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U.S. gaming regulators can learn from recent online case in Europe

| Friday, May 31, 2013, 8:57 p.m.

Officials who write and enforce rules for America's nascent online casino industry could learn important lessons from the handling of allegations of rigged software at two popular European gambling sites.

However, key participants disagree on whether the five-month investigation by the Gibraltar Regulatory Authority is something to emulate or avoid.

Gibraltar's gambling commissioner says it demonstrated a high level of openness necessary between regulators and casino operators, “something many other regulators have failed to achieve.”

A gambling mathematician who questioned the fairness of two games says the probe opens the door to future abuses.

The case interests U.S. gamblers because legal online gambling sites are beginning to emerge in this country. Online poker rooms are operating in Nevada, while sites offering an array of casino games are on track to open in New Jersey and Delaware within a year. Several other states, including Pennsylvania, are considering legalizing in-state Internet gambling.

America's land-based casinos have flourished because strict government regulation give players confidence that luck and skill determine whether they win or lose — not loaded dice, a stacked deck or a rigged machine.

Online, unscrupulous operators can have games programmed to increase the house edge without players' knowledge. Adaptive software can recognize how a player bets and increase the chances of a loss.

That was the thrust of the complaint involving the European sites. In games called ReelDeal and HiLo, bettors wagered on the rank and suit color of a card pulled from a virtual deck. One player documented more than 19,000 hands in which the results were skewed beyond what random chance would allow, according to Eliot Jacobson of Santa Barbara, Calif., operator of Certified Fair Gambling, which audits Internet gambling software. He voluntarily examined the complaint.

Gibraltar Gambling Commissioner Phill Brear investigated after the case drew attention on www.casinomeister.com, which bills itself as an online casino watchdog. In a report posted there May 20, Brear acknowledges that dishonest operators or software producers can enter the online gaming industry, but “in Gibraltar, we proactively guard against this by a very restricted licensing policy.”

He says he found no evidence of adaptive software or of dishonesty by casino operators. He says the complaining player violated casino rules by using multiple accounts and computer “bots.” An email from Brear to Player's Advantage calls the player “the original cheat.”

The email says casino regulators and operators must be open with each other.

“We will not be able to maintain that trust if the disclosure of minor errors results in disproportionate or unwarranted public embarrassment for the operators; but, if that trust is breached, the outcome may be fatal to a (licensee). For this reason, this episode warranted no more than the significant inconvenience the suppliers have been put through in dealing with my requests for material and explanations/meetings.”

Jacobson says the authority botched a chance to explain what happened and determine remedies, including ordering repayments to affected players.

“(The report) exposes that the regulatory agencies for online gaming — at least the GRA, which is one of the biggest anywhere — are not only not regulating, but barely competent,” Jacobson tells Player's Advantage.

As states devise rules governing Internet play, they must ensure regulators avoid getting cozy with those they oversee and that casinos have protection against cheats.

Most importantly, casinos online or on land must be required to adhere to the toughest standards for fair play.

Mark Gruetze is administrative editor for Trib Total Media. He can be reached at 412-320-7838 or players@tribweb.com.

44th annual WSOP shuffles up and deals

The World Series of Poker officially started May 29 with a No-Limit Hold 'Em tournament for casino employees.

The 44th annual WSOP, the world's biggest and richest series of poker tournaments, will award gold bracelets in 62 events during its 50-day run at the Rio Hotel and Casino in Las Vegas. Last year's WSOP had 74,766 entrants overall, including 6,598 in the $10,000-per-seat Main Event. About 100 Western Pennsylvania players were among the contestants last year.

Money trail

Slots players lost $48.24 million at Pennsylvania's 11 casinos during the week ended May 26, the Gaming Control Board reports. That's up from the $47.76 million in the comparable week last year.

The state gets 55 percent of that gross slot revenue, or what's left of players' wagers after jackpots are paid.

Statewide, the slots payout rate is 89.92 percent since the fiscal year started July 1. For every $100 bet, the machines return an average of $89.92. Highest payout rate: 90.63 percent at Parx in Philadelphia; lowest: 89.37 percent at Harrah's Philadelphia and Hollywood Penn National near Harrisburg.

Figures for Western Pennsylvania casinos:

89.89%

Rivers; weekly slots revenue of $5.62 million, up from $5.35 million last year

89.84%

Meadows; weekly slots revenue of $4.58 million, down from $4.67 million last year

89.87%

Presque Isle in Erie; weekly slots revenue of $2.67 million, down from $2.82 million last year

QUESTION OF THE WEEK

How come the column hasn't been appearing every week lately? (various calls and emails)

Unfortunately, I've been beset with eye problems worse than seeing a blackjack dealer draw a six-card 21 to beat your pat 20. That has kept me from reading or writing for several days at a time. I'm still on sick leave but will write as I'm able. I hope to return to work by the end of June.

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