Gaming Fraud and Related Crimes in New York

What is fraudulent gaming?

Fraudulent gaming is where an individual uses methods that violate the rules of a casino in order to obtain a benefit. This applies to devices meant to interfere with the gambling machine’s workings, counterfeit gambling items, and the possession of any device that could further fraudulent gaming.

Examples

Here are some ways that will be considered fraudulent gaming.

An individual uses an app on their smartphone that predicts slot machine rolls.
A person uses counterfeit gambling chips or tokens.
A person uses a device that counts cards.
A person cheats at blackjack with cards on his person that he introduces through sleight of hand.
Owner of loaded dice within a casino.
A person manufactures fake casino tokens and markets them under the tagline “Casinos won’t know they aren’t real!”
Attempting any of these actions.

This list is not exhaustive. There are many practices that would be considered fraudulent gaming. Essentially, it will most likely be considered fraudulent gaming if an individual uses any means to create an unfair advantage in a casino game for themselves or another person.

If you or a loved one has been charged with a crime involving fraudulent gaming, please call our offices today. Our attorneys have the proper skills and experience to represent your interests best.

What are New York’s laws that address fraudulent gaming?

There are quite a few different laws that New York has enacted to criminalize certain practices. Most of these laws revolve around the use, manufacture, or possession of prohibited items. There is also a significant amount of overlap with the laws, which means that a person could be charged with multiple offenses for a single action.

Gaming fraud in the second degree

If a person alters a game in any way that is in violation of the casino’s rules such as changing wagers, increasing or decreasing odds, etc. for the specific purpose to defraud the casino, it will be gaming fraud in the second degree. Also, it is gaming fraud in the second degree if a person receives a benefit from the casino without a proper wager that was to preclude such a benefit.

For example, Tamara is a blackjack hostess for a major casino. Tamara’s boyfriend is Kevin. Kevin visits Tamara’s blackjack table, and Tamara uses complicated hand signals to alert Kevin of when he should “hit or stay.” Tamara also adjusts the wagers by Kevin to provide the largest winnings. Kevin and Tamara have both committed gaming fraud in the second degree.

This is a class A misdemeanor. The penalties associated with this are a maximum fine of 1,000 dollars and up to one year in jail.

Gaming fraud in the first degree

If a person meets the elements of gaming fraud in the second degree and the benefit exceeds 1,000 dollars, it will be considered gaming fraud in the first degree. Also, if the person had been convicted of any offense that involved gaming fraud in the last five years, it will be considered gaming fraud in the first degree.

For example, in the example above, if the amount won from the unlawful practices from Tamara and Kevin exceeded 1,000 dollars, Tamara and Jeff would have committed gaming fraud in the first degree.

This is a class E felony. The penalties associated with this are a maximum fine of 5,000 dollars, or twice the amount gained from the crime, and up to 4 years in prison.

Use of counterfeit, unapproved or unlawful wagering instruments

If a person uses items that are meant to mimic a gaming authority’s approved items, suchhttp://ypdcrime.com/penal.law/article225.htm#p225.65 as tokens or vouchers, and uses them to participate in casino activities, it will be considered the use of counterfeit, unapproved, or unlawful wagering instruments.

For example, Brad buys a box of tokens that look nearly identical to the approved tokens of a local casino. Brad takes these casino tokens and uses them at a few of the casino’s slot machines. Brad has committed the use of counterfeit, unapproved, or unlawful wagering instruments.

This is a class A misdemeanor. The penalties associated with this are a maximum fine of 1,000 dollars and up to one year in jail.

Manipulation of gaming outcomes at an authorized gaming establishment

A person commits manipulation of gaming outcomes if that person:

alters the game of chance by implementing or being allowed to use gambling items that are meant to deceive or change the outcome of the game;
allows or implements materially altered gambling devices;
allows or implements non-casino approved gambling items;
or alters the outcome of the game after the outcome is assured before other players know of the outcome.

A gambling item could be cards, dice, etc.

For example, Bianca is a master of sleight of hand. She brings in a pair of loaded dice into a local casino. She plays a game of craps, and after a few rolls of the casino’s device, she uses her sleight-of-hand techniques to introduce her loaded dice. Bianca has committed manipulation of gaming outcomes at an authorized gaming establishment.

For a first offense or an offense that occurs after five years of a previous offense, it is a class A misdemeanor. If a person has been convicted in the last five years of this specific crime, it will be a class E felony.

A class A misdemeanor could result in a fine up to 1,000 dollars and a year in jail; whereas, the penalties for a class E felony are a maximum fine of 5,000 dollars, or double the amount gained from the crime, and/or up to 4 years in prison.

Use of unlawful gaming property

This law is the most straightforward and simple of fraudulent gaming laws. If a person uses unlawful gaming property at a casino, it will be considered the use of unlawful gaming property. Unlawful gaming property is any item or device that is prohibited by the casino that alters the game of chance.

For example, Kaden creates a mathematical algorithm that can closely predict the cards that are drawn in various games. Since he can’t compute the complex variables quick enough, he creates an app on his phone.

The casino prohibits the use of any application that will help a player increase their odds of winning. Kaden takes his phone into the casino and uses the app to help him win at various card games. Kaden has committed the use of unlawful gaming property.

This is a class E felony. The penalties associated with this are a maximum fine of 5,000 dollars, or twice the amount gained from the crime, and up to 4 years in prison.

Unlawful manufacture, sale, distribution, marking, altering or modification of equipment and devices associated with gaming

If a person does the following:

Manufactures
sells, or
distributes any items that mimic gambling items in a casino for the purpose that those items will be used in a casino, or
reasonably should have known that those items would be used in a casino, it will be considered unlawful manufacture, sale, distribution, marking, altering, or modification of equipment and devices associated with gambling.

Also, this criminalizes any altering or tampering with approved casino gambling items.

For example, Brett is a casino employee. He is to take decommissioned gambling items out of the casino and distribute them to a variety of retailers. Brett notices that the new dice boxes and the decommissioned boxes are identical.

He takes one of the new dice boxes, alters them to become loaded dice and sells them to individuals who want to “win it big.” Brett has committed the unlawful manufacture, sale distribution, marking, altering, or modification of equipment and devices associated with gaming.

Possession of unlawful gaming property in the third degree

If a person has in their possession casino-prohibited items that they inntend to use to commit gaming fraud on casino grounds, it will be considered possession of unlawful gaming property in the third degree.

For example, Tori has a small electronic device that alters the payout of slot machines. She walks into the casino with this electronic device in her pocket, hoping to use it at the slot machines. Tori has committed possession of unlawful gaming property in the third degree.

This is a class A misdemeanor. The penalties associated with this are a maximum fine of 1,000 dollars and up to one year in jail.

Possession of unlawful gaming property in the second degree

This law can be violated in a few ways.

A person sells casino-prohibited items (valued over 300 dollars) to be used for illegal purposes while on casino property.
A person commits possession of unlawful gaming property in the third degree, and its value is over 500 dollars.
A person has been convicted of any offense that involved possession of unlawful gaming property in the last five years.

For example, Carl is a very skilled craftsman. He is able to construct casino chips that seem to be identical to the chips used by a local casino. Carl decides to use the chips the next time he goes to the casino. The value of the chips is 600 hundred dollars. Carl has committed possession of unlawful gaming property in the second degree.

Possession of unlawful gaming property in the first degree

This law can be violated in two ways.

A person commits possession of unlawful gaming property in the third degree, and the value of the unlawful gaming property exceeds 1,000 dollars.
A person has been convicted in the last five years of any offense that includes possession of unlawful gaming property and then commits possession of unlawful gaming property in the second degree.

For example, Lucy walks into a casino with a backpack that is full of counterfeit tokens. The value of the tokens is 10,000 dollars. She intends to use them on the slot machines to see if they will work. Lucy has committed possession of unlawful gaming property in the first degree.

This is a class D felony. The penalties associated with this are up to 7 years in prison and a maximum fine of 5,000 dollars or double the amount gained from the crime.

Unlawfully using slugs in the second degree

A person who uses a slug (an item that mimics a coin or token)¹⁴ in a coin machine with the intent to defraud the owner has committed unlawfully using slugs in the second degree. Also, if a person manufactures, sells, or gives away slugs for another person to use them fraudulently, it is considered unlawfully using slugs in the second degree.

For example, Wilson is able to craft items that are similar to quarters in shape and size. He manufactures a few of these slugs and deposits them into a casino’s quarter slot machine. Wilson has committed using slugs in the second degree.

This is a class A misdemeanor. Penalties for this are up to one year in jail and a maximum fine of 1,000 dollars.

Unlawfully using slugs in the first degree

If a person creates, sells, or possesses slugs to be used fraudulently in coin machines, and the value of the slugs exceeds 100 hundred dollars, it will be considered unlawfully using slugs in the first degree.

For example, Lori pays Carl 10 dollars for slugs that mimic the casino’s tokens. The value of the slugs is 250 dollars. She enters the casino with the slugs and intends to use them at the slot machines. Lori and Carl have both committed unlawfully using slugs in the first degree.

This is a class E felony. The penalties for this can be a maximum fine of 5,000 dollars, or double the amount gained from the crime, and/or up to 4 years in prison.

There are a variety of laws that address fraudulent gaming. Depending on the circumstances, an individual may be facing multiple charges for a single action. The penalties for fraudulent gaming could have up to 7 years in prison, a 5,000 -dollar fine, and/or double the amount gained from the crime.

Are there similar laws to fraudulent gaming?

There are quite a few laws that are similar to fraudulent gaming, and individuals may be charged with a variety of offenses for a single action. The crimes of grand larceny and scheme to defraud can accompany a charge of fraudulent gaming, depending on the circumstances.

Federal law also prevents frauds and swindles, and if the fraudulent activity crosses state lines or involves electronic transmissions, it could result in federal charges as well. Also, many casinos are on tribal land, and there are many tribal laws that address fraudulent gaming.

Are there any defenses to fraudulent gaming?

When an individual has been charged with fraudulent gaming, there are a variety of defenses that can be used. Many of the laws require that the person acted with the intent to defraud or that the items they possessed were intending to be used unlawfully.

Is it easy to prove that the items they possessed were used unlawfully?

This is difficult to prove unless a person admits that they were seeking to defraud the casino. Usually, to imply intent, investigators need to have sufficient evidence.

New York law creates an automatic presumption when it comes to unlawful gaming property. If a person has two or more pieces of unlawful gaming property, it is presumed that the person knew that those devices were meant to defraud.

Also, depending on how the casino or authorities investigated the crime, there may have been constitutional violations, such as unreasonable search and seizure.

If you have any questions about defenses to fraudulent gaming, you should give one of our law offices a call. Our attorneys will listen and help you understand what defenses are available to you.

Gaming law under New York State.

Fraudulent gaming law is fairly new to the state of New York. In 2013, New York allowed casinos to be established in the state, outside of tribal lands. These laws were also created at the same time.

The New York courts have not addressed many of the components of these laws; however, the Nevada courts have taken close looks at similar laws. This is due to Las Vegas being a major hub for gambling in the US and the world.

Here are some cases:

In Childs v. State, the Nevada Supreme Court found a gambling statute to be unconstitutionally vague.

The defendant, Timothy John Childs, had discovered that some slot machines could be artificially manipulated through various amounts of pressure and velocity in the handle of a slot machine. This was called “handle-popping.” Childs was discovered to be using this technique and was subsequently arrested and charged for “handle-popping.”

After Childs was convicted under this law, he challenged the law for being unconstitutionally vague, since it did not have well-defined parameters and a reasonable person would not know what was in violation or compliance of the law. The Court agreed.

The Court stated that since “handle-popping” lacked a clear definition in the law, and Childs did not damage the slot machine, the conviction will be reversed. The Court also commented that even if an individual has a criminal intent, they still need to commit a criminal act to be convicted of a crime.

To read the full opinion, please click here. Or copy and paste the link below.

https://www.leagle.com/decision/19931141864p2d27711141

In State v. Wilcox, the Nevada Supreme Court determined that an individual can be tried for conspiracy to cheat at gambling, even if that conspiracy was created in a different state.

The defendant, Ralph A. Wilcox, and a few other co-conspirators met up in Arizona and formulated a plan to cheat at gambling at casinos in Las Vegas.

After employing their scheme in Las Vegas, which Wilcox may or may not have participated, Wilcox was arrested. Wilcox asserted that since the conspiracy was hatched in Arizona and did not participate in any criminal activity in Nevada, he could only be prosecuted under Arizona law. The Court disagreed.

The court stated that if a person is being prosecuted for a conspiracy charge, it does not matter where the conspiracy started. If an individual conspires to cheat at gambling in a different state and the co-conspirators act in Nevada, then that individual can be prosecuted for conspiracy. The Court reinstated the conspiracy to cheat at gambling charges against Wilcox.

To read the opinion in full, please click here. Or copy and paste the link below.

https://www.leagle.com/decision/19891325776p2d54911321

In Moore v. State, the Nevada Supreme Court determined that is unconstitutionally permissible to be charged with lesser offenses if the lesser offense is an essential element to a charge of a greater offense.

The defendant, Ronald Moore, had used sleight of hand to substitute a card during a game of blackjack. He was subsequently arrested and charged with cheating at gambling and altering the outcome of a gambling game.

He was convicted of both charges. Moore stated that since cheating at gambling is an essential element to altering the outcome of a gambling game, he could not be charged with both offenses. The Court agreed.

The Court determined that if a person is charged with a lesser offense and that offense is an essential element to a greater offense, that person can only be charged with the greater offense, or the lesser, but not both.

The Court reversed Moore’s conviction of cheating at gambling and affirmed the conviction of altering the outcome of a gambling game.

To read the opinion in full, please click here. Or copy and paste the link below.

https://www.leagle.com/decision/19841970692p2d127811959

Who investigates allegations of fraudulent gaming?

If there is an activity that seems to be fraudulent going on in a casino, most, if not all casinos will investigate it internally and turn over the information to the state’s gaming commission. Depending on where the crime took place, and if it crossed state lines or involved electronic or wireless communications, it could involve New York’s Gaming Commission, the Indian Gaming Commission, and even the IRS Gaming Investigation team.

If I have been charged with fraudulent gaming, what should I do?

Call us!

Any charge of fraudulent gaming can have serious ramifications. Even if the charges are dropped or you are acquitted, it can still leave damaging consequences. It can affect careers, relationships, finances, and even future employment.

Also, many casinos will not allow individuals who have been charged with fraudulent gaming to enter their premises in the future. And a charge of fraudulent gaming can affect any casino patron. A guilty verdict could result in substantial fines and lengthy prison sentences.

This is why it is paramount that you have a skilled and experienced legal team to represent you. Our attorneys are very knowledgeable about the law and can help construct the best defense while allowing you to focus on other important matters. We seek to help you and will always represent what is in your best interest.

Call us for a free legal consultation today!

DOJ press release about fraudulent gaming

One of the founders of a criminal enterprise designed to cheat casinos was sentenced to 3 years in prison

Charge: Racketeering, conspiracy to steal money

Allegation: The founders employed many to apply a sophisticated cheating scheme to defraud casinos across the United States.

In 2012, Van Thu Tran was sentenced to 36 months in prison for her role in the cheating conspiracy and ordered to pay over 5 million dollars in restitution.

According to the DOJ press release, Tran helped found a criminal organization known as the Tran Organization. This organization employed individuals to play blackjack and baccarat games and bribe or otherwise encourage dealers to shuffle decks after cards had been counted falsely.

This scheme resulted in millions of dollars won through these games at casinos across the nation, including some on tribal lands. Many leaders and members of the organization have been arrested for their participation in this criminal enterprise. Some have received lengthy prison sentences and substantial fines.

To read the press release in full, please click here. Or copy and paste the link below.

https://www.justice.gov/opa/pr/co-founder-casino-cheating-criminal-enterprise-sentenced-36-months-prison-targeting-casinos

REFERENCES

1. http://ypdcrime.com/penal.law/article225.htm#p225.55

2. https://www.omh.ny.gov/omhweb/forensic/manual/html/chapter1.htm

3. http://ypdcrime.com/penal.law/article225.htm#p225.60

4. http://ypdcrime.com/penal.law/felony_sentences.htm

5. http://ypdcrime.com/penal.law/article225.htm#p225.65

6. http://ypdcrime.com/penal.law/article225.htm#p225.90

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