There’s no doubt about it, gambling means big business. Casinos in the U.S. raked in $62.8 billion in 2011, according to Spectrum Gaming Group, a research and professional services firm.
But with the good comes the bad for the gaming industry — cheating is also a big money maker for those who find ways to deceive the house. Thanks to technology, it’s getting harder to pull off. Casinos have cameras trained on every table and are always on the lookout for anything suspicious. But some people still manage to do it. Casino cheating expert George Joseph of Worldwide Casino Consulting estimates the industry loses tens of millions of dollars a year in scams.
The scams can be pulled off with age-old sleight-of-hand tricks or with the aid of high-tech devices. Either way, they are illegal and could mean time behind bars for those who are caught. However, penalties vary from state to state. In Nevada, for example, someone convicted of cheating faces one to six years in prison, or a fine of up to $10,000, or both.
So what are some of the ways people cheat in casinos? CNBC.com spoke with Joseph, who is author of “The 101 Most Asked Questions About Texas Hold’em and Poker Cheating,” to compile a list. Some are common cheating methods; others are employed less frequently but can result in a big payday.
Photo: Adam Jeffrey for CNBC.comFalse Shuffle
This casino cheat needs the participation of the casino’s card dealer to work. The dealer employs a false shuffle, which is meant to look like a regular shuffle but secretly leaves some cards in place. That allows the players involved in the conspiracy, who have been tracking the cards, to know when the unshuffled cards are dealt.
It was a scam used to great effect by the Tran Organization. The gang hit casinos all over the U.S., pocketing up to $7 million in false shuffle mini-baccarat and blackjack games. The organization was ultimately brought down, and more than 40 people pleaded guilty to charges relating to the cheating scheme, including its founders, Phuong Quoc Trong and Van Thu Tran.
Photo: Steve Allen/Brand X Pictures/Getty ImagesRoulette Past Posting
Past posting in roulette is one of the oldest tricks in the book, and it’s still plaguing the industry, Joseph said. It’s also quite simple — cheaters place their chips on the winning number after the ball has dropped in the roulette wheel. Usually one player in on the scheme will distract the dealer, and a second player will put his chips, with his conspirator’s different colored chips underneath, on the winning number. If the second player is caught, his chips will be removed, but the first player’s chips will remain.
Photo: Adam Jeffrey for CNBC.comHidden Camera Baccarat Scam
This move requires a hidden camera up the sleeve of the cheater. When the player cuts the deck of cards, he or she takes the cut card and drags it over the top of the deck, slightly separating the cards from each other. The camera records the cards, and an accomplice watches and relays the information back to the gambler via an earpiece.
It’s most commonly used on baccarat but can also be used in blackjack, Joseph said.
Card switching — or hand mucking, as it is also known in the industry — has been around for years, according to Joseph. However, it has moved from simple sleight-of-hand tricks to using hidden “holdout” devices. Gamblers use the device to hide a card up their sleeve and deposit it on the table, and then remove and hide cards from the table.
The gaming industry has lost millions of dollars because of this scam, Joseph said. Foxwoods Casino Resorts in Connecticut fell victim to it in 2010, when two South Korean nationals — Young Su Gy and Wookyung Kim — stole several hundred thousand dollars by using a holdout device to switch cards in midi-baccarat games. The two were caught, and they ultimately pleaded guilty to conspiracy to commit wire fraud and theft. Gy was sentenced to 18 months in prison; Kim was sentenced to 12 months behind bars. They were also ordered to pay $870,505 in restitution.
Photo: Stuart Gregory/Photodisc/Getty Images Insert Photo: George Joseph/Worldwide Casino ConsultingSlot Machine Bill Validator Device
As slot machines have gotten more sophisticated, so have the cheating methods. In the old coin slot machines, cheaters could attach a piece of string to the coin, with a paper clip on the end to prevent it from falling into the hopper.
The newest way to scam slot machines involves a small computer device that tricks the bill validator. The device, usually disguised by a $1 bill, has two prongs that are inserted into the bill validator. Once they hit the contact point below the validator, the slot machine will read any bill that’s inserted as a $100 bill. The most recent devices don’t even need another bill to work — instead they just add credits after hitting the contact point in the slot machine.
However, casinos have caught on and the scam is less common than it once was. Slot machines have now been retrofitted so that the devices won’t work, according to the Nevada Gaming Control Board. So the only way for a cheater to use the device is to find a machine that hasn’t been updated.