Casino Surveillance News

May 2010

Welcome to Casino Surveillance News, the first and longest-running online trade letter for Casino Surveillance and Security. We are still here and still operating, though I am (still) occasionally a bit slow in getting posted.

This entire newsletter can be viewed at http://casinosurveillancenews.com/

The news-only portion can be seen at http://casinosurveillancenews.com/newsletter-2

CSN News:

There are a number of changes for CSN beginning this month, some of them quite profound.

The first is that I will no longer, for the foreseeable future, be able to travel to deliver training seminars.

The second is that I cannot now sell training programs to casinos in Pennsylvania or New Jersey, due to an agreement reached with my new employer. Sorry, boys, you waited too long. I know that I have posted information on several networks stating that I was both willing and able to put together training programs for you, but only one casino in Pennsylvania took note, an old friend of mine, and it is now too late for the rest of you. I now work for this casino, and they required I not consult for other casinos in these two states.

The third is that I am once again a full-time casino employee;  my employer will remain undisclosed, though I can and will tell you it is in Pennsylvania. I will be leaving Las Vegas soon.

One more thing: My boss and I are looking for two more people who can report to work in the Philadelphia area before we open table games. Here are the “little boxes”:

• 3-5 years of verifiable casino surveillance experience, specifically including table games (BJ, Craps, Roulette, Baccarat, “carnival games”). Formal training on the games and their scams is a plus, but lack of formal training is compensated by experience.
• Able to obtain a gaming employee license in Pennsylvania (already licensed in PA or New Jersey is a plus); this means background check similar to NJ, drug test pass, clean record. We simply don’t have the time to handle anything questionable.
• Must be able to report to work near Philadelphia by mid-June.
• It is also helpful if you have experience with one or more digital surveillance systems. List the ones you have used.

Further people may be hired with less experience down the road, but at this time we need some people who can help us right off the bat. If chosen, you would be going in as investigators, not supervisors.

Email me at consultant@casinosurveillancenews.com  I will be screening and passing on qualified candidates to my new boss. Be aware that there is a very short time available for this, so get your resume to me before Wednesday May 5. Anything received after 1600 hours PDT on that date will be returned.

Currently Available Programs:

CSN’s complete, on-site, one-payment permanent training program, customized for YOUR casino operation can still be set up for you. We can accommodate privately owned, corporate, or tribally owned casinos outside of Pennsylvania and New Jersey. Please see what is available at this page: http://casinosurveillancenews.com/surveillance-training-programs

The training programs involve the real world of gaming operation, in the prevention and detection of real-world scams and other threats to the actual bottom line of the casino.  Each includes a number of Power Point presentation classes including text, voice-over narration, video clips illustrating scams, situations, required coverage and universal problems, and other photographic materials, as well as text materials to be studied. Each also has tests designed to direct attention to areas needing to be restudied.

The training we are making available is designed to bridge the gap between new people and experienced operators, between those with some experience and those with decades of experience, and to fill in the gaps in experience when a person comes to a new casino that has games he has not overseen. Our training is DISTILLED EXPERIENCE from many sources, including investigators, supervisors, directors and gaming law enforcement personnel.

However, it will take more than three weeks to deliver this now, as I have other responsibilities, getting this PA casino ready to deliver table games, working a tight deadline. We will still deliver as rapidly as possible, however custom modifications for your casino will require a little more time.

Please visit these addresses for details of the available, customizable training plans:

http://casinosurveillancenews.com/surveillance-training-programs

http://casinosurveillancenews.com/training-materials/available-classes

WE STILL SET THE STANDARDS FOR TRAINING OF CASINO SURVEILLANCE

and for

BASIC SECURITY TRAINING FOR CASINOS

Contact jimgoding@casinosurveillancenews.com

Keynote Article:

This article was written by Professor I. Nelson Rose, who publishes Gambling and the Law® on his own website. I was going to write an article about Responsible Gaming, and I thought this short article expressed it a lot better than what I was attempting to write this day.

Loan Called for Playing Poker

A federal District Court in New York has ruled in favor of a lender against a borrower, who happens to be a lawyer.

The borrower’s offense?  He played poker.

Actually, the lawyer did more than just play poker – he used his law firm’s loan to finance high-stakes games.  And it did not matter that the lawyer claimed he was a fairly consistent winner.

The case started on October 13, 2005, when Counsel Financial Services, LLC, agreed to lend Michael J. Melkersen’s law firm up to $250,000 – at 18% interest.  Counsel Financial is a commercial lender which specializes in loans to law firms.  Melkersen Law, P.C., calls itself “A Serious Law Firm.”

About two years later, Melkersen asked that his line of credit be increased to $500,000.  A Counsel Financial representative told him his law firm was one of the company’s “success stories” and that it looked forward to a “long and mutually beneficial relationship.”

But then something happened.  Megan Brooks Payne, Senior Vice President of Counsel Financial, asked for more financial documentation and sent an auditor to review Melkerson’s books.  Payne said that she would not approve the increase in the credit line and suggested that he find other individuals who would personally guarantee the loan.  So, Melkersen got his wife to co-sign, and sent in her financial information.

But Payne wanted an additional personal guaranty by an “individual of substance.”  So Melkersen came up with another co-signer, a doctor friend and client with significant assets and income.

But that was not enough.

The problem became clear when Counsel Financial called to say that not only was it not increasing the line of credit, but it was calling in the balance due on the existing note.   The reason?  “Counsel Financial decided not to extend my line or renew it because it believed I was using its money to play poker in violation of my contract.”

Melkersen objected.  He said, “I was not aware that I could not take personal draws from the Counsel Financial line in a reasonable amount, nor was I aware that there were any restrictions on how I used my partnership draws or otherwise spent my personal funds.”

As for the poker, Melkersen “explained that he had been successful in that endeavor for many years, and therefore, my activity in that regard was always done with an expectation of a profit and improving my personal financial situation.”  Melkersen was rated 3,828th on the World Series of Poker’s website.

Credit for gaming is an unusual beast.  Ever since Queen Anne of England signed the Statute of Anne in 1710, gambling debts have not been collectable in court.  That is beginning to change, by statute in some cases, by court decision in others.  In Nevada, for example, the State Legislature wrote a law allowing casinos to sue players on written markers, but players can only file claims with the Gaming Control Board, not file suits in courts against casinos, to collect winning bets.

Lenders want to make sure they are paid back.  If they knowingly lend money to enable the borrower to gamble, they often cannot sue to get their money back, even if the borrower wins.  Of course, the bigger danger is that the players will lose, and may lose everything.

Imagine walking into a bank, like you would a casino, and asking for $10,000 to play craps, or even to enter the WSOP.

Although Melkersen’s note said the loan could only be used for his law firm’s working capital, the case was resolved on a separate issue.  Although Melkersen claimed Counsel Financial breached its agreement by improperly calling in the loan, he failed to say how this caused him any damages.

Since he had stopped making payments on the note, the Court sided with the lender.

© Copyright 2010.  Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law and is a consultant and expert witness for players, governments and industry.  His latest books, Internet Gaming Law (1st & 2nd Editions), Blackjack and the Law, and Gaming Law: Cases and Materials, are available through his website, www.GamblingAndTheLaw.com.

Comments: If the borrower was a “fairly consistent winner,” why did he need to get money from his law firm operating capital credit in order to play? What is a lawyer–an officer of the court–doing borrowing money from his firm for his own use (no matter what it is)? Note that the attorney was exhibiting one of the major signs of a gambling addict: borrowing money in order to gamble–at high interest, as well. Opinion: the court was completely correct, and so was the lender.  Jim

It’s News Time:

(I will supply text of the news article if any of these links do not work. Email to inquiry@casinosurveillancenews.com)

Busts and Scams:

A New York judge refused to stop subpoenas from the state inspector general seeking state Senate information about the awarding of a lucrative video slot machine contract for Aqueduct racetrack to a politically connected group. See the story

Late last autumn, a Hong Kong jury convicted four men of a conspiracy to commit bodily harm and a fifth of soliciting a murder. The men had been ordered to break the arms and legs of a dealer at Sands Macau suspected of helping a patron cheat millions of dollars from the business. Later, a call went out to murder the dealer, court records show. But then one of the gangsters balked and reported the plans to authorities. (Editorial note: this is a very in-depth story reported by Reuters, recommended reading for casino surveillance and all other personnel and gaming regulation personnel.) See the story

A U.S. District judge sent a Pennsylvania man convicted in a major credit card scam at Foxwoods Resort Casino back to prison after surveillance staff captured recent video of him at both of the region’s casinos. See the story

THREE foreign nationals, caught cheating at the roulette tables of Resorts World Sentosa’s casino, were arrested in Singapore. The trio – a Spaniard and two Frenchmen, between the ages of 46 and 64 – almost made off with $13,400 in winnings. Their scam was a standard past-post on roulette. See the story

A woman claims that a Harrah’s night club boss attempted to ply her with alcohol and coerce her to provide companionship to several men at the club when she interviewed for a job. She and a friend of a worker have joined 13 others who filed suit against the manager and the casino, alleging harassment. Harrah’s insisted it fired the manager once an investigation found evidence of inappropriate behavior. See the story

A team of masked thieves burst into a crowded French casino, fired their assault rifles into the ceiling and made off with nearly $39,000. The headquarters of the international police agency Interpol are just down the street. It was the third high-profile casino robbery in Europe recently. The other two were in Switzerland and Germany. See the story

A U.S. District judge sentenced a former Mohegan Sun table games dealer to two months in federal prison and three years’ supervised release for participating in a card cheating scam operated by the Sand Diego-based Tran Organization. This is one of the latest in the long, involved story of the Tran organization. Twenty of the team members and other involved people have been convicted or pled guilty. See the story

The FBI is investigating possible public corruption involving Alabama lawmakers’ handling of a bill that could legalize electronic bingo casinos. Republican Gov. Bob Riley, who opposes the measure, set up a task force a year ago to halt the spread of the casinos. The middle-of-the-night raids stirred racial tensions as black leaders were angered their communities were stripped of jobs and tax revenue. See the story

An Indianapolis man banned from a riverboat casino’s blackjack table because he counts cards just wants the casino to follow the rules, his attorney told the Indiana Supreme Court. The casino on the maintains that it, like any private business, has the common-law right to choose not to do business with anyone “for any reason or no reason.” See the story

MGM Mirage started trying to find a way to get into the Macau market in 2001 but was shut out until the company began negotiations with Stanley Ho, the Hong Kong billionaire long suspected of ties with Chinese triads through his Macau casinos. When Nevada regulators nixed that idea, the MGM Mirage substituted daughter Pansy Ho and struck a joint venture agreement with her in 2004. Nevada regulators approved it in March 2007, after construction of the MGM Grand Macau already was under way. Pansy Ho was deemed an independent woman by Nevada authorities. But not in New Jersey. Officials there had trouble with her associations, and one major issue was that daddy was the source of 90 percent of “her” money for the partnership. See the story (Editorial Note: MGM Mirage has put its Atlantic City casinos and license up for sale, deeming them less valuable than the Macau properties. As yet there is no further inquiry from Nevada GCB.)

Saying a New Jersey Casino Control Commissioner had “a predetermined result” in mind when he recommended that relatives of high-ranking mobsters be awarded a casino license, the state Division of Gaming Enforcement blasted the decision as “a travesty.” The division says the commissioner ignored overwhelming evidence that owners of a concrete reinforcing company continue to have contacts with organized crime figures. See the story

A federal jury returned a $200,000 verdict after finding that Venetian security officers had falsely imprisoned a hotel guest from New York in 2004. See the story

After a nine-year legal battle, professional gambler James Grosjean will receive a settlement from the state for up to $65,000 on his allegation he was held illegally by two state gaming agents in a Las Vegas casino. See the story

Two managers at Lilac Lanes and Casino in North Spokane are accused of embezzling hundreds of thousands of dollars. Gambling commission agents say the accounting manger and general manger skimmed almost $175,000 from the casino’s ATMs. See the story

A former Chinese police chief was sentenced to death, in a sprawling gangland corruption case that has riveted the country. Prosecutors had accused him of taking bribes worth more than $2.4 million from gang members he protected while he was director of the Chongqing Municipal Judicial Bureau. The chief was accused of protecting the gang operations masterminded by his sister-in-law, who was sentenced to 18 years in prison for running illegal casinos and bribing government officials.  See the story

Two New Jersey casinos have been hit with separate $10,000 fines by state gaming regulators, while three casinos forfeited more than $3,200 they collected from 117 underage gamblers. The Casino Control Commission fined Bally’s Atlantic City and Caesars Atlantic City for failing to exclude a gambler who put himself on the state’s self-exclusion list in 2003. The person was able to gamble several times in 2005 and 2006, losing $48,562 at Bally’s and $38,759 at Caesars. See the story

Online poker houses that were owed tens of millions of dollars by internet tycoon Daniel Tzvetkoff turned him in to US authorities.  Mr Tzvetkoff, 27, who at his peak was worth about $80 million, will apply for bail in the US this week after he was arrested on Friday and charged with money laundering of up to $600 million. He is charged with money laundering, money laundering conspiracy, gambling conspiracy and bank fraud conspiracy and faces 75 years in a US prison if convicted.  See the story

Other News:

Investors in the Philadelphia Foxwoods Casino project stated they were “blindsided” by the abrupt decision of Steve Wynn to pull out of a deal to build a South Philadelphia gambling hall. See the story

Sydney, Australia’s Star City casino has launched a surveillance blitz to crack down on cheating, theft and unruly patrons, as it seeks to clean up its image ahead of a relaunch next year. See the story

For a feature article taken from an interview with Surveillance Director Ted Whiting on building the Surveillance system for a megaresort-casino, see the story

Another feature story on retro coin-operated slots machines returning to Vegas can be found here (Editorial note: I really hope their Surveillance team has someone who remembers old coin-op scams. There aren’t many of the old-timers left. There weren’t many to begin with who really knew this part of the business–we were often discouraged from even watching slots–but there are still a lot of the old scammers out there, who were almost put out of business in the last few years.)

That’s all for this month, Folks.

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Copyright © 2010 by Jim Goding. All rights reserved. Unauthorized sales or duplication by any means is a violation of law and of the proprietary rights of the author. Purchase this author’s work at www.casinosurveillancenews.com.