Cheating the Casino

There were two stories that crossed my radar today surrounding people attempting to take advantage of the casino.

The first was a story from Wired where someone named John Kane and his friend figured out an exploit on a particular brand of video poker machines which let them win as much money as they wanted to. They aren't particularly smart about it, argue with each other, and eventually got arrested over it. It's a fascinating story. But I don't quite understand how these people can be considered criminals for taking advantage of a thing the machine let them do. The machines are normally rigged in favour of the house.

The other story that hit my radar this week in this vein was Phil Ivey losing his court case this week. He was attempting to claim money that he had won playing high stakes baccarat. It turns out that he had arranged the situation so that he could get an edge in the game, and the casino refused to pay him his winnings by accusing him for cheating. One of the things that gave him this edge was a technique called "edge sorting". Basically, certain cards in the deck were rotated and the card backs were distinguishable when arranged that way.

From an outside perspective, Phil's approach can certainly be viewed as cheating. But the casino allowed him to play in these conditions, and if Phil had lost then would he have had any recourse? Nope! So the casino was totally freerolling him.

These are fascinating stories to me - I've always enjoyed hearing the tales of people trying to beat the casinos at their own game. It's an area fraught with risk though. If you get caught doing the technique you are trying, it can be difficult to claim your winnings.

Edit: This ESPN article does a better job walking through the issue than I did.