A slowdown in tourism on the Las Vegas Strip has prompted an increase in offers for slot free play. This, in turn, has led to increases in promotional advantage play in which those players are winning millions of dollars, according to an expert in casino surveillance and operational protection.
Over the years, Darrin Hoke has been a prominent industry figure calling out organized groups using slot advantage play to take millions from properties across the country. He believes the problem is getting worse in Las Vegas because of the downturn in visitation and that casinos should be doing more to stop this proliferation of comp fraud with the technology available.
Hoke, who served as a corporate resource for surveillance at Penn Entertainment facilities nationwide, is one of the instructors at the World Game Protection Conference coming up March 3-5 in Las Vegas, where he will talk about electronic game and slot fraud and protection.
Casino promotions and player re-investment programs are the backbone of successful casino slot machine operations. With the expansion of gambling across the world, casinos are doubling down on offering free play in order to gain and retain valuable players. The incentives have drawn the attention of fraudsters, who have created and established well-organized syndicates of players who – through deceptive or illegal means – set up multiple accounts to exploit loopholes in the casino’s comp system.
Some innovative surveillance departments have pivoted their protection strategies from reliance on how it doesn’t look right and tip-offs to developing high-tech digital alert systems to successfully take down comp fraud syndicates and save millions.
“Slot advantage play has ramped up with these persistence state machines out there and must-hit-by jackpots,” Hoke said.
Persistence state slots refer to casino slot machines with mechanics that store game progress, like accumulating symbols or filling meters across multiple spins, creating a hot state that players can exploit. These games, often called true persistence or sticky slots, entice players to continue playing to avoid leaving a filled pot or bonus potential for someone else.
“Now the multi-card players are getting all that play put together and one person goes in and plays the must-hit-by jackpots and are really leveraging from all of those accounts just to go in and hit those jackpots at the casinos,” said Hoke.
The persistence state machines have become more popular in the last four to five years as jackpots have grown and made them more attractive to those committing fraud, he said.
“What they are looking for is to get within a reasonable amount,” explained Hoke. “If it’s a $10,000 jackpot and it gets over $9,960 to $9,970, that’s a play-to-win scenario. They go in and hammer that game until they win the jackpot. No matter what, they are going to get back all of that $10,000.”
If they use the free play scammed off the casino, now it’s not costing them anything to get to the $10,000 jackpot, said Hoke. When looking at the data, he noted that you can see they are up more than $200,000 on the casino. These are people who don’t play any games other than persistence state games, but sometimes they will play video poker to get other free play.
The concept behind persistence state games is to have regulator customers win those jackpots, but instead the advantage players have recognized this and go in and wait for the games to be at a certain level and hammer away until they win, Hoke said.
“They drive good customers off those games,” he said. “They will approach them and say ‘How long are you going to play that game?’ and of course the customer doesn’t complain but walks away. They have this ongoing issue with organized groups coming in and playing those must-hit-by and doing multi-carding at the same time. It makes it dangerous. A blackjack player getting a 1% or 2% advantage over the house counting cards, these guys are getting 20%, 30%, and 40% advantage over the casinos.”
Hoke claimed it’s even worse in Las Vegas because of how soft the business has been there, so groups are “really tearing it up.” There are groups walking out of Strip casinos with $1 million a month.
Free play offers have become more robust in light of the drop-off in customers as a way to buy the business from local residents, said Hoke. Those offers are getting higher, and those players are using free play to hammer persistence state games, he added. He reported that he’s heard of people getting $4,000 a month and are part of a group of more than 100.
“I know two different organized groups that do that, and they’re saying openly they are making at least one million every month from one casino,” Hoke said. “Is it above board? I don’t think it is. There’s a lot of shadiness going on with that. Is it illegal? It all depends on how they are going about doing it. It could be abuse of a credit card or something else. I’m not sure how there is a way to get a criminal case on them. The way to get them is the civil version of RICO.”
That’s a lawsuit through the federal Racketeer Influenced and Corrupt Organizations Act that casinos can file against organized groups and get back three times what they lost, Hoke said.
The Strip had a losing month in December, down about $34 million or 7% year-over-year, despite increased handle. Hoke said he wouldn’t be surprised if persistence state games contributed to that.
“There seems to be a debate whether or not it hurts the casino because they are still going to give out that jackpot anyway,” he said. “They are just giving it to the wrong people. That’s the issue.”
Casinos can use business intelligent software to crack down on this abuse, which will be highlighted at the World Game Protection Conference. There are tools on the back end of the system to help identify those people – one person using multiple different cards during the same gaming session; people playing specific must-hit-by machines; and people who only play those games and leave without spending money on hotels, restaurants and other operations.
“This is a business for those players, and I wish the casino industry would understand that,” said Hoke. “It’s all about the profit for them.”
There’s latency for casinos to track what’s happening and the need to build custom reports to identify trends, he said. Information has to be taken from the legacy slot system and put into an analytics program.
“The business intelligence tools have always been there, but the problem is the casinos have never leveraged them in a way to help them identify fraud,” explained Hoke.
“They leverage them to help identify where they can fine-tune performance on the floor but not identify fraud. These people coming in to take advantage of your slots aren’t spending any other money in your operation and aren’t what you consider to be a good customer. If you knew a person was counting cards, you would cut them off completely, but a person who comes in and hits you for a 20% or 30% advantage, they are welcomed back with open arms. There shouldn’t be any debate about this at all, and I hope this is the message operators see and understand.”
