Question of the Day - 08 April 2010

Rather than contact individual casinos which, we concur, would likely be less than forthcoming about these incidents, we contacted the Chief of Enforcement at the Nevada State Gaming Control Board, whose department is in charge of adjudicating in such cases, and who we've always found to be extrememly helpful. But before we relate what he told us, here's some thumbnail background on the cases you reference, plus a few others, just to give an idea of the different scenarios that can arise and how they are dealt with.

• In 1999, a trial judge in Tunica County reversed a decision by the Gaming Commission and awarded player Effie Freeman a $1,742,000 jackpot she allegedly hit on the Cool Millions Slot Machine at Splash Casino in Tunica, Mississippi on 8 April, 1995. However, the state's highest court then reversed this decision, saying the Gaming Commission had to be upheld if there was any evidence supporting its decision. This case was complicated by the fact that the casino where the incident took place closed down during the protracted legal wranglings over Ms Freeman's jackpot and one judge wrote a dissent, saying that he would have awarded the jackpot on account of the casino having "spoiled" the evidence before it could be independently examined.
• In 2001, after other controversial jackpot scenarios in Mississippi, the Supreme Court was so frustrated with how the state's casinos were handling these cases that they actually awarded a $509,000 jackpot to a player, even though the evidence strongly suggested that the plaintiff had only lined up two of the three required symbols and was thus entitled to a maximum prize of $20,000. The ruling was made on account of the numerous regulatory and procedural violations perpetrated by the casino in question and to teach them a lesson.
• In September, 2006, a casino patron at Table Mountain Casino in California was playing a "Deep Pockets" slot machine, which was part of the mystery jackpot progressive link system. Mr Sornpaserd Unkeowannalack believed he'd won $737,000, but the manufacturers claimed there was a malfunction in the progressive system, that the maximum payout his machine could have awarded was $10,000, and that the malfunction voided any jackpot. Nevertheless, as a "gesture of goodwill," the casino offered the player the maximum dollar amount that could have correctly registered.
• Another player got "lucky" in 2006, this time at the Seminole Hard Rock Casino in Florida. In September of that year, Freddy Howard was handed a check for $259,945.75, although nobody from the casino would admit he deserved it. Executives said a computer glitch only made it appear Howard had won a jackpot Aug. 29. "We are making this payment as a gesture of good will," said Allen Huff, chairman of the Seminole Gaming Commission. The payment was for the full amount of the disputed jackpot. Huff also said Howard had been using a players club card that belonged to his father, Felix Howard, and thus wasn't eligible to win, even if there hadn't been a computer error. We found no explanation as to why the casino agreed to settle.
• In August, 2007, Gary Hoffman was playing the nickel slots at New Mexico's Sandia Resort and Casino, when he appeared to hit $1.6 million. Sandia said the machine had malfunctioned and claimed they offered him the maximum payout of $2,500 for that particular slot; Hoffman claimed they gave him $385 and a few free meals. He pursued the case through the courts but in January of this year, the New Mexico Court of Appeal found in favor of the casino.
• Also in 2007, a Pennsylvania man was playing the Wheel of Fortune slot machine at Philadelphia Park casino and appared to win $102,000. A spokesman for the venue at the time stated that it was "just an error in the communication system" that originated in the in-house computing system, rather than in the machine itself. The player was offered two buffet comps.
• In May, 2009, Harrah's settled with Angela Domino after two years of legal wrangling. On the evening of May 3, 2007, the 79-year-old had been playing Atlantic City Spin Poker, a progressive slot game, at Harrah's Atlantic City. At 8:26 p.m., the nickel slot machine she was playing indicated she'd won the top prize of $86,000. However, a casino employee then told her that in fact someone else had hit the progressive jackpot three minutes earlier and that the machine had already reset to the starting level jackpot of $20,000, which they awarded Domino, although she maintained her machine had clearly displayed the $86,000 jackpot still. She fought the case and eventually the two parties settled for an undisclosed amount that was subject to a confidentiality agreement.
• In 2009, Bill Seebeck was playing a $4 slot machine at the Seminole Hard Rock Casino in Florida (which seems to have more than its fair share of disputed jackpots), when he appeared to hit a mammoth $166 million prize. The maximum payout on the Ultimate Party Spin machine played by Seebeck was $99,000, and with his bet of only $1.50 at the time of the malfunction, a win could have generated a maximum payout of only $2,500, with the right combination. Determination of a malfunction was made by representatives of the machine's manufacturer and software provider, with confirmation from an independent third-party laboratory analysis, but in this case the casino opted to settle the matter for an undisclosed amount, again as a "good faith gesture."
• On March 27 of this year at Colorado's Fortune Valley Casino, Louise Chavez thought she'd hit a $42 million jackpot. The casino again cited a malfunction, explaining that the prize limit for Chavez's machine, which was posted in the casino, was listed at $251,000. At the time, the casino gave the player free breakfast, a room for the night, and a refund of the $20 that she put into the slot. No decision has yet been made as to whether she will receive additional prize money.

Evidently, there are numerous possible outcomes when a machine is perceived to malfunction, depending on what jurisdiction you're in, how the casino handles the matter, and lots of other possible factors. Hence, it could take an eternity to answer your questions comprehensively nationwide, so we stuck with the state of Nevada and, as mentioned above, placed a call to the Chief.

First off, if you look at any slot machine, it will almost certainly bear a disclaimer telling you that a malfunction voids all payouts. If you click here, the link will take you to the page on the Nevada State Gaming Control Board website that explains what constitutes a "malfunction," the different scenarios that might cause one to occur, and what it means when that happens here. Point 3 relates how previously, manufacturers would often set the "default" on a slot machine to be the top symbol alignment, which would mean that if a malfunction occurred, the player would see an apparent jackpot hit, momentarily, before the reels would slowly start spinning agin. The default position indicates that a malfunction has already occurred, and hence, any subsquent play no longer counts. Gaming Control understood how confusing this might be to the player and so these days, machines are generally no longer set up to default to their maximum payout position once a problem has occurred.

How often do disputed jackpots arise? In 2009, we were told that in the state of Nevada alone there were some 800+ incidents, of which 9% were ruled in favor of the player, to the combined tune of over $122,000 that the casinos had to pay out. In Nevada, if the dispute involves the sum of $500 or less and cannot be resolved between the player and the casino, the onus is on the player to contact Gaming Control; if, however, the amount is larger than $500, then the casino must contact the GCB. In either instance, an agent will be assigned to investigate the case and, if necessary, the lab and the game manufacturer will also be involved before a decision is rendered.

While in most instances it either boils down to a mistake or an attempted scam on the part of the player (often relating to whether or not max. coin has been played), as you can see from the stats above, there are instances when the ruling goes in favor of the player and the casino is obliged to pay up.

In the course of researching this answer, we came across an interview in the now defunct Blackjack Forum with Las Vegas attorney Bob Nersesian, the top attorney representing advantage players and others claiming to have been wronged by casinos, who interestingly enough had this to say about how these scenarios are handled in Nevada:

"I have been very impressed with the Gaming Control Board itself and the Supreme Court on gaming issues. Those ... guys who make the big decisions. They are very judicious, both the Board, and the Supreme Court, about applying the law. You hear people say that they are rubber stamps for the casinos—not true. From what I can see, at the agent level, those guys seem to have a perspective that they're working for the casinos. However, the Supreme Court and the Gaming Control Board seem very guarded about their perspective, and that they are working for Nevada. That includes the taxpayers and the people who play in the casinos, as well as the properties.

"You might be familiar with another case I handled ... There was a programming error on a 50-cent video poker machine. A progressive jackpot for four of a kind, which would normally pay $250, instead paid $100,000. My client hit it. A Gaming agent, in a throwaway off-the-cuff opinion, effectively stated, 'There is no liability here on behalf of the casino. The patron loses.' The Gaming Control Board unanimously held that the casino had to pay. You see the distinction? The Board recognizes that the integrity of our system is reliant upon expectations being met. That sure was no rubber stamp decision for the casino."

More feedback: "I have a friend who went to an Oklahoma Casino recently and won a $20,000 jackpot on a slot machine. The casino said they could only pay her $12,000 of the $20,000 they owed her and she must come back in 5 to 7 business days to pick up the remaining $8,000. Well, she went back in 7 business days (without calling first) and the casino said that their computer system was down. 3 weeks later she was contacted by the casino and was told her money was ready. I have never heard of a casino not giving you all of your jackpot and just wanted to run this scenario by your staff and see if this was legitimate... Can a casino retain a portion of your jackpot without an explanation as to why they are doing this? (This was Winstar World Casino, by the way.)" [Ed: We'd need more details to answer this, but based on the facts you relate no, a casino could not do this legitimately in Nevada, for example, where they must have on hand sufficient cash funds to pay out any jackpot hit that they're responsible for (i.e., that isn't a 3rd party linked progressive like Megabucks, for example, when manufacturer IGT is responsible for handing over the check). From the way you relate the story, it sounds like the casino didn't have the cash to cover your friend's winnings, which would land them in serious hot water with the Gaming Control Board in Nevada. However, Winstar World is a Tribal property owned and operated by the Chickasaw Nation and, as such, is possibly less well regulated and run according to its own rules...] A reader writes: "In reference to the man who hit the big jackpot at the Seminole hard rock casino in Florida, there was a lot of bad publicity in the local news about their failure to pay the jackpot. In the few weeks that followed, the casino saw a large decline in people who decided not to gamble at a casino that doesnt pay on large jackpots. The casino decided it was a better marketing decision to pay off the jackpot and have all their loyal customers return. They paid the jackpot and the casino saw all their old customers return and a bunch of new customers began to frequent the casino."