Lentis/Gambling

< Lentis
The Bellagio Hotel and Casino in Las Vegas

Gambling institutions such as casinos are places where technology and social issues interact on a daily basis. Since their inception, gambling institutions and their patrons have walked a fine line dividing socially acceptable and unacceptable behavior. These arguments often revolve around certain technologies or techniques relating to gambling. This article will look at three case examples that illustrate the gray areas surrounding gambling and provide the views of the parties involved. By examining these issues we can better understand where many groups draw the line on what is acceptable behavior. To limit the scope of the article, we only consider these examples in the context of U.S. gambling.

Contents

Slot MachinesEdit

 
A Woman Playing Slots in Las Vegas

When slot machines were first invented in the late 19th century, they were simple, mechanical devices. New technologies cause slot machines to be characterized as advanced rather than simple machines. Such technological innovation causes interest groups to argue slot machines are becoming more predatory while others counter that patents of new technologies are simply making slot machines more entertaining[1][2]. According to the Nevada Gaming Control Board slot machines are a majority source of casino income[3]. Thus, slot machines are the first case example for exploring gambling behavior.

Electromechanical Slot MachinesEdit

The first electromechanical slot machine called Money Honey was developed in the 1960s. The new technology let the machines flash lights and play sounds when a player hit a jackpot. Opponents claim that accompanying a jackpot with bells and lights causes "the odds [to] become obscured in our minds, and we suddenly think that [it] is a legitimate game we can win after all" [4]. Manufactures counter by claiming that the bells and lights only increase entertainment value. Player ignorance is disparaged with public slot machine mandates for minimum returns, too.

Random Number GeneratorsEdit

In 1984, the first patent for a slot machine with an electronic random number generator (RNG) was filed [5]. RNGs constantly run in the background generating three digit numbers. Once credits are played the RNG combines three numbers then divides the string by 64. The remainder of the calculation corresponds to a spot on a virtual reel that corresponds to a second reel with information for the step motor. The total formula demonstrates computer control over slot machine icons. The new technology allows manufacturers to "make a machine that is perceived to present greater chances of payoff than it actually has within the legal limitations that games of chance must operate" [6]. Casinos can increase the frequency of certain numbers for specific icon sequences. One way of presenting better odds than the machine actually pays out is to have a high "near miss" rate. Near misses are occurrences of two jackpot symbols on the pay line and a third jackpot symbol above or below that line or a winning combination occurring just above or below the pay line. Near-misses cause recreational gamblers to respond as if they are closer to winning when the odds are unchanged.

Opponents characterize a high near miss rate as another way slots are "designed to psychologically prey upon the user" [7]. In 1988, the Nevada Gaming Commission heard arguments regarding the legality of slot machines produced by Universal. In these machines, "after the determination of win or loss has been randomly made, losing combinations of symbols are weighted and then selected so that certain losing combinations appear more frequently on the pay line than other losing combinations". The method artificially increases the odds of a near miss occurring. The commission banned this functionality, claiming that it did not provide an "accurate representation of the game outcome" [8]. Harrigan identified three slot machines in 2007 that could have award symbol ratios adjusted and legally produce a near miss 4.1 times as often as a jackpot [9]. Although there are rules for weighting slot machine outcomes, there is no ruling that addresses high rates of near misses that occur above and below the pay line.

Pop Culture InfluenceEdit

Pop culture was not originally associated with slot machines. Games originally used mundane symbols such as numbers and fruit. The digital gambling industry now draws inspiration from pop culture to create new addictive games. Manufacturers obtain copyright to celebrity voices and songs that act as familiarization factors for users. Familiarization factors draw users emotionally closer to games through personal connections[10]. Pop culture is characterized as predatory because it draws on the emotions of players that mundane symbols lack.

Casinos claim there is nothing predatory about slots because they are audited regularly, have minimum payouts, and are based on a single random event. The law seems to agree, yet the debate over slot's control of users remains.

Counting CardsEdit

Casino patrons use multiple techniques to gain an edge. Some are considered legitimate, some are illegal, and others make up a gray area. One popular technique is card counting, where a player keeps track of the cards played to better understand the odds (primarily in blackjack). Card counting was made popular in the media by the 2008 movie 21, which follows the MIT Blackjack Team's endeavors in Las Vegas counting cards to win tuition money. The film is based on the book Bringing Down the House by Ben Mezrich[11].

Using DevicesEdit

Counting cards has long been considered a masterful skill for only certain people, but advances in computing technology have made the technique widely available. In 1969, Keith Taft created a concealed device that allowed him to count cards while in his shoes; his big toes adjusting the count up and down [12].

Prior to 1985, there was no restriction on counting cards in Nevada. As a result, no one caught using the device could be prosecuted. Nevada Senate Bill 467 was signed into law in 1985, becoming NRS 465.075[13]. The law prohibits the use of any device in a casino to aid in projecting the outcome of a game or keeping track of the cards played.

While still illegal, devices continue to be developed to remove the challenges of trying to remember a count mentally. Small electronic devices, like BlackJack Buster[14][15], are designed to look innocuous and be relatively discrete. In 2009, an iPhone application was released that turned the phone into a card counting device [16]. Shortly thereafter, the app was banned in Nevada[17].

Casino ResponseEdit

NRS 465.075 forbids devices but does not mention legality of using personal memory. Casinos frown heavily on the practice because it reduces the edge that the house has over the player and shifts advantage to the player. Casinos try to discourage the practice by using multiple decks, not dealing the entire shoe, shuffling often, requiring flat betting, or banning individuals (which they can do because they are private establishments)[18].

To combat card counting, some casinos began to adopt a system called MindPlay starting in 2003. MindPlay is an entire system composed of a table, cards with invisible markings, chips, and scanners. The system keeps track of the count of the deck to determine if there is a correlation with how players are betting. Additionally, the system was used by certain establishments to shuffle the cards before the end of the shoe when the count was in favor of the player, ensuring that the casino always had the advantage[19].

 
Cameras are a huge part of casino security, including identifying possible counters

The MindPlay system drew criticism from players who claimed the casinos were in violation of NRS 465.075 for using a device to keep track of the count. Claims against such casinos are summarized in John Allen vs. State of Nevada[20]. The complaints were that “The MindPlay device also allows casinos to project the outcomes of games, analyze the probability of certain events relative to the game, and analyze strategy for betting in a game.” Other players call the system a “rip-off” and encourage others to “Tell [the casinos] that you; your family, and your friends won’t be back until MindPlay is gone”[21]. As a result, the system was discontinued in 2007.

In general, card counters have strong opinions about the casinos and their tactics. Legendary casino cheat Richard Marcus was asked if he felt guilty for cheating casinos and he replied, “Guilty? You kidding! F--- them! I only regret I didn't make more money. I consider casinos bigger thieves than myself…”[22] Marcus goes so far as to operate a web site to tell people the tricks of how to cheat the casinos[23], purely for "informational" purposes.

Online GamblingEdit

 
The new face of gambling

The introduction of internet gambling technologies has radically changed gambling in the United States. Gambling institutions can reach new customers and avoid costs of physical casinos by taking their business online. For example, casinos must pay for the space to add a new poker table, while online outlets can add virtual poker tables at negligible costs. Colorado and Nevada are the only U.S. states that allow commercial gambling but thirty five others allow it in select cities[24]. This causes the online market to include customers that often neither can nor want to go to physical casinos. The online gambling industry generated roughly $46 billion in revenue in 2016[25] and records Americans betting over $100 billion annually[26]. Such factors draw attention to online gambling and its influence on society.

Morality and Problem GamblingEdit

One important concern of online gambling is its problem with age verification. It is illegal for minors in the United States--under 18 in some states and 21 in others--to gamble, and internet user age verification is more complex than verification in a casino. Groups such as the Nevada Council on Problem Gambling and myaddiction.com stress the importance of restricting underage exposure to gambling because of correlations with problem gambling (also known as gambling addiction). These groups are concerned that access to online gambling poses a problem for users ages 14-21, of whom roughly two percent struggle with problem gambling, and an additional six percent are at-risk[27].

Online gambling advocates argue that measures are being taken to restrict access to minors. For example, the Safe and Secure Internet Gambling Initiative asserts that "the Internet offers unique opportunities for protections against underage gambling that aren’t available in traditional gambling environments"[28]. Such methods include cross-referencing social media information, addresses, and credit ratings, or requiring ID documentation, but are made more complicated by the fact that minors often do not have these histories[29]. Verification technology is a worthwhile investment for online gambling outlets operating in highly regulated and audited environments, such as the United Kingdom, where licensing and reputation are important[30]. In environments with less organized enforcement, the incentive to finance such expensive systems is less clear.

Another social concern of online gambling is the perception that online casinos prey on problem gamblers more than physical casinos. The National Council on Problem Gambling and other problem gambling support groups stress that online gambling exploits the weaknesses of the problem gambler. Online gambling provides the problem gambler with instant gratification, anonymity, and can help him or her hide the problem from friends and family. Online gambling advocates counter that the internet offers new opportunities to help gamblers be responsible and limit their play[31]. For example, regulation proposed by the Safe and Secure Gambling initiative included measures to allow players to place limits on their own betting, and casinos to track and limit wagers and losses over short times, as well as track problem gambling behavior[32].

LegalityEdit

In the United States, online gambling remains loosely regulated by federal law. In 2002 the United States Court of Appeals for the Fifth Circuit ruled that the Wire Act of 1961 prohibits the placing of online sport-related bets or wagers[33]. This decision, still the most important in case law regarding online gambling, affirmed that online gambling on a game of chance does not violate United States law[34]. While this decision was later used to support that all online gambling was illegal, the Department of Justice reaffirmed in 2011 that it applied only to sports betting and left no mention for fantasy sports[35]. In 2006 the Unlawful Internet Gambling Enforcement Act hindered US online gambling by prohibiting banks from transacting with internet gambling businesses[36]. In response, several major services ended US operations[37], and those wishing to gamble online were forced to turn to outlets operating outside the U.S. Further federal laws concerning internet gambling have been proposed[38][39], but none have passed. As of 2016 there are no U.S. laws which explicitly prohibit U.S. citizens from gambling online or which allow the U.S. government to regulate online gambling.

Online Sports Betting and Fantasy SportsEdit

Technology has recently changed what is possible and accessible in sports betting. Placing sports bets in person in the U.S. is illegal in all but four states, most notably Nevada[40]. The internet allows legal access to sports betting services and chance game gambling for Americans. Foreign-based internet sportsbooks, such as Bovada, are trafficked by millions of U.S. users each month[41]. Sports betting remains controversial as critics argue it lessens the integrity of sports and creates opportunities for abuse such as point shaving, spot-fixing, and match fixing among others.

The internet fosters the rise of fantasy sports with instant access to sports statistics and competitors. Betting on fantasy sports is currently exempt from laws barring sports betting[42], which has allowed the rapid growth of a multi-billion dollar industry. IBISWorld credits rising internet access, mobile connections, and sports interest for fantasy sports success, as the industry reported over four billion dollars in 2015 revenue[43]. Daily fantasy games offer fast chances at huge prizes and account for significant recent growth. The legality of such fantasy games—offered most notably by Draft Kings and Fan Duel, and played by more than 3 million people in 2014—has been challenged[44]. Critics, including the state of Nevada, argue that daily games are more similar to illegal sports bets than traditional fantasy games[45].

Future ResearchEdit

Further research is encouraged for the three case studies to explore how groups have used technology to shift the balance of power between player and institution. Card counting is only one way that gamblers attempt to gain an advantage. Further insight may be drawn from studying the vocabulary of “beating the house” versus “cheating” used to describe player efforts to gain the upper hand. More complex practices exists for gambling aid that are not discussed at length, including card mucking and past-posting among other creative methods. Research may investigate how these practices are executed and how they change with new technological advances. Social viewpoints of industry may be strengthened with research of casino responses to customer technology use, as well. Lastly, research enthusiasts are encouraged to explore other country perspectives on U.S. gambling.

Useful LinksEdit

ReferencesEdit

  1. Stop Predatory Gambling (2016). About the Movement, In Mission Statement. http://stoppredatorygambling.org/about-us/the-movement/
  2. Universal entertainment corporation; patent issued for gaming system having a plurality of gaming machines linked by network and control method. (2012). Journal of Engineering, , 3093. Retrieved from ProQuest Database
  3. Nevada Gaming Control Board (2016). Gaming Revenue Information, In October 2016 12 month summary report. http://gaming.nv.gov/index.aspx?page=149
  4. Tyler J. Jarvis. "Gambling: What are the Odds?". http://math.byu.edu/~jarvis/gambling/gambling/gambling.pdf. Retrieved 2010-11-30. 
  5. Electronic gaming device utilizing a random number generator for selecting the reel stop positions
  6. Electronic gaming device utilizing a random number generator for selecting the reel stop positions
  7. United to Stop Slots in Massachusetts. "Myths". http://uss-mass.org/myths.html. Retrieved 2010-12-1. 
  8. Nevada Gaming Commission. In the Matter of the Petition of Universal Co., Ltd, and Universal Distributing of Nevada, Inc, For a Declaratory Ruling. Declaratory Order. Case-No. 88-8. March 15, 1989.
  9. Harrigan, Kevin. (2007). Slot Machine Structural Characteristics: Creating Near Misses Using High Award Symbol Ratios. International Journal of Mental Health and Addiction.
  10. Cockrell, Garon. (2016). The Rising Popularity of Pop Culture Slot Machine Games. Pop Culture Beast. Retrieved from http://www.popculturebeast.com/rising-popularity-pop-culture-slot-machine-games/
  11. 21 (2008 film). (2016). Wikipedia.
  12. "Keith Taft - BlackJack Player". blackjackhero.com. http://www.blackjackhero.com/blackjack/players/keith-taft/. Retrieved 2010-11-30. 
  13. "Chapter 465 - Crimes and Liabilities Concerning Gaming". Nevada State Legislature. http://www.leg.state.nv.us/nrs/NRS-465.html. Retrieved 2010-11-30. 
  14. "804B Blackjack Buster". hackershomepage.com. http://hackershomepage.com/cheat-blackjack.htm. Retrieved 2010-11-30. 
  15. "Review: BlackJack Buster (Card Counter)". edge.i-hacked.com. http://edge.i-hacked.com/review-blackjack-buster-card-counter. Retrieved 2010-11-30. 
  16. "Card Counter By TMSOFT". apple.com. http://itunes.apple.com/us/app/card-counter/id293742180?mt=8. Retrieved 2010-11-30. 
  17. "iPhone Card-Counting App Banned in Nevada Casinos". mobile-tech-today.com. http://www.mobile-tech-today.com/story.xhtml?story_id=64732&full_skip=1. Retrieved 2010-11-30. 
  18. "Dealing With Card Counters". casinocitytimes.com. http://rose.casinocitytimes.com/articles/1021.html. Retrieved 2010-11-30. 
  19. "Attorney Sues Casinos for Using Card Counting System". reviewjournal.com. http://www.reviewjournal.com/lvrj_home/2004/Oct-19-Tue-2004/news/25027617.html. Retrieved 2010-11-30. 
  20. "Allen Vs. Nevada Complaint". bj21.com. http://bj21.com/allen_vs_nevada/complaint.html. Retrieved 2010-11-30. 
  21. "Mindplay Blackjack - The Latest Vegas Ripoff". bjinsider.com. http://www.bjinsider.com/newsletter_61_ripoff.shtml. Retrieved 2010-11-30. 
  22. "American Roulette: Interview with International Casino Cheat Richard Marcus". vegastripping.com. http://www.vegastripping.com/features/feature.php?feature_id=43&page=6. Retrieved 2010-11-30. 
  23. "Poker Cheating and Casino Cheating Expert: Richard Marcus". richardmarcusbooks.com. http://www.richardmarcusbooks.com/. Retrieved 2010-11-30. 
  24. https://www.casino.org/us/guide/
  25. https://www.statista.com/statistics/270728/market-volume-of-online-gaming-worldwide/
  26. http://www.thefiscaltimes.com/Issues/Taxes/2010/05/20/Internet-Gambling-Betting-on-New-Tax-Revenue.aspx
  27. http://nyproblemgambling.org/wp-content/uploads/2014/12/Costello-RESOURCE-The-Prevalence-of-Problem-Gambling-Among-US-Adolescents-and-Young-Adults.pdf
  28. http://www.safeandsecureig.org/node/18/
  29. https://www.oii.ox.ac.uk/archive/downloads/publications/Effective-Age-Verification-Techniques.pdf
  30. https://www.oii.ox.ac.uk/archive/downloads/publications/Effective-Age-Verification-Techniques.pdf
  31. http://www.safeandsecureig.org/node/19/
  32. http://www.safeandsecureig.org/node/19/
  33. https://www.law.cornell.edu/uscode/text/18/1084
  34. http://caselaw.findlaw.com/us-5th-circuit/1342249.html
  35. https://www.justice.gov/sites/default/files/olc/opinions/2011/09/31/state-lotteries-opinion.pdf
  36. https://www.law.cornell.edu/uscode/text/31/subtitle-IV/chapter-53/subchapter-IV
  37. Banks, J. (2014). Online gambling and crime: Causes, controls and controversies. Ashgate Publishing
  38. http://en.wikipedia.org/wiki/Internet_Gambling_Regulation,_Consumer_Protection,_and_Enforcement_Act
  39. http://www.opencongress.org/bill/110-h2610/show
  40. http://www.usaonlinesportsbooks.com/states/index.html
  41. http://www.legitgamblingsites.com/bovada/
  42. https://www.law.cornell.edu/uscode/text/31/subtitle-IV/chapter-53/subchapter-IV
  43. http://www.ibisworld.com/industry/fantasy-sports-services.html
  44. https://www.washingtonpost.com/sports/daily-fantasy-sports-web-sites-find-riches-in-internet-gaming-law-loophole/2015/03/27/92988444-d172-11e4-a62f-ee745911a4ff_story.html?utm_term=.9f1cd02ef419
  45. http://gaming.nv.gov/modules/showdocument.aspx?documentid=10487