"...the odds in all our games favor the lottery."

March 6, 2015 7:19 AM

"It was the first step to uncovering what he says is a $134 million scam by the Oregon Lottery." Once upon a time, Oregon resident Justin Curzi was playing video poker on a Jacks or Better machine. He was playing draw poker, which allows you to discard cards. However, the game's "auto-hold" feature recommended that he discard a different card than he was considering--which he thought was terrible advice and would cut his chances of winning.

While auto-hold suggestions can be rejected at any time, they allow players to play faster because they don't have to stop and think.

After consulting his friend to see if this looked wrong to him too, Curzi whipped out his phone an took a picture of the screen and the machine's serial number. After testing another machine and having the same sort of thing happen, he e-mailed the Oregon Lottery to ask what was up with that. After getting no response after a month (shocker!), he wrote again.

"Marlene Meissner, a spokeswoman for the lottery, drafted a response. Auto-hold, she wrote, “is based on optimizing the player’s opportunity to win the best (highest prize) rather than simply increasing the odds of winning any prize.”
But, as Curzi later discovered, lottery officials guided Meissner to a different answer, so she revised her email before sending it. “In your case, the terminal did advise a strategy — granted not the only strategy — for you to have an opportunity to win with the cards you were dealt,” she said in her email to Curzi on Feb. 3.
In other words, the lottery was backing away from telling Curzi auto-hold offered the best option."

Naturally, when Curzi objected to this logic, he never heard back. He approached a lawyer he knew, who suggested doing a public records request. Six months and over $3000 spent later, he received the records....where he discovered that the Jacks or Better machines pay out three cents less than they should be for every dollar put into the machine. Adding that up, that comes to $1.3 million a year that players aren't getting in winnings. And of course, lottery officials knew about it. After creating a spreadsheet to figure it all out, he deduced that payouts were up to 5 percent lower on machines that used auto-hold than ones than didn't--which equaled $134 million.

By October, Curzi sent the lottery his findings and said he planned to sue unless players were reinbursed within 30 days...so of course that didn't happen. By the end of the year, Curzi filed a class-action lawsuit against the lottery in circuit court alleging fraud, which of course the lottery officials are denying. COINCIDENTALLY, the lottery is replacing all 12,000 video lottery terminals in the state, and phasing out the terminal that Jacks or Better was played on. Because it's unpopular with players. Uh-HUH.

Lottery and law experts say his chances of winning in court seem low, but will depend on what the lottery is telling the players and if they actually show intent to defraud.

posted by jenfullmoon (52 comments total)

Class action won't help him much, or anyone else either, even if they win. The end users will wind up getting checks for something like $12.17, while lead counsel will get millions of dollars in fees.
posted by holborne at 7:27 AM on March 6, 2015 [5 favorites]

God forbid the state should rip you off on a game designed to rip you off.

Sometimes I think that the great aim of American Society is to somehow collect 100% of revenues from the poor. Between lotteries, the endless ticky-tack municipal fees and tickets documented in recent Ferguson articles, and endless tax loopholes for those rich enough to have accountants... it's all so terribly shabby and sad.
posted by selfnoise at 7:31 AM on March 6, 2015 [28 favorites]

May the odds be ever in our favor.
posted by CheeseDigestsAll at 7:32 AM on March 6, 2015 [10 favorites]

God forbid the state should rip you off on a game designed to rip you off.

The idea that a game of chance run by the state should play fair is not unreasonable enough to justify this sort of sanctimony.
posted by mhoye at 7:40 AM on March 6, 2015 [78 favorites]

God forbid the state should rip you off on a game designed to rip you off.

I think if we replaced "the state" in this instance with "Ceasar's Palace", "Luxor", or whatever else, we'd all be feeling more pity for the gambler.
posted by Going To Maine at 7:41 AM on March 6, 2015 [3 favorites]

One of the things I don't like about Oregon is how big the lottery is here and how hard the state pushes it. They basically run Keno machines in bars 24/7 for addicted gamblers and alcoholics to lose all their money on while every town has huge billboards advertising it. It sucks.
posted by mathowie at 7:42 AM on March 6, 2015 [27 favorites]

Having actually worked for WMS Gaming (the maker of the machine in question), all I can say is "never attribute to malice that which you can attribute to stupidity".
posted by JoeZydeco at 7:44 AM on March 6, 2015 [28 favorites]

I think if we replaced "the state" in this instance with "Ceasar's Palace", "Luxor", or whatever else, we'd all be feeling more pity for the gambler.

I don't think I understand your point here - I'm reading this as "we expect better from Caesar's Palace than we do from our state government", which might be true but is still kind of horrible?
posted by mhoye at 7:44 AM on March 6, 2015

Sorry, I didn't mean to imply that I had contempt for the people gambling. Just that arguing over the fine print of how you are being screwed is the sort of normal craziness of America today... like arguing over the specific terms of PPO contracts when the entire system is a malignant mass of evil garbage. I think the guy is absolutely right to call this out but at the same time it makes my head hurt.

I think if we replaced "the state" in this instance with "Ceasar's Palace", "Luxor", or whatever else, we'd all be feeling more pity for the gambler.

Uh, no. Quite the opposite.
posted by selfnoise at 7:51 AM on March 6, 2015 [6 favorites]

What mathowie said: video poker is just pure sad from one end to the other.
posted by gottabefunky at 7:54 AM on March 6, 2015 [3 favorites]

Class action won't help him much, or anyone else either, even if they win. The end users will wind up getting checks for something like $12.17, while lead counsel will get millions of dollars in fees.

Class action is often used to force policy changes that are in the public interest (in this case, stopping the continued use of an 'unfair' advantage - qualified because the payouts on those machines are already unfair since they don't actually correlate to outcomes) even if the expected damages to individual members is slight. And the attorney fees sometimes seem unfair. But my brother's firm spent a couple years and millions of dollars speculatively to get a local sheriff's office from strip searching every person brought into the police station in custody (including, yes, traffic stops)
posted by 99_ at 8:02 AM on March 6, 2015 [13 favorites]

> Class action won't help him much, or anyone else either, even if they win. The end users will wind up getting checks for something like $12.17, while lead counsel will get millions of dollars in fees.

I got $1457.92 of the $20 million in the first settlement of the anti-poaching lawsuit. The next round, due to be approved in June is for $415 million. A drop in the bucket to the offenders, but more than a dinner out for me.

I've received tiny settlements for scratched mp3 players & the like, but harping on them is playing into the hands of reactionary tort-reformers who aren't looking for better victim compensation but a more "predictable" environment for business.
posted by morganw at 8:09 AM on March 6, 2015 [17 favorites]

I think if we replaced "the state" in this instance with "Ceasar's Palace", "Luxor", or whatever else, we'd all be feeling more pity for the gambler.

I don't think I understand your point here - I'm reading this as "we expect better from Caesar's Palace than we do from our state government", which might be true but is still kind of horrible?

Damn this internet sarcasm! I was trying to be critical of the notion that we shouldn't feel bad for the gambler, which is how I read the "god forbid..." comment. I imagined that, given the (common?) assumption that casinos are bad people, we'd be angrier at finding out they'd been doing something wrong, yet for some reason were apathetic about the state doing similar things. Really, we should be apathetic about neither.
posted by Going To Maine at 8:21 AM on March 6, 2015

Sometimes I think that the great aim of American Society is to somehow collect 100% of revenues from the poor.

America never fully renounced the culture and values of the Southern slave society, and due in part to the way party politics transformed in the 60's, those became politically united with big business and the market fundamentalism that burgeoned during the 70's and turned into institutionalized neoliberalism in the 80's, resulting in a sociopathic creed of vicious anti-egalitarianism extending along economic, social, cultural, racial, and nativist lines. I think that's one reason that it seems today as though the purpose of America is to bleed Americans dry for the benefit of a few super-wealthy coalitions.
posted by clockzero at 8:24 AM on March 6, 2015 [18 favorites]

The argument regarding the ethical payout from a state run lottery might have been avoided had the ethical considerations surrounding a state being the actual adminstrator of a lottery been fully considered with regard to the public welfare.

Did I type that?

Hahahahahahaha
posted by BlueHorse at 8:26 AM on March 6, 2015 [5 favorites]

Published video poker payout percentages assume perfect play. Anywhere except, apparently, Oregon, the basic assumption is that the player will get less than that payback. Also also, a royal flush is 3% of the total payback and occurs every 40000 hands or so under perfect play. All the other hands happen all the time by comparison. So if a machine has only been on the floor for a little while will tend to overhold by that amount.

This auto hold weirdness is probably coming from the fact that these were presumably custom jobs for OSL. I would bet OSL asked for it to produce a payback under perfect, but not too far under. Whether it was adequately disclaimed I don't know, but video poker has always been a (less than 100% payback, sure) strategy game. This auto hold as described seems to turn it into a janky slot machine.

So by industry standards whatever misconduct here, to my eyes, looks to be bad disclosure at worst. Disclaimer : former employee of WMS but not especially inclined to cut them slack.
posted by PMdixon at 8:27 AM on March 6, 2015 [2 favorites]

This was a good article, thanks for posting it.
posted by Tell Me No Lies at 8:31 AM on March 6, 2015 [4 favorites]

Anywhere except, apparently, Oregon, the basic assumption is that the player will get less than that payback

I don't see any arguments suggesting Oregon is different in the article. The payouts on the OSL machines were being compared to each other, not the theoretical yield, and the WMS machines stuck out like a sore thumb.

Is your argument that because people play sub-optimally it's okay that autohold does as well?
posted by Tell Me No Lies at 8:39 AM on March 6, 2015 [1 favorite]

I heard somewhere that "The lottery is a tax on people who can't do math".

But that seems a bit like victim shaming in this case.
posted by boilermonster at 8:40 AM on March 6, 2015

I totally do get the victim shaming angle, but the fact of the matter is that the lottery does end up operating as a regressive tax on people from lower socioeconomica strata (2) and on people who are vulnerable to gambling addiction.
posted by selfnoise at 8:45 AM on March 6, 2015 [2 favorites]

99_ and morganw, you're both right, of course. I'm jaded from a past life in which I defended securities class actions, which don't get me started (really, don't). But yes.
posted by holborne at 8:46 AM on March 6, 2015

The facts that:
A) This scam is being perpetrated within the context of a much larger, more brazen scam (the state lottery); and,
B) The scam may be a result of a combination of incompetence and passive consent rather than outright planned,
...are irrelevant. People have a right to their government and its officials working with diligence and honesty in all things, especially when it comes to raising and handling revenues. The very idea that OSL would look at the hold-recommendation discrepancy and the resulting major discrepancy in payouts is unconscionable. America needs more Curzis. If you're going to run a gambling operation it behooves you to ensure your statements of odds and payouts are accurate. The state was clearly "Skimming from the skim" here.
Also the recklessly huge records-request fees thing is a separate scandal also deserving of outrage.

Folks who respond to government malfeasance with a shrug and a "what do you expect" attitude really make me want to punch them in the eye.
posted by BigLankyBastard at 8:47 AM on March 6, 2015 [4 favorites]

I heard somewhere that "The lottery is a tax on people who can't do math".

We outright call it the Idiot Tax here in my household. Disclosure: buys Powerball tickets sometimes because, sometimes, all you really need in life is 500 million dollars.
posted by resurrexit at 8:49 AM on March 6, 2015 [6 favorites]

Gross. You're worse than Las Vegas Casinos...and those mofos have their own jails!
I'm pretty sure that Oregon has those too.
posted by plinth at 8:50 AM on March 6, 2015 [2 favorites]

I'm reminded of the design of New York Taxi credit card machines, the ones whose default options for tips are 20%, 25%, or 30%. You can also enter the more typical 15%ish if you're some cheapskate who bothers to push extra buttons. Of course few people do, and cab drivers get a big bonus.

More generally: Dark Patterns – user interfaces designed to trick people. I'm not sure in this instance I believe JoeZydeco's comment that this may just be stupidity on the part of the machine designer. Folks who design gambling machines should have a very fine appreciation of gambling odds. Also the machines were observed to be paying out less than theoretical; a fair state agency would try to figure out why and find the bug.
posted by Nelson at 9:03 AM on March 6, 2015 [7 favorites]

Class action won't help him much, or anyone else either, even if they win. The end users will wind up getting checks for something like $12.17, while lead counsel will get millions of dollars in fees.

it's funny how this kind of "concern troll" works. On the one hand, if the case is so hopeless that no one is going to even bother trying to file suit, you can solemnly intone to people that their only remedy is through the courts and we have to observe proper legal process (see Ferguson). If someone does file suit, then you can loudly pronounce that no one is going to benefit from a lawsuit except greedy trial lawyers.
posted by ennui.bz at 9:11 AM on March 6, 2015 [9 favorites]

Let me try this straightforwardly rather than sarcastically: This article is about gamblers, who like to gamble, getting a fair shake out of the gambling that they do. We gamblers do not consider it a scam, we consider it fair trade in entertainment value. Some people are addicted to gambling. Some other people are addicted to other things. Providing a fair and safe way to indulge should be the provenance of the government, and lotteries on the whole do it way more reliably than casinos. When they purposely go out of their way to deceive players into taking -EV actions, they are in fact cheating (or close enough to the edge to be cheating). If you ask the dealer whether to hit or not in blackjack, they give you their best advice. If they were directed to give you bad advice, EVEN if the casino thought it was correct-ish advice, that would be a colossal scam. That's what this guy discovered.

If your reaction to this article is "All gambling is a scam/tax on the stupid" then you either did not read it or don't think very deeply about human desire or probability or anything else and are just regurgitating the same nothing-comment that you say whenever gambling or the lottery comes up. Take it from a gambler then, we hear your disdain and it is insulting and discussion-ending.

RE: the actual article...this guy is a hero and should be named King of Oregon.
posted by Potomac Avenue at 9:15 AM on March 6, 2015 [20 favorites]

I believe JoeZydeco's comment that this may just be stupidity on the part of the machine designer.

But you believe that taxi credit card machines were created to give drivers a "big bonus" of an extra 5% tip? The cab drivers didn't write the software, and as a former driver I can attest that nobody beyond the driver in the taxi industry food chain cares if the drivers even get a tip, much less a whopping 5% extra.
posted by Ian A.T. at 9:16 AM on March 6, 2015

Never underestimate the power of one indignant person armed with an accurate spreadsheet.
posted by Mary Ellen Carter at 9:27 AM on March 6, 2015 [13 favorites]

What the fuck, Oregon State Lottery? Like the odds aren't already in your favor for every damn game? You need to increase those chances by scamming people even more.

I'll confess to occasionally buying a powerball or megamillions ticket maybe once a month, not because I am statistically illiterate, but because it juices daydreams of escape even for times when I don't buy one (I can dream things like "If I buy and then win" for the rest of the month but I have to occasionally buy in order to have any credibility with myself because I am a bastard that way). But I know it is statistically a huge longshot of winning anything significant. But what pisses me off is that the jackpots are deliberately deceptive because they are mutualized and the government knows that people don't read the fine print and realize the real immediate jackpot is actually only around 60% of the stated size (and that is before taxes).

So yeah Lotteries are government shiftiness at is most brazen They aren't even comfortable with odds massively in their favor.
posted by srboisvert at 9:38 AM on March 6, 2015 [1 favorite]

Providing a fair and safe way to indulge should be the provenance of the government, and lotteries on the whole do it way more reliably than casinos.

Your odds are generally far better at the casino than with any government lottery.
posted by srboisvert at 9:40 AM on March 6, 2015 [1 favorite]

The NY taxi situation is more complicated than I wanted to include in my initial comment. The default choices led to an increase in NY tips in most cases, and the details are fascinating. More recently we learned a specific detail in how tips are calculated led to even higher tips. In both cases the UI and software led to people tipping more than they used to. In one case it's almost certainly deliberate. And it is a "big bonus". If the average tip goes from 15% to 20%, that's a 33% increase in tip amount.

The NY taxi situation is different from the Oregon Lottery situation in agency. I'm not clear on the alignment of the machine designers and the eventual profiter from the machine's operation. My hazy memory is part of what drives the NY design was convincing taxi companies to accept the machines; it's certainly possible that "and your tips go up!" was one of the selling points. I don't know if WMS Gaming was explicitly telling Oregon Lottery "and hey, our software encourages chumps to make the wrong choice!". It could also have just been a dumb bug. If it was deliberate, the responsible people should be in jail.
posted by Nelson at 9:44 AM on March 6, 2015 [2 favorites]

The odds are supposed to be calculated and published. What a shitty way to treat citizens. The lottery itself is a con, and I'm not for it, but players have a right to expect accuracy.
posted by theora55 at 9:47 AM on March 6, 2015 [1 favorite]

An old man once told me that he trusted the mob's numbers games during the 1950s more than the modern state's Daily Number: The payouts were better (750 or 800 to 1, rather than the state's 500 to 1) and each day's winning numbers were verifiable by anybody (the smallest fractional-cents values of each day's Dow Industrial average, for example) rather than by accounting firms that the average citizen doesn't have direct access to.

One of the problems with state lotteries is that the lotteries are run by independent companies under contract to the state that regulates it, and revenue is based on a percentage of net income after payouts. Which puts each state in conflict with itself: The stricter its regulations, the less money it makes.

In Las Vegas, at least, the Gambling Commission is a body independent of the entities that provide the gambling entertainment. Setting aside arguments about how well that arrangement works, it at least starts from an uncompromised relationship.
posted by at by at 9:54 AM on March 6, 2015 [1 favorite]

They basically run Keno machines in bars 24/7 for addicted gamblers and alcoholics to lose all their money on while every town has huge billboards advertising it. It sucks.

Australian pubs and club are lousy with video poker machines (pokies). There's something like one poker machine per 116 Australians. In New South Wales, where they were legalised back in the 50s, it's one for every 77 people. The only state in the world that has more pokies than NSW is Nevada. It's estimated that about 41% of total Australian gambling revenue comes from problem gamblers, but most of the last attempt at reform at a federal level was abolished in 2014. In a strange coincidence, political donations by gambling industry groups surged after the Wilkie reform agreement was signed. It's a sad, depressing and predatory state of affairs.

And I wish I, wish I knew the right words
To make you feel better, walk out of this place
and defeat them in your secret battle
Show them you can be your own man again,
show them you can be your own man again

And I wish I, wish I knew the right words
to blow up the pokies and drag them away
'cause they're taking the food off your table
So they can say that the trains run on time

Another man there was made the trains run on time…

posted by zamboni at 9:55 AM on March 6, 2015 [4 favorites]

> This auto hold weirdness is probably coming from the fact that these were presumably custom jobs for OSL. I would bet OSL asked for it to produce a payback under perfect, but not too far under.

It’s reasonable to me that a gaming company could adjust the payback rates of their video poker machines just as they can adjust the payback rates of slot machines.

It would never occur to me that a gaming company would adjust the payback rate of a video poker machine not by, for instance, paying a slightly lower multiple on hands like full houses and straight flushes, but by cynical manipulation of a feature that already earns the machine owner more money by increasing the speed at which a player plays.

To analogize: on newer computerized slot machines, the reel-spinning effect is just a nicety, and it can typically be skipped by pressing the “spin” button again to jump straight to the outcome. That’s a machine allowing you to play faster if you like. The faster a player spins, the more money they’ll end up giving to the machine owner, on average.

But if pressing that button changed the outcome of the spin in a way that reduced payout percentages, that’d be outrageous. And if people knew that was so, they wouldn’t use the feature. People want to give you their money more quickly and you’re looking for a way to screw them over even further? Remind me never to lend WMS my goose that lays golden eggs.
posted by savetheclocktower at 9:57 AM on March 6, 2015 [4 favorites]

Regardless of the sensibility or morality of gambling, I don't see why it's controversial to say that the published odds should be the ACTUAL ODDS.
posted by KathrynT at 10:16 AM on March 6, 2015 [2 favorites]

I always tell NYC newbz it's better to pay cash for cabs. Round up the fare and add a couple bucks. Done and done. 20% my ass. Half the time they're taking you on a "joy ride" anyway or don't even know how to go without a GPS.
posted by ReeMonster at 10:34 AM on March 6, 2015

Your odds are generally far better at the casino than with any government lottery.

The state doesn't usually make you sit in a windowless room and get pretty women to serve you drinks as you play however.
posted by Potomac Avenue at 10:41 AM on March 6, 2015

This situation is akin to a given alcoholic drink having a greater ABV than it's published spec. It's sneaky, underhanded, and unnecessary.
posted by mosk at 11:06 AM on March 6, 2015 [1 favorite]

>>I heard somewhere that "The lottery is a tax on people who can't do math".
>We outright call it the Idiot Tax here in my household

Among my cohort we call it "meeting insurance", i.e. something to daydream about during meetings.
posted by Tell Me No Lies at 11:47 AM on March 6, 2015 [2 favorites]

Regardless of the sensibility or morality of gambling, I don't see why it's controversial to say that the published odds should be the ACTUAL ODDS.

I agree with this, although I think they should also publish a warning that the autohold feature does not play optimally as I think a reasonable person could assume that it would.
posted by Tell Me No Lies at 11:50 AM on March 6, 2015

In case this is getting lost; the claim isn't that the Oregon machines don't pay out the advertised odds. It's that if you follow the shortcut, the machine's recommended hold cards, then you suffer a reduced payout. You can still make your own choices and get the full advertised payout. It's just that the recommendations they give you (and every regular video poker player accepts) are not optimal. It's still shady, but it's not quite as fraudulent as a fully rigged machine where it's impossible to get the full payout.
posted by Nelson at 11:53 AM on March 6, 2015

The state doesn't usually make you sit in a windowless room and get pretty women to serve you drinks as you play however.

In Oregon, they do.

Game terminals are required to be hidden from view from outside the business, or where minors might see them, which generally means they're blocked off from the outside world or behind a curtain.
Also, you can't have them in any place that doesn't have a license to sell alcohol.
posted by madajb at 12:13 PM on March 6, 2015

It's funny how this kind of "concern troll" works...

Begging your pardon, but I would really appreciate if you wouldn't put words in my mouth. I have serious problems with the fee structure of class actions specifically, as they tend to underreward the actual injured parties while overrewarding their counsel. I said not a word about "greedy trial lawyers" (your phrase, not mine), nor did I suggest, implicitly or otherwise, that there was no point in legal process to redress grievances. The false dichotomies you attribute to me are in your mind, not my comment.
posted by holborne at 9:34 PM on March 6, 2015

Claw machines have been secretly rigged to automatically rip you off since there's been claw machines. There are operator-settable counters that say "this claw will be weak until $numberOfPlays, at which point it becomes a game of skill and then the counter resets on payout." Hilariously, the language in the instruction manuals for these machines is evasive and ambiguous, probably to avoid having them be regulated as gambling machines. These aren't just the ones with Chinese stuffed animals and plastic watches. There are iPads inside some of those fuckers.

Don't gamble. The only way to win here is to become the operator, at which point you're effectively conning people. The whole paradigm is awful and embarrassing.

And yeah, getting upset about this seems like a terrible waste of energy. Pointing out that it exists is very interesting and very relevant, but the levels of THIS IS SO VERY IMPORTANT GRAR GRAR seem high--almost like the bitterness of having lost a significant amount of money gambling.

You pays your money and you takes your chances, I tell you.
posted by ostranenie at 3:42 AM on March 7, 2015

Is your argument that because people play sub-optimally it's okay that autohold does as well?

I dunno, I think it's a dumb feature that if it actually gave me optimal strategy would reduce VP to a weird slot. I guarantee you (based on how these things work in general, not any inside knowledge of this game) that what it actually does is recommend cards according to a preset rubric that may or may not have to be in Help and Pay. (That is, there's an ordered list of pattern matches, and it selects the first one.) It is not doing the combinatorial analysis on the fly.

Bob Dancer: From 2010, so this is apparently how auto hold has always worked.

Regardless of the sensibility or morality of gambling, I don't see why it's controversial to say that the published odds should be the ACTUAL ODDS.

Which odds though in a game with strategic decisions? Best, average, worst? (I think I worked out once that it's possible to play badly enough to get 31% on 9/6 Jacks or better. I forget if that assumed you had to keep a dealt royal.)
posted by PMdixon at 7:29 AM on March 7, 2015 [1 favorite]

(Although what was not a dumb feature, in the WMS feature pack, was high contrast card designs and the option to auto sort by rank. I'm not at all a practiced VP player and I was able to bang through twenty hands a minute at my usual level of accuracy.)
posted by PMdixon at 7:55 AM on March 7, 2015

> Claw machines have been secretly rigged to automatically rip you off since there's been claw machines. There are operator-settable counters that say "this claw will be weak until $numberOfPlays, at which point it becomes a game of skill and then the counter resets on payout."

Due respect, but the whole reason why the claw machines want to avoid being regulated as gaming machines is that this sort of behavior is explicitly not allowed on gaming machines.

Slot machines, for instance, must be simple games of chance, and may not manipulate the odds of winning such that they pay out only when they haven't paid out in a while. Slots players sometimes impute these characteristics to machines, trying to find out which one is “due” to pay out, but all the machines do is generate a random number on every spin and correlate that to an outcome.

Video poker machines are even simpler, because everyone understands how draw poker works. The digitization doesn't change the mechanics of the game. If you discarded a three of clubs and it was replaced with another three of clubs, you’d know something was fishy.

(If slot machines and video poker machines weren’t regulated, it’s quite possible they’d function more like claw machines, but the beauty of the random number approach is that its simplicity makes the machine impossible to “game” unless there is a software bug. If the machines manipulated people in a way that was easy to discern, then the people would eventually figure out how to use that same pattern to manipulate the games themselves.)

But the point is that we’ve struck an accord: many governments have realized that gambling will always exist in some form, that prohibition only drove it underground. The government, by sanctioning gambling, gets its hands a little dirty, but in exchange ensures that the games are above-board and operate the way that they’re claimed to operate. When someone claims that a game of chance is not operating according to the rules, it’s not a helpful response to retort “What do you expect? Don’t gamble.” If that’s the attitude we’re going to adopt, we might as well let gambling go back underground.

People understand that casinos and gaming companies are not charitable organizations. I’ll play a slot machine if I’m on vacation in Vegas because I know how they work — I’ll probably lose money, but I have a fair shot at walking away with more money than when I started. But I wouldn’t play a claw machine because I know they’re fucking with me.
posted by savetheclocktower at 2:27 PM on March 7, 2015

PMdixon: This auto hold weirdness is probably coming from the fact that these were presumably custom jobs for OSL. I would bet OSL asked for it to produce a payback under perfect, but not too far under.

savetheclocktower: It would never occur to me that a gaming company would adjust the payback rate of a video poker machine not by, for instance, paying a slightly lower multiple on hands like full houses and straight flushes, but by cynical manipulation of a feature that already earns the machine owner more money by increasing the speed at which a player plays.

Nelson: In case this is getting lost; the claim isn't that the Oregon machines don't pay out the advertised odds. It's that if you follow the shortcut, the machine's recommended hold cards, then you suffer a reduced payout.

Right, ok, let me try to mix everyone's comments with some poker nerdery to try to explain why this type of machine setting matters. I'll start by noting that what I know of poker, I've picked up in the past year or two from the stats nerd in my house (who is definitely not me), so I can't guarantee what I'm about to say is perfectly right, but it should be along the right lines.

Poker is, internally, a game of odds. Given a hand, determine the odds of it being a buildable hand, of your building that winning hand, and of someone else having/building a better hand. Bet accordingly. This goes double for video poker, because it simplifies a game involving bluffing, other people, and moving bets into essentially a two-pull slot machine: you draw a poker hand, have the opportunity to keep as many of those cards as you wish, and then draw cards to replace the cards you returned, with the aim to make the "highest" possible hand. This means that video poker is a game of "pure" odds - for any given machine configuration, there is an objectively perfect way to play the game, statistically speaking. You want to balance the odds of winning anything against the odds of winning big. That's what we refer to when we talk about video poker odds assuming "perfect play": if, for any given hand, you make the statistically correct choices, then over time the machine will pay out whatever percent it claims to pay out. These odds are so quantifiable that you can actually print out reminder cards or cheat sheets of how to "perfect play" a game like Jacks or Better. If you don't play perfectly, the odds will be completely different and much less favorable to you.

Obviously, however, not everyone who bellies up to a video poker machine will have these odds and strategies memorized. For those people, the game will also give you prompts about what to hold. Assuming a fair-playing machine, those prompts should match what an experienced player would come up with via memorized odds or a cheat sheet; remember that there is a "perfect" standard for video poker play. Take, for instance, an initial draw consisting of:
-Queen of spades
-Jack of hearts
-8 of diamonds
-Ace of clubs
-2 of clubs

Now, you've got some options here as far as what to hold and what to discard when you re-draw. You know that in Jacks or Better, two of any card Jack or higher will pay out. So will a full house (two of one card, three of another), a flush (5 cards of the same suit), and a straight (5 cards that can be arranged in perfect numerical order). The highest-paying possible things you can win with this hand look to be four of a kind (as unlikely as it is, it's possible to draw another three queens, say) or a straight flush (using the 2-A of clubs). But you might also be able to make a pair, or two pairs, or a straight, or a full house, all of which pay out less than the fancier hands. So now you have to decide what to hold and what to throw back. Your first thought might be to hold out for the high-paying-but-unlikely straight flush, then you might think better of it and say, "well, high cards can win even as a pair, so with three high cards, I should keep all the high cards to max my chances of that!" But if you do that and hold three cards, you cut your odds of drawing any other winning hand: you can't get a full house because you no longer have enough draw slots to draw cards that would add up to 3-of-one-2-of-another, you've nixed any odds of drawing a straight flush on those clubs, and your odds of drawing two of a kind for a face card and getting a minimum payout are reduced because you're leaving fewer re-draw slots.

As it turns out, the "perfect play" option for a hand like that is actually to hold two cards: the Jack and the Queen. By doing this, you throw away your chance of a straight flush, but you keep a tiny chance of getting four of a kind, the larger possibility of a full house, the even larger possibility of a straight, or the much more likely possibility of two Jacks or two Queens, which will at least earn you back your bet.

Remember, machine payouts are based upon the assumption that you know all this and are playing accordingly. But what if you didn't know how to balance these odds mentally? What if you were just hitting buttons and treating it like a slot machine that gives hints, and taking the machine's advice for what to hold? And what if the machine told you to hold all three face cards? It would be mucking with its own odds by telling you to play in a way other than what its odds are based on. That's basically what was going on here: the machine was basing its odds on one thing and telling players to do another thing that reduced those odds. It was no longer a game of chance with definable odds, because the game (or the people who chose its settings) was running in a manner that manipulated the odds.
posted by Hold your seahorses at 4:16 PM on March 7, 2015 [1 favorite]

That's basically what was going on here: the machine was basing its odds on one thing and telling players to do another thing that reduced those odds. It was no longer a game of chance with definable odds, because the game (or the people who chose its settings) was running in a manner that manipulated the odds.

I will guarantee you that the manufacturer, OSL, and the regulators know to two decimal places what the payback of slavishly following the auto hold is.
posted by PMdixon at 9:46 PM on March 7, 2015

hal_c_on: "Class action lawsuits aren't about making the applying litigant rich...its about taking away $$ from the respondent."

Yeah, TFA explicitly mentions:

Curzi is aware some people might assume he’s suing to make money. He insists he’s not. “The real reason I’m doing this,” he says, “is because it’s outright wrong.”

posted by Chrysostom at 1:47 PM on March 18, 2015