The expansion of gambling across the world has casinos doubling down on offering free play to gain and retain customers, but those incentives have drawn the attention of fraudsters setting up syndicates to take advantage of properties, and tribal casinos are among those leading the way to stop it.
That was highlighted at the World Game Protection Conference earlier this month in Las Vegas, where there was a focus on how casino promotions and player re-investment programs that are the backbone of a successful slot machine operations are being targeted.
These syndicates are using deceptive or illegal means to set up multiple accounts to exploit loopholes in the casino’s comp system.
Three surveillance executives shared how they’ve pivoted their protection strategies from reliance on what doesn’t look right and tipoffs to developing high-tech digital alert systems and successfully take down comp fraud syndicates and save millions of dollars.
The panel included Scott Easton, director of surveillance operations for the Pechanga Gaming Commission in southern California; Tony Weiss, chief surveillance executive at Mohegan Sun in Connecticut; and Richard Smith, a retired FBI agent and vice president of anti-fraud strategy and investigation for the San Manuel Tribal Gaming Commission.
Weiss said slots are the biggest revenue generator for the casinos. That’s why there’s so much investment in bringing in and retaining customers. The problem is groups are re–engineering those programs, knowing them better than the casinos, and attacking the promotions.
“The slot syndicates control lots of (player’s) cards,” Weiss said. “For every 100 cards that someone is controlling within a group, however they get them, you start at $1 million as far as lost revenue.”
Several attendees at the conference are facing the issue themselves, including Easton, who said originally these groups were bigger. But through the use of data, they’ve been able to blunt people coming in and establishing 100-something accounts.
“Our first group had 144 accounts and six people were running it,” Easton said. “Our first step wasn’t about catching them, but detecting it before it happens and becomes an issue.”
Besides the groups, Easton said they are also seeing individuals come in, and he talked about one man who had 120 standard deviations outside of where he should have been. The player was supposed to be losing a certain amount, but instead was winning an amount 121 times more.
“When we found this guy, we were looking at what he was doing differently than our other players and taking advantage of our system,” Easton said. “The first step was watching him and seeing him come in every day and what machines he was hitting on the floor. That one-off guy was winning $300,000 a year against us, and that’s a lot of money. When we finally kicked him out, he had his mom, dad, and grandma there.”
This is different from what’s been seen on table games players because there’s nothing discreet about it, Easton said. “It’s all over the spectrum how big these groups are and how well-organized they are.”
Smith said those who push the limits are the players that tip off casinos. One thing the gaming industry has that’s unlike others is their camera systems to check on players, what they are doing, and how they are doing it. The key is to go backwards and look at the data that pairs up with it.
“That’s where I say anybody, no matter your size, is able to do that,” Smith said of casinos. “We have incredible data sets and surveillance and as you bring those teams together, you can tackle these things.”
Easton said the slot advantage players are showing the games they are targeting up front, and casinos have to ask why they are targeting that game that might have the lowest house advantage.
“No matter what they are doing, they are going to have to get that money out of your property, and to get that money out of your property they are going to want to give up as little as that money,” Easton said. “They can target your video poker machines at 99.54% payback to the player, that’s where they are going to do it. If you give them $3,000 in free play, you have given them $3,000 in cash.”
Easton said someone may look on paper to be a good players, but they may have six different cards and are using the free play and ditching the card.
Cameras can be trained on an area and checked how it compares to the data in the system and why someone is an outlier versus other players – winning more and more spins per minute and inserting so many cards so often.
Smith said on the surface, the players look to be financially viable for the casinos.
Weiss joked that when marketing people say they hate you after a slot player gets banned from the property for advantage play, you know you are doing a good job.
Easton pointed out how information is posted online by players mapping the casino floor and telling customers where the lowest house advantage game is on the property.
“That could be your first step at what to look at to start this program off and see what your players are doing when reinvesting in free play,” Easton said. “A lot of properties are going to turn off free play for video poker, and that’s a good idea, because you can have some high returns.”
Video blackjack has a low house advantage, is fixed, and there’s no taxes on jackpots. That’s where they can get the most money out of free play, Easton noted.
“The organized teams will be earning that free play while also targeting machines on the floor that don’t cost them any money,” Easton said. “If they are finding these must-hit machines, what we have seen on property is teams coming to your property, scouting these must-hit games, sitting on them, calling their friends to come play it, and running it to this must-hit.”
It works in free play because they are rotating out their cards over and over again, Easton said. They are earning points while trying to hit the jackpot.
“They are double dipping,” Easton said. “They are coming in and not losing any money, and then you’re paying them to come in and beat you again and then the teams are coming in and hitting you on every single giveaway day and free spin day. It starts with finding out where they are going to do it and observing it for a long time and taking note of how they are attacking your program.”
No one has enough eyes in the sky to watch these people, so it’s important to map out the floor and understand what they are doing by looking at the data, Smith said. Algorithms can be built to help with detection, which triggers alerts.
“You are going to get some false positives in there,” Smith said. “There are people who are superstitious and pull free play and pull their cards and do different things. That’s why we have surveillance, and we’ll go back and take a look. The key is you have a bread crumb, and this is how you’re going to identify many of these groups. Before you know it, you will be able to address a lot of these challenges that are out there. It’s independent of size and your ability to do this, and you’ll be amazed.”
A year ago, Smith said many properties were unaware of what was happening on their casino floors, because it’s not readily seen when looking at the top line of profitability. It’s only when digging down that there’s anomalous activity outside of standard deviation.
“The greedy and the stupid rise to the top and then you start chipping at that,” Smith said. “You will find out you can successfully address this very effectively through the data analytic approach. Nobody can do it without developing the analytic tool to back you up and point you in the right direction.”
Smith pointed out that there’s a pattern and often these groups have player cards with sequential numbers.
In addition, Easton said these groups are talking in online forums, and the key is finding those and gaining tips of what they are doing and what’s on the horizon. That will help properties stay ahead of it before experiencing any losses.
Another monitoring tool for advantage play is if someone is circling customers and pushing them off machines. Those people should be monitored and kicked out for harassing guests, the panel said.
The reason is the advantage players are taking away from the good customers who funded the progressives. No one wants those players to burn out, and that’s what happens when they don’t hit the jackpot, Easton said.
“They go broke and get burned out on playing and won’t play there anymore because they are having a bad experience,” Eason said. “They may not even know why they are having a bad experience, but you will see it online how they say the casino is tightening their slots. Maybe advantage players are hitting the the jackpots. I know when I work these cases and jump on other casinos around the area and usually their faces are on the website because they are hitting jackpots.”
In another suggestion, Smith said surveillance people should be looking at people who put in small amounts in the slots and have a low rate of play. They are going to identify machines in a positive state – either persistent or must hit and take a photo and turn around and get someone over there.
“The key is they will throw in a TITO ticket or a few bucks, and they are going to cop a squat,” Smith said. “If they are just lingering with no money in the machine you can easily remove them with security, but if every few minutes they are hitting a penny or something you can look at your data set for a low rate of play over a specific time. Often you will catch the financial exchange between the person sitting on the machine and the person coming to take it – record all that. It’s a data set that will point you in the direction of these teams that are taking advantage of those advantage-playing machines.”
