Nation´s New Slot Machine Casinos Will Have To Deal With Slot Machine Cheating and Slot Cheats Smarter Than Their Own Technicians And Security Staffs!
With new slot machine-only casinos popping up at racetracks all over the country and in states like Pennsylvania, cheat-wise employees are going into business for themselves. I have gathered information from both inside sources and newspapers that details some inventive new slot cheating scams put down by casino employees.
High-tech thieves have discovered a new way to rip off slot machines - stealing more than $1 million from the Orleans before management shut down their computer-assisted heist. Gaming regulators say the crime - one of the largest in years - shows a vulnerability in casino security that could lead to new surveillance standards. The theft began in September 2006 and allegedly involved three slot workers who, over several months, manipulated software that prints slot machine payout tickets. They allegedly worked with two accomplices who posed as customers and cashed the tickets.
One defendant, slot technician Seferino Romero, pleaded guilty last month and will be
sentenced in Clark County District Court on Jan. 24. Felony theft carries a maximum 10-year prison term. His attorney, Jeffrey Segal, said his client didn’t mastermind the heist and has agreed to pay restitution of $100,000. "I think that his actions subsequent to the conduct indicate that this is a person of good character who got caught up in something and realizes it was a mistake," Segal said.
The Orleans incident shows that other casinos are similarly vulnerable to inside jobs by casino workers, security experts say. Employee theft - sometimes as simple as pocketing cash or chips - is a recurring problem in the cash-rich industry, which can corrupt the most trusted employees. Most crimes are not publicized by casinos and regulators are reluctant to discuss them for fear of tipping thieves to new techniques. Boyd Gaming Corp., which owns the Orleans, declined to discuss the particulars of this case, which is still in progress. "It could compromise the investigation" and assist other cheats, spokesman Rob Stillwell said.
Four other defendants are awaiting arraignment next year on felony theft charges. The
Gaming Control Board’s enforcement chief says the Orleans incident was a new one to him, although it had a familiar ring to security experts.
In this case, Orleans workers printed winning tickets on test machines in a back room, using software allowing the machines to mimic machines on the slot floor that had been turned off, investigators told the Sun. The tickets were for relatively small amounts - a few hundred dollars each - to escape the notice of casino bosses. Stealing from cashless machines is a new challenge for thieves. Casinos have turned from coin slot machines to ticket machines because they are easily played and maintained and had been considered more secure than old-generation coin slots,
which skilled thieves could quickly compromise using mechanical tools such as magnets and metal wands. These newer thefts typically involve casino employees with access to sensitive areas of a casino’s nerve center. And therein lies the problem - and the solution - for casinos. The slot technicians involved in the Orleans theft had appropriate access to the slot testing room but probably shouldn’t have been allowed to tinker with the slot system that communicates with the machines on the floor without some interaction with other departments or higher-ups, said Jerry Markling, chief of the Gaming Control Board’s enforcement division. The good news for casinos is that "these are no longer easy scams" and can mostly be defeated with "strong internal controls," Markling said. Michael Crump, a Fresno-based slot
security consultant, said the Orleans case is typical of an emerging scam that is foiling casinos nationwide. Many casinos rely on manufacturers to create security clearances for casino employees to access their slot tracking software, said Crump, a former executive with Boyd Gaming in Las Vegas. But those casinos may lose track of what clearances those employees have, allowing them to exploit the system later on, he said. Typically, employees who steal have stumbled upon access they shouldn’t have, he said. What’s especially troubling for casinos is that some employees can cover their tracks by erasing transactions or signals that could red-flag auditors, he said. The theft came to light during last month’s Gaming Control Board meeting, when regulators discussed and approved a request by the South Point to put slot machines in a relatively remote part of its casino. Regulators worried about surveillance and the casino offered to post either a security guard or a slot technician at the machines. At the meeting, board member Randy Sayre said ticket machines may not be as secure as industry executives would like to believe. "It’s not just a matter of, we have got the room, we have the people to watch it, let’s put (slots) out there," he said. "Technology is moving forward on us and the bad guys are getting smarter." Regulators are loath to discuss details of how slot machines can be exploited, but indicated that, in a general sense, surveillance of the slots is important. Regulators generally require surveillance cameras on remote machines, though regulations specify dedicated cameras only for big jackpot machines. Some casinos don’t train cameras on machines that have been shut down. Cameras may not stop an actual theft but they can be used to watch employees who might be breaking some procedure by, say, not being on the floor when they should, Crump said. Still, security clearances, rather than surveillance, are the real culprit in this case, he said. Sayre says his concern isn’t with the distance of any particular slot machine from the main casino floor but the possibility that with the spread of slot machines into remote areas, a casino’s security staff could be spread too thin. He says a standard policy for surveillance of remote machines would help casinos and regulators combat crooks. Sayre wonders whether manning the machines with a gaming employee would be preferable to a guard, who is trained to spot underage gamblers but perhaps not as familiar with the technical aspects of the games and how they can be compromised by cheats. Casinos lose an estimated 6 percent of revenue to internal theft, which is chalked up as a cost of doing business, Crump said. Many thieves prefer to ply their trade at smaller casinos outside of Nevada with cruder security mechanisms, he said. But Las Vegas eventually attracts the
most accomplished and polished criminals, who try their hand here "to prove they can get away with it." The Orleans scam was hardly the perfect crime, Markling said. "It was only a matter of time" before the thieves were caught because the casino’s high-tech slot monitoring systems can detect deviations from the expected payout of any particular slot machine, he said.
Scam #2
Arizona ~ East Valley Tribune
Two employees of the Vee Quiva Casino in Laveen have been indicted for allegedly stealing $9,400 in non-existent slot machine jackpots. Jason C. Beal, 31, and Fernando Lechuga, 25, both of Phoenix, will be tried in January for theft by an officer or employee of a gaming establishment on Indian lands. If found guilty, they each face up to 20 years in prison and a fine of $1 million. According to federal prosecutors, Lechuga, a slot attendant, and Beal, a slot assistant supervisor, wrote and signed jackpot slips for $4,900 and $4,500. A review of surveillance tapes confirmed the jackpots never occurred.
Scam #3
Florida . Sun Sentinel
The Florida Department of Law Enforcement is investigating an alleged slot-machine theft ring by employees at Gulfstream Park Racing & Casino. This is the first potential scandal for the fledgling industry, which is both heavily regulated and heavily taxed by the state. And I’m the one bringing you the news for one reason: The largest newspaper in Broward County, the Sun-Sentinel, had the story first but got cold feet and decided not to publish it. Before we examine the Sun-Sentinel’s apparent cowardice, let’s look at the emerging scandal at Gulfstream, one of the county’s four pari-mutuels and the first to unveil voterapproved, Las Vegas-style slot machines last year. FDLE spokeswoman Paige Patterson-Hughes confirmed that her agency, which has a regulatory office on Gulfstream grounds in Hallandale Beach, is criminally investigating the casino, although she declined to provide any details. The investigation is centered on promotional cards used to generate interest in the
slot machines, according to sources in the gambling industry and in Tallahassee.
Local casinos provide patrons with the cards, which usually hold $25 to $100 worth of "nonredeemable credits" to play the slots. Patrons can cash in any winnings beyond the card’s originally assigned value. Gulfstream employees are alleged to have exploited the promotion either by playing with large amounts of money on the cards or by their unauthorized selling. Cards used to test the machines also may have been involved in the scam, sources say. Sources also indicate that a Gulfstream executive has been removed from his post while this investigation continues. Gulfstream spokesman Mike Mullaney was almost laughably coy about this. When I asked whether the executive in question had been fired, Mullaney said, "I haven’t seen him around in a while." Mullaney downplayed the investigation. But Gulfstream’s filings to the state reveal that hundreds of thousands of dollars may have been involved in the alleged scam. Gulfstream reported that it gave out a whopping $1,051,000 in nonredeemable credits during July and August. In that same period, Mardi Gras Gaming, a larger casino that does about twice the slots business of Gulfstream, reported using only $108,000 of the credits. Since the investigation began, Gulfstream’s numbers have come back in line, according to state filings. In October, the casino reported using just $107,986 in nonredeemable credits, a huge decline from previous months. Mullaney claimed he wasn’t aware of those numbers. "I’ll have to defer to our accounting department about that," he said. "If there is an investigation, any comment I make could jeopardize it." Mullaney did offer that he had heard people were speculating that millions of dollars were involved in a Gulfstream theft. "I can’t imagine it’s millions of dollars," said. "That boggles the mind." Mardi Gras President Dan Adkins said the Gulfstream investigation could
have far-ranging effects on the industry, which is already hampered by an effective 62-percent tax rate. "To have something like this, which is a scar, a black mark, on all the hard work we’ve done . it hurts me," he said. Mardi Gras would have caught the anomalous numbers immediately, Adkins said, due to its "controls and sophisticated accounting system." State Sen. Steve Geller, who confirmed that the FDLE investigation involves allegedly misused nonredeemable credits, said pari-mutuels are so strictly regulated that any scams are bound to be discovered sooner or later. "It’s impossible to get away with, but the higher up the ladder it goes in terms of management, the longer it takes to get caught," he said. Mullaney said Gulfstream has fully cooperated with the investigation. "As a gaming enterprise, integrity and dignity and credibility are of utmost importance to us," he said. "It’s
in our best interest to play ball with FDLE, which is stationed here anyway." Meanwhile, Mullaney said the first call from the media about the investigation did not come from me but from Sun-Sentinel reporter John Holland. Mullaney said Holland asked him questions and told him the daily newspaper was going to publish an article about the investigation nearly two weeks ago. "But the days came and went without a story," Mullaney told me. "I wasted two dollars and five cents on the Sentinel looking for that story." Holland declined to comment. Sources at the Sun-Sentinel say his article about the investigation was edited and vetted by a lawyer, then killed at the last minute. Earl Maucker, the paper’s executive editor, at one point told Holland to speak with a Gulfstream executive who wanted the story spiked, a veteran Sun-Sentinel reporter said. Gulfstream regularly runs large ads in the Sun-Sentinel. Maucker did not return my calls for comment. Others at the Sun-Sentinel say they heard the story was not published because editors were concerned that it used unnamed sources and because editors were worried that such news could harm the gambling industry. Some in the newsroom were angered by the decision. "A
lot of people are upset about it," one reporter told me. The Sun-Sentinel’s circulation has plummeted lately. At the same time, the paper is undergoing what its management calls "transformative change." To some degree, this entails blending reporting with advertising and marketing. The idea is to better serve advertising
clients as well as readers, even as readers fall away. Traditionally, reporting has been kept strictly separate from the interests of advertisers. The fate of the Gulfstream story in the Sun-Sentinel’s newsroom could be a sign that the paper is not just bridging departments but that its hunt for revenues in an increasingly grim industry has overtaken its journalism, which would be far worse than whatever happened on the slots floor of a local casino.
Scam #4
Intelligence received: A casino reports the detection of an employee working in collusion with outside agents to steal downloadable credits from slot machines. The employee worked in the rewards center and loaded up unearned and undeserved credits onto cards for friends/family. A significant amount of money was stolen. Some of the tells seen when these cards were used: - Suspects had multiple cards in possession and used all - Print out of TITO or cash out credits after every win - No further
play when e-play was used up - Account in false name or identities (player did not match description)
- Kiosks were used to cash in for relatively small amounts $50, $100 etc.
- Employee used another clerk.s computer log-in and password. Noted in paperwork: -
Blocks of numbered card stock were taken in quantity by employee.
- PIN numbers changed frequently on accounts (every few minutes)
It is recommended PIN changes, redemption lists and card issuance reports be checked on a routine basis.
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