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Men still face a single count of wire fraud for exploiting bug in the machines

Following an outburst of public outcry over a pair of men facing up to five years in federal prison for "exceeding authorized use" and exploiting a bug in video poker casino machines to win big, the two charged counts under the Computer Fraud and Abuse Act of 1986 (18 USC § 1030) have been dropped.

U.S. District Court for the District of Nevada by Federal Judge Miranda Du cited a recent Ninth Circuit Court of Appeals ruling [PDF], which sought to more strictly confine the ambiguous wording of the CFAA to prevent abuse.  She demanded prosecutors to justify their use under the 9th Circuit's Nosal ruling; federal prosecutors were unable to so they dropped the CFAA charges against co-defendants John Kane, 54, and Andre Nestor, 41.

Assistant U.S. Attorney Michael Chu wrote in a court order [PDF] obtained by Wired, "The United States of America, by and through the undersigned attorneys, hereby moves this Court to dismiss Counts 2 and 3 of the Indictment."

Prosecutors had argued previously that the sequence of buttons needed to activate the programming error constituted "hacking".  But they were unable to defend that opinion in the face of the recent regional scale-back of the CFAA, when defense lawyers argued that the co-defendants were simply playing by the rules of the machine (rules which were broken).

Game King
The pair used their trick on the Game King multi-game machine. [Image Source: IGT]

That leaves a single count of wire fraud against each man.  The wire fraud charges (18 U.S.C. § 1343) are built on the premise that the defendants used phone conversations to plan to defraud the plaintiffs (the casinos), a federal offense.  Of course, given that the feds couldn't even make the accusation that they "hacked" (a form of fraud) stick, the fraud-based claim seems pretty questionable.

Mr. Kane's counsel -- Andrew Leavitt, a veteran LV lawyer -- comments, "The case never should have been filed under the CFAA, it should have been just a straight wire fraud case. And I'm not sure its even a wire fraud. I guess we'll find out when we go to trial.'"

In a previous interview he had stated, "They’re going to have real tough time with the wire fraud.  I never really understood why the federal government took this case in the first place."

Now with one victory in hand he looks to beat back this final federal charge.

Source: U.S. District Court for the District of Nevada via Wired [PDF]



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Still smells like theft
By kaborka on 5/8/2013 12:23:39 PM , Rating: 2
Sorry, what they did was wrong. You can rail about big corporations owning the government, but if you discover a code that is guaranteed to take money from the machine, it's still theft. What if it was an ATM?




RE: Still smells like theft
By jeepga on 5/8/2013 1:57:12 PM , Rating: 2
I agree. However, in my opinion it's civil and not criminal. I don't see it as any different than if you discover holding down a button on a snack vending machine keeps dropping snacks.


RE: Still smells like theft
By zoomer4321 on 5/8/2013 7:01:14 PM , Rating: 2
Thank you. We seem to be in the minority because a big corporation is involved.
I wonder how people would feel if it was a bug in an ATM and someone figured out that pressing the # key at a certain time deducted the money from another's account such as from the people that don't think this is stealing. After all, it would be within the "rules" of the ATM, right?


RE: Still smells like theft
By zoomer4321 on 5/8/2013 7:09:01 PM , Rating: 2
BTW the "rules", the real rules are posted and are described as chance of winning and the payout of each combination. By using this exploit, you are changing the probability and therefore violating the rules. That is what makes it stealing. The bug in the software and it's use is theft. Just like it would be if a bug DIDN'T payout at the rate posted netting the casino more.
Most would say that is stealing but if it is coded in like this exploit, how can you say benefiting the casino is stealing and benefiting the player and the player using the exploit isn't stealing?


RE: Still smells like theft
By ironargonaut on 5/8/2013 8:32:58 PM , Rating: 3
its coded into the machine to take in more money then it gives out while giving the user the impression that the game is actually a game of chance. Take video poker for example, you get four spades and you draw another virtual "card"; odds in real poker are slightly less then one in four you will get a flush and win. However, the odds in video poker are not slightly less then 1in4. The machine is programmed to display a spade based on a predetermined algorithm. I would proffer the game presents 4 of a suite at a higher rate than statistically likely.
Therefore, the game is programmed to defraud the user. Have the casino's been charged?
With an ATM it is common knowledge it should give you the amount you requested from your account. If a cashier gives you more change and you notice it, but don't return it, it is theft, same with an ATM. Plus, I am sure somewhere in your card agreement it also says you must return any mistakes.
The funny thing about odds is they are just that, odds. My question is did the machine adjust and then payout less money to other people, thus the casino still made the same money? So, it could be argued that one person got lucky and another unlucky.
Also, basically what the feds are saying is if you create/find a system that wins you money in Vegas you are a crook, because the house is supposed to win. And, if intent is the measure then every gambler who thinks they have a system to beat the odds are really crooks.
Morally, however, they new they had an unfair advantage and were exploiting it. Two wrongs don't make a right. But two wrights make a plane. :)


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