, Ron Harris, went bad. Harris modified his testing unit to covertly reprogram the EPROMs on the machines he was auditing. His new software commanded the machine to trigger a jackpot upon a particular sequence of button presses—like a Konami Code for cash.
This is actually a really interesting story that I saw on one of those "Vegas's Biggest Criminals" type shows. This Ron guy was given the job and created a device that would plug into the slot machine and check for tampering. He programmed it to check the device, mark it as clean, then insert his own code. This code allowed him to instantly win jackpots. He would have to bet a specific combination to open the jackpot. For example he had to bet 1 credit, bet 3 credits, bet 4 credits, bet 1 credit etc. I believe the sequence was like 50 steps long. He would obviously have friends play the machine to win.
Benefits to this system was that his team could spread out among many machines. If the casino wanted to check the machine, they would send Ron in and the machine would come up as clean (he developed the software to check it). The sequence was so long that it would take someone a lot of work to recognize it, and no one was likely going to stumble upon it by accident. It was really genius, however I can't remember how he got caught.
According to Wikipedia, Harris's slot machine hack wasn't discovered. He turned to Keno, finding a flaw in the pseudorandom number generator, and when his accomplice went to cash in a high-value winning ticket in New Jersey, the casino got suspicious, alerted investigators, and everything came out after that.
As much as I hate how casinos deal with people who find loopholes in their games, sitting down and winning "seventh jackpot in an hour and a half" is pretty silly.
Everything in moderation... But I guess you can't really expect that from a gambling addict.
I couldn't help but think that I would've handled this so much better than these two knuckleheads.
You don't need tens of thousands of dollars a day. Just go in to win one jackpot, lose money on some other games to lessen suspicion, and then go home with a few thousand dollars in profit. You could probably keep that up for ages without anyone connecting the dots.
I think the same thing about myself, but do I really know that?
If I have access to a basically unlimited money faucet as long as I don't get caught, can I be sure I won't fall into the same trap of "I can just take a little more" escalation until it becomes blatantly obvious to everyone within 100 miles what I'm doing.
Press a few buttons and win $5-10k is a pretty big temptation.
The article made it clear that most casinos don't enable the double up feature by default. If you tried to play the long game, you'd end up interacting with the same high roller employees week to week to enable the feature, and eventually arousing suspicion.
You underestimate the weird things high rollers demand to order to "increase" their luck. Turning on some feature that is usually turned off is pretty low on the list of suspicious things high rollers would do.
Maybe this is a moral failing on my part, but I am still trying to figure out what was "wrong" about this. They found a bug. They exploited it. They asked other casinos to enable a function that allowed them to exploit it, but it was still a valid configuration for the game.
To me this sounds like IGT should have lost their shirts, but instead the NGC, local police and the IRS can recoup the loss from the individual and emerge unscathed?
I still cant see how this is wrong. But then again I think if you are good enough to count cards in blackjack you should be able to profit as well...
If he found a flaw in the poker simulation, I would agree with you. Cases like that have come up.
But instead he's retroactively changing the size of his bets. He plays the machine so he wins $50 then uses the bug to change the payout to $5000. It's like writing extra 0s on a check someone gave you.
It's an interesting bug, but I don't think he deserves his winnings. He was clearly playing outside the game and cheating.
That said he did NOT deserve to be SWATed. That's a massive overreaction.
Well, if you found a bug that allowed you to log into someone else's bank account and remit all their money to your own account, would exploiting it be right?
The OP's argument is that exploiting a bug for financial gain is not wrong which is not so different from saying exploiting a faulty lock to steal is the locksmith's fault.
joezydeco's comments elsewhere in this thread are dead-on, but the short version is that there are specific gambling laws and regulations which prohibit this sort of thing. Something along the lines of "It is hereby illegal to find a bug in a gambling machine and exploit it." but with more legalese.
I worked on online casino software for several years and we had a number of bugs like this. They would usually involve someone writing a client to hit our API directly and fiddling with the xml messages. The operators would usually catch the issues within hours, turn off the game and often deny the players their winnings, if it was a legitimate win. Several people wound up in jail for exploits.
In the early days of the company it was a fairly significant problem with incidents pretty frequently. The lack of QA and a release process really bit them a few times as well. A game was put into production with the result hard coded to a win. Goes to show that just because a company makes software that deals with money and is financially successful it does not mean they are at all competent. It took 9 years for them to turn things around and transform the company into a highly effective dev shop, at least by industry standards. I am proud I was part of that. Unfortunately the industry had some major problems in 2009-2010 and they ended up having to find a buyer who even more unfortunately does not appreciate or understand developers or software development.
We did integrations with many other gambling software companies and not a single organization was what I consider competent. I would love to see a new company with serious technical chops break into the world of online gambling and school the crusty behemoths. Hard to do however because of the network effects and importance of reputation and deal making.
The article is missing the most interesting part, for me at least: how the bug worked. Not from the outside (the article has the sequence of steps to exploit the bug), but from the inside. What change in the control flow the "Double Up" feature did which caused it to remember the previous payout and multiply it by the new denomination?
From what I could gather from the article, the bug happened even if the user never used the Double Up feature. But the bug disappeared if that feature was disabled.
My guess would be that, for the Double Up feature to work, the program saved some state (or delayed clearing that state), so it could double the payout (I'm guessing that the "Double Up" feature is something used after a win, something like "flip a coin to choose between 2x or 0x payout"). Some other part of the program expected that state to be cleared. Without the Double Up feature enabled, the code skipped saving that state (or cleared the state earlier), which is why disabling that feature prevented the bug.
That is, something like the classic "MissingNo." bug in Pokémon, where there was a strip of terrain which didn't setup the random encounter table, and the space for that table was also used as temporary space to copy the player's data during an event in the game. Trigger that event, go to that strip of terrain, walk until you get a random encounter, and what was on the player data is used as the encounter data.
It will be interesting to see what happens to casinos in the coming years.
Most people under 40 don't play slot machines, which account for a large portion of casino's revenue. Free-to-play games such as Candy Crush are far more interesting to younger players.
Vegas casinos will be fine, because gaming isn't the leading source of revenue for them. However, regional casinos depend on slots for revenues. As gambling become legal in more and more states those regional casinos will also have more competition.
Wheel of Fortune slots are insanely popular with college-aged women. Or at least were 5 years ago.
The barrier to entry for slots is significantly lower than games like craps or poker. That is also why you see so many novice gamblers playing roulette. You can figure it out right away.
These guys did this all wrong. They could have kept this going indefinitely if they found a team of people who all agreed to go in and play these machines at random times, at random casinos and never together. Better yet, rotate the people so they never go to the same casino within 6 months of their last visit so they don't get flagged for winning a jackpot every month.
Just send someone in, play for a bit and then win a jackpot and leave. $1.8k to $10k jackpots so ~$6k/casino per session per person.
You could easily get everyone to an annual $50-100k/year salary with very little play and be under the radar forever.
You would have to use people you trust since it's naturally a greedy endeavor.
I'm sure there are holes in my system, but those would be filled with a group of 10 people analyzing and iterating on it every week quite easily.
The larger a conspiracy, the more doomed to failure. There is no way a couple of schlubs like these two could recruit eight other people to follow their directions precisely and not get greedy. The first guy couldn't even recruit one person he could convince to do that!
Perhaps a charismatic religious leader could inspire enough loyalty among brainwashed acolytes for such a scheme, but that's about it. Normal people are greedy.
That bug probably wouldn't have existed if the code had been written in a functional language where state management was an inherent part of the whole deal.
Then again, some of these video poker systems look like a glorified Sega Genesis, and probably run under similar hardware, too.
I wonder if they would have. If he had contacted the company (via a lawyer) and said "I can show you a bug where X happens for a nominal fee" I wonder if they would happily given him some fair sized sum of money.
But he seems to have been a gambling addict, so used it himself.
Nearly all arrests are for "suspicion" of some crime -- until you have plead guilty in court[1] it's always suspicion. And anyone has a right to make a citizen's arrest, while many security guards have limited police powers just within the private property they guard. With any of these, they can only hold you long enough to hand you over to police.
[1] Or, I suppose, found guilty by a judge. But that only happens with a miniscule portion of our legal cases in the US courts -- it is ignorable as an obscure special case.
> Nestor says he started toward the stairs, his hands over his head, when he came face-to-face with a trooper in full riot gear. “Get on the floor!” yelled the trooper, leveling his AR-15 at Nestor's face. Nestor complied. The cop ratcheted the handcuffs on Nestor's wrists, yanked him to his feet, and marched him into the kitchen.
That seems perfectly reasonable for a non-violent crime.