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'You Can't Win'; Revel denies promised refunds to advantage players23 September 2013
Unfortunately for the $2.4 billion Atlantic City resort, which went through Chapter 11 bankruptcy earlier this year, the "You Can't Lose" promotion may turn out to be its biggest mistake yet.
The promotion offered gamblers a refund on cumulative losses between $100 and $100,000 for the month of July.
That seems pretty straightforward. But it's the fine print – and in some cases, the lack thereof – that's getting Revel in trouble.
Refunds come in the form of free slot play, given out in 5 percent chunks every week over a period of 20 weeks. And in order to claim your refund, you have to visit Revel each week to claim that piece of the refund.
At first glance, the promotion seemed to pay dividends for Revel, as its revenue from slots and table games was $23.4 million for the month, a 33 percent increase compared to last July.
But it's unclear how much of that money the casino will get to keep. New Jersey residents Megan Boyd and Rakeen Henderson are suing the casino in federal court, saying the promotion was deceiving.
A pretrial scheduling conference is set for Nov. 14, with an eventual class action hearing looming on the horizon.
And the lawsuits might keep on coming.
Casino City has learned that at least two other gamblers who travelled to Atlantic City for the express purpose of taking part in the promotion were told that they were no longer welcome to participate and that their losses – between $10,000 and $12,500 each – would not be refunded.
According to the two players involved, there may be many more gamblers with similar stories, but it's impossible to know just how many there are.
On July 15, Casino City submitted an Open Public Records Act (OPRA) request for all formal complaints made about the Revel promotion to the New Jersey Division of Gaming Enforcement (DGE). That request was denied 19 business days later on August 8.
DGE said it denied the request because it has a "legal obligation to keep certain records and/or information furnished to or obtained by the Division confidential."
We then asked Lisa Spengler, DGE's public information officer, how many complaints it had received regarding Revel's promotion. We were told to submit an OPRA request for that information, which we did on August 13. Eight days later, the DGE responded that OPRA is "not an 'information' law" and that the request was "overbroad and improper."
For those of you keeping score at home, that means DGE wouldn’t release the complaints because they were confidential. And they wouldn't release the number of complaints that had been filed because there wasn't a "record" that had the number of complaints listed on it.
So instead of filing an OPRA request, we once again asked Spengler directly for the number – and only the number – of complaints levied against the casino's "You Can't Lose" promotion.
"It would be misleading to give out a number of complaints filed against a casino," replied Spengler. "Complaints 'filed' are not always determined to be legitimate complaints."
True enough. But in the case of this Revel promotion, which focuses on misleading and deceptive advertising, the number of complaints would have shed some light on the amount of ill will generated by the Revel promotion.
"I don't understand why they don't [provide that information] if all you're asking for is numbers, not names," says gaming law expert I. Nelson Rose. "It sounds like the kind of thing they should give you. That's one of the minor worries here. All regulators tend to become too close to the regulated, because [those are] the only people they talk to."
Frank Catania, formerly the director of the DGE and now president and principal of Catania Gaming Consultants, disagrees.
"They are not protecting anybody's interests," says Catania. "The Division of Gaming Enforcement enforces whatever the applicable regulations are. Believe me, they do not favor anyone."
Casino City also submitted a request asking for copies of the complaints received with any information that could identify the complainant redacted. That request was denied as well.
Revel refused to comment on the promotion for this story.
While the DGE may not favor the casinos over the players, some have wondered what Revel's legal department was thinking when it allowed the promotion to get off the ground in the first place.
"Who is the lawyer that approved this?" asked Todd Muhlstock, the Baker Sanders attorney representing Boyd and Henderson. "What lawyer in their right mind wouldn't see this promotion and say 'We're going to get sued over this.'"
That's a question other gamblers feeling duped by Revel's promotion are starting to ask. Chris Jones and Greg Smith (players names have been changed to protect anonymity) went to Atlantic City intending to take full advantage of the promotion.
"Because the margins are so small, it's easy to overcome the house edge," Jones said. "When a casino says they're going to give you $100,000 for no reason, there's going to be a way to exploit that."
To be clear, Jones and Smith are advantage players. While they refused to provide complete details on the how they planned to beat the casino (there was most likely at least one more player involved), it doesn't take a Ph.D. in mathematics to figure out a way it could be done.
"This wasn't possible at Revel, but … imagine Revel had a big roulette machine where two people could sit down and each bet $100,000 on a single spin of the game, one on red and one on black," wrote Smith in an e-mail to Casino City. "Someone else would bet the $6,000 needed to hedge the zeros. The spin would go off, and in almost all situations one person would lose $100,000 and another would win $100,000. Revel refunds the $100,000 loss and the team profits $94,000.
"My method was very similar to the above situation, except it takes 80-100 hours instead of being instantaneous."
Neither Jones nor Smith would explain their exact plan to beat the casino, but they did reveal that they were playing Ultimate X video poker. The pair was betting big and both were down "five figures" on July 1. They returned to play again the next day, but found that their Revel Cards, which track player wins and losses, were inactive. Casino employees informed them that they were welcome to play, but they could not participate in the "You Can't Lose" promotion and their losses would not be refunded.
Ultimate X is a multi-hand video poker game with a multiplier. Hitting a pair of jacks or better on any hand gives the player a 2x multiplier the next hand. Two pair is worth a 3x multiplier while three of a kind results in a 4x multiplier. But the real fun begins when players hit straights (worth 8x), flushes (10x) and full houses (12x).
While the house has an edge in Ultimate X over the long haul (the game wouldn't be offered if that wasn't the case), when a player activates a big multiplier, the edge on the next hand goes to the player.
"If players are going to be kind of sneaky and overstate their losses, it is possible to play until you get a lot of multipliers," says Bob Dancer, a video poker expert who operates bobdancer.com. "Then the guy who's playing leaves the machine. Somebody else comes in, puts their card in, and now they're playing the game with an advantage."
Casino City ran a five-handed simulation of the game at videopoker.com, playing a total of 1,500 hands. In about 11 percent of those hands, the aggregate multiplier was 15x or more, meaning the payouts would be, on average, at least three times the standard pay table and the player would have a mathematical advantage on the game.
Imagine we had been working as a team, with one player on the machine for all low-expectation hands, and the other jumping on for all the high-expectation rounds. Here are the results, when the hands are split in such a way.
Player A (low expectation)
1,332 hands, $5,763 loss
Player B (high expectation)
162 hands, $2,803 profit
Add them up and you have a $2,960 loss. But Player A's tracked losses are $5,763, and he can claim free slot play on every last penny – or least he thinks he can. Assuming a 90 percent return on that $5,763, he would get $5,186 after playing through the free play.
-$2,950 loss on video poker in July
+$5,186 on free play (assuming 90 percent return)
+$2,236 total profit
It took Casino City about three hours to play 1,500 hands. And while it would require a time commitment to go back to Revel every week for 20 weeks to redeem all the free slot play, a team of two could likely earn at a rate of about $500-$600 an hour – and that doesn't even take into consideration that advantage gamblers are likely much better at video poker than we are.
Is this type of play disingenuous? Probably. Is it easy to spot in a facility with round-the-clock video surveillance? You bet. Is it against the rules? That's a harder question to answer. But none of the terms and conditions of the promotion provided by Revel to Casino City indicates team play was out of bounds.
"[Casinos don't] always figure out how somebody real sharp is going to take advantage [of a promotion]," says Rose, a California attorney and Whittier Law School professor who operates www.gamblingandthelaw.com. "Then, when it happens, they're always shocked and surprised and don't want to pay off. Well, it's a contract, it's a binding contract and they have to pay off. And if they don't pay off, let's say for some technicality, then they're going to get a reputation that they don't pay off. You not only have to beat them in a game of chance, you also have to beat them in court. And that's not a smart way to market your casino."
Jones and Smith say they weren't the only "sharps" who tried to take advantage of the promotion, only to have their promised refunds yanked out from underneath them. They filed a complaint with the DGE and found another gambler who had traveled from North Dakota to take advantage of the promotion making a similar complaint.
"If they saw that the casino was doing something wrong, they'd be on it," says Catania. "This is something that right now is between the casino and the player. The casinos do have rights."
But it might not stay between the casino and the players. Two months ago, Jones left a message with Revel's legal counsel, but has not heard back. On August 23, he received a letter from DGE stating that they had received the request and had asked Revel to contact him to resolve the situation within the next two weeks. He says he hasn't heard a word from Revel and plans to follow up with the DGE to ask them to intervene on his behalf.
"It's one thing if I went out to play Three-card Monte on the Boardwalk," says Jones. "But I don't expect to get hustled by a billion-dollar resort."
How advantage gamblers could beat Revel's "You Can't Lose" promotion
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