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.
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?