Episode #52: Vegas Cheats

For as long as there have been casinos, there have been swindlers. But, cheating isn’t always obvious. It can be hard to catch, as it’s not always blatant. First, here are a couple notable Vegas cheaters:

Recent Vegas cheaters:

One you may have heard about is Dennis Nikrasch. He and his team were originally arrested in 1981 for rigging slot machines between 76 and 79, winning sums to the tune of $40M a year. After being released in 1991, Nikrasch, as is the case for chronic scam artists, couldn’t control himself, and was soon back at it. Nikrasch was able to get a slot machine computer chip, you know, the ones that regulate payouts, from a manufacturer. He figured out, on his own machine at home, how to trigger payoffs at will. Because he was able to do this at home so efficiently, he knew he could accomplish a similar feat at casinos if he opened up a slot machine. He was able to buy a key on the black market. Using a blocker, someone getting in the way of a security camera, he would be able to open a slot machine and alter the chip. Nikrasch wasn’t usually around for the payoff. Someone on the team would swoop in, play the slot, and split the fruits.

Between 96 and 97, his crew hit six Las Vegas casinos. He was caught thanks to one of his accomplices revealing information. He was sent to prison again in 98, to be released in 2004. Nikrasch died in 2010, but is probably the most successful casino cheat in recent memory.

Another recent cheat came from, I guess we’ll call him a gambler, Richard Marcus. Marcus isn’t exactly shy about his exploits as he wrote a book about it, called the efficiently named, American Roulette: How I Turned the Odds Upside Down- My Wild Twenty-Five-Year Ride Ripping off the World’s Casinos.

So, what he do? One of the oldest tricks out there: pastposting. Essentially, altering or posting a bet after the outcome is determined. He came up with a tactic called the “Savannah”, in which he would bet two chips in roulette of different denominations, the smaller denomination chip would be on top and angled, making it hard to see the bottom chip. Marcus’ acting skills were important to his success. If the bet lost, he’d drunkenly remove the bet from the table, acting ignorant to the rules. The dealer, of course, would demand Marcus to put the bet back, which he does. Except, now, when Marcus returns the bet, it’s actually two of the smaller denomination chips, not the original, larger bet on the table previously. Of course, if he won, he’d leave the original bet and collect. Now, I’m not very much in tune with the history of roulette, but I imagine this is hard to pull off at standard tables, which you have to buy in and exchange your regular casino chips for standard denomination chips only used at the roulette table. Marcus claims he’s pulled off similar scams at other games, including blackjack, with quite a bit of success.

One final example comes from the Asian version of Ocean’s 11- The Tran Organization. The Trans succeeded at a very simple scam, in which they convinced Pai Gow, baccarat, and blackjack dealers to commit what is called a “false shuffle”.  A false shuffle creates a “slug”, which is a group of cards with an order that does not change, even as the rest of the deck is shuffled. The slug can be transferred through several shuffles. The team would use trackers who would relay the order of the slug to a remote person who entered the pattern of the cards into a computer. The computer operator would pick up the pattern of the cards, then, when the slug initiates, would relay the information to a spotter, who would signal to the players at the table when to bet. The team, during one successful session at blackjack, was able to make $900,000. This may not seem like much, but for reference, it is the annual casino revenue of the Downtown Grand.

An undercover sting, in which an operative posed as a crooked dealer, eventually took down the Trans in 2007, but not before they hit up 29 casinos for around $7,000,000. They are featured in an episode of CNBC’s American Greed. A dealer was asked in that episode, why he helped them. His response was interesting, I’m paraphrasing here, but he essentially said that he had lost a lot of money gambling at some of the casinos, which he thought was unfair. He felt like he was righting a wrong.

Does Vegas cheat us?

What? That’s like buying something at Target. Regretting that you bought it, and then going in and robbing Target. I guess this speaks to the negative perception people have of gambling and casinos. This guy, who was employed by said casino, didn’t like the business model. Not only that, he blamed the loss of his money on them directly. We have choices. Gambling is not as inherently evil as people may think. Very few things are inherently good or bad, it’s how they are used or disseminated. The transaction cost when gambling is actually very clear. You have a minimum you have to spend and each game has a specific cost. It’s not always posted, but us knowledgeable visitors know what it is- the house edge subtracted from 1, multiplied by your bankroll for that session. That’s the expected cost, long term, of playing the game. Of course, it doesn’t always play out like that thanks to randomization and volatility, but it’s still clear. Because of this clarity, the casinos aren’t cheating. Not only that, they are heavily regulated. So, anyone who thinks the games in Vegas are rigged, are just talking out of their…rear end place.

It’s not very exciting to take a sole $5 chip, placing it on the felt, and only playing until that runs out, but you can do it. Further, no one is forcing you to play any more than that. Perhaps our Tran dealer friend was actually forced to spend more than he was comfortable. Maybe the pit boss reached into his pockets and vigorously grabbed his wad…of money, and laid it on the table. I’m fairly certain that’s not what happened. Also, it’s not polite to ask dealers or pit bosses to retrieve your money out of your pants for you. Some of us learn this the hard way. I had two drinks in my hand; I don’t want to talk about it.

Despite all the information out there people still feel like they are cheated. And it’s not just playing the games, but with other amenities as well. One term that gets thrown around a lot is “price gouging”. The sudden and often temporary rise in prices that are, essentially, exploitative. Several states have laws prohibiting these price spikes during times before, during, and after civil emergencies. However you want to apply the term, whether it’s to describe price spikes during emergencies or shocking swollen charges when two grown men decide to fight each other in the middle of the desert, what we have to think about is whether it’s cheating, or unfair. Depending on your social leaning, you may think the former is fairly unethical, I’d probably be inclined to agree. For me, though, it’s hard to get upset when a business sees a sudden rise in demand during a non-emergency situation, and reacts by raising prices.

This is exactly what happened when I went out to Las Vegas during the Mayweather/Pacquiao fight. The fight was announced, and prices went crazy. Rooms at lower tiered properties like Excalibur and Circus Circus were up to $500 a night. The term “price gouging” kept getting thrown around. But, lest we forget, there’s always a choice. No one had to go during that crazy weekend. It was the most expensive I’d ever seen Vegas get. We had already booked our rooms prior to the announcement, so our rates were still pretty cheap. Our flights, on the other hand, were not booked. My normal $300 or so round trip fare from Detroit was now up to about $700. So you see, it’s not only Vegas that reacts this way. Even Southwest and other airlines responded to the sudden, non-life threatening demand. We ended up flying into LA on the cheap, renting a car and driving to Vegas. We still had a pretty cheap weekend and didn’t feel cheated. We may not like it when Vegas raises prices or charges an increased rate during busy times, but they’re not cheating us. Does it suck? Yeah. I don’t necessarily like paying more for a drink in the evening than I did during the day at the same bar. Then again, I also don’t seem to care or focus on it too much when I get charged different prices during different times of day at the movie theater by my house. Maybe we get all riled up simply because we like Vegas so much and we see it changing. And it is, it’s changing quite a bit. But cheating us? I don’t think so.

Cheating 0urselves:

Sometimes, though, we actually cheat ourselves. We can do this in a variety of ways. Sometimes we get too emotional when gambling and it costs us additional money we weren’t ready to spend. I get around this by only carrying the cash in my pocket I plan to gamble with for that particular day, plus a bit extra for tips. That’s the only cash I usually take out to Vegas. Eating, drinking, and all other activities I either charge to the room or my credit card. This prevents me from going into my cash budget more than I set out to. The rest of the cash I keep in the room safe. It takes a lot of energy to leave the table, head back to the host hotel, walk up to the room, and pull out extra cash. It leaves an opportunity to think about the decision and, hopefully, be distracted by something else perhaps a little less costly. However, if I’m at a table and run out of money, it takes considerably less effort to reach into my pocket and grab extra cash. I like to think I have a lot of self-control, which I actually think I do, but I also like to add a couple safety measures in as well.

Another way we tend to cheat ourselves is by pursuing less costly services. That sounds odd because we’re saving money. However, at times, this comes at the expense of another resource. In his book, The Outsiders Guide to Las Vegas, FHBM host Tim Dressen aptly stresses this, saying, “I value my limited time as much as my limited dollars, so I choose not to spend that time on experiences comparable or only marginally better than those I would have without using up additional minutes or hours”. It’s a great point and it speaks to a variety of Vegas activities.

I was asked recently about the use of public transportation in Vegas. I’ve used them. They’re not entirely bad. You have to balance this. You can save a few bucks, but your time and effort will increase quite a bit. With low-cost ride sharing in Vegas, it makes public transportation a lot less appealing. If you’re not a user of Lyft, you can typically get a deal where you receive $5 off each of your first 10 rides. It may be a good idea to save that for Vegas. It could potentially split each of your fairs in half. Plus, you don’t have to sit next to weird people on the bus. They’re full of poor podcasters.

Keep this idea in mind, though, when you venture out to gamble as well. Yeah, video poker isn’t great on the Strip. But if you only plan on putting a few bucks into the machine, does it makes sense to travel downtown or to another property. The money it takes to get there may be more than what you’d save in gameplay. It’s not always the case based on your particular bankroll, but consider it. Try to determine a concrete value for your time. It might seem odd, but it actually helps decision making become much arbitrary.

The information for today’s episode is from the Las Vegas Sun, FBI.gov, CNBC, and Cracked.com

For the “Make Vegas Great Again” hat discussed in the show: Zazzle