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Jack L.B. Gohn: The house always wins – and often excludes

The casino industry is designed around the principle that every game is openly rigged in favor of the house. Some publicly acknowledged feature designed into each game assures the casino that, over a large number of wagers, the house will consistently win more than the bettor does. The casino industry relies on people’s strange willingness to accept these odds.

Of course, there is also an industry of those trying to play at better odds. Some merely seek what is known as an advantage, a feature of legitimate play that alters the odds: card counters at blackjack are the most widely known.

But true cheaters, commonly known as hustlers, do not abide by the rules of the game at all. They toss dice so that they won’t tumble, or alter the placement of chips after the roulette ball has fallen, or mark cards, or secretly league with the dealer to obtain information about hidden cards before the cards are turned. While casinos quite openly rig the game in their favor, hustlers counter-rig the game in secret.

The hustlers’ secrecy, naturally, makes it impossible to obtain accurate figures about the scale of what they do. If the hustle is successful, after all, the casino won’t even know it’s been taken, let alone generate statistics about the resulting loss. But even estimates are hard to obtain, and one senses that the casino industry is suppressing what information exists. Still, the potential impact seems to be huge.

There was a recent case in Connecticut, for instance, where a group of South Koreans used a card-switching device and beat the casino for $870,000. This appears to be the tip of a very large iceberg. As readers of the popular and extremely well-informed James Swain novels about casino hustlers know, casinos, for all their wealth, believe that cheats can literally bankrupt them. They do not view cheaters as mere annoyances or a cost of doing business – to casinos, cheaters are reportedly an existential threat.

To protect against that threat, the industry and gaming control commissions (which have a vested interest in the casinos’ success) spend millions of dollars to ensure the “integrity” of the games. Casinos notoriously keep “eyes in the sky” monitoring every hand, every roll of the dice, every action of the players and the dealers and croupiers. It may well be, though, that their most important weapon is exclusion: the ability to tell any member of the public that he or she is persona non grata, and to make that disinvitation stick throughout a chain of casinos, throughout all the casinos in a state, and/or throughout the entire industry.

Suspect territory

But that is where the casinos enter constitutionally suspect territory. While barriers to entry vary from state to state, in most jurisdictions the holders of gaming establishment licenses have received valuable and rare public authorizations to be in the business at all. There may have also been various kinds of public financial help, direct and indirect. For instance, in Baltimore there was an interesting revelation that the city’s one-and-only casino had obtained the city’s subsidy in the form of a detail of policemen (recently increased to 19 in number) who were diverted to work the casino and surroundings, which took them away other forms of service to the public.

Now assume that a citizen of Baltimore whose taxes helped pay for that detail, or a citizen of Maryland which gave that casino one of only six licenses in the state, is excluded. Typically the only “process” that citizen would receive would be a directive by management to leave, and, if the citizen failed to comply promptly or sought to return, the citizen would find himself given the bum’s rush by security or even, as I understand happened in at least one instance, by a Baltimore police officer whose salary he helps pay (and local law enforcement frequently assist in exclusions in other states).

The Maryland Lottery and Gaming Control Agency would not hold a hearing to determine whether the citizen had actually done anything wrong. There is no legal means by which that citizen could force the casino to readmit him. The casino is not required to have or articulate any reason, good, bad, or indifferent, to justify the exclusion of a taxpayer who helps make its existence possible.

The casinos’ public argument against any kind of due process for the excluded would be at least twofold: A casino is a place of public amusement, and places of public amusement are not like common carriers and are not required to admit all comers; and the taxpayer is benefitting by the hefty taxes the casinos pay in exchange for their right to exist – and that is all the taxpayer is entitled to in exchange for his share of support.

The first argument correctly articulates the law, but it is a law of dubious antecedents. In ancient common law, places of public amusement were required to admit all comers. This changed, where it did, largely in response to two forms of pressure: the desire of proprietors of places of public amusement to exclude racial minorities, and the desire of gambling venues to exclude perceived cheaters without being forced to go through the niceties of due process. One motive, then, has been flatly unconstitutional for the last 50 years, and the other was the (successful) wish to eliminate what had been a common-law right. Should a change in the law that came about solely to assist racial segregation and increase the profits of the very wealthy still stand?

The second argument seems to be politically sufficient for the time being, but its constitutional sufficiency depends entirely on the success of that first argument. Reinstate the ancient right of the public to enter a place of public amusement, and there would be a need for and a right to due process to protect it. No one’s individual right should be surrendered in exchange for tax bounty to the public.

Would cheaters win?

There is another argument the casinos are less willing to make publicly, but I suspect it is the real heart of the dispute. If a suspected cheater were able to demand a hearing, she might well prevail because the casino had acted on suspicion rather than proof. And card counters, whose actions are not illegal, might have to be tolerated, as they are in New Jersey. Accountability would certainly drive up the casinos’ costs, and could result in a lot of unprovable cheaters being able to demand admittance, which could render the casinos flatly unprofitable.

“Could” is the operative word. We have a public policy controversy here that we lack the facts to resolve with much confidence, because of the secrecy of the hustlers – and the secrecy of the casinos. We can’t know what the economic consequences of accountability might be. A state with the political will might be able to compel the development of better knowledge, but in the end a change would still be (pardon the obvious joke) a gamble.

Meanwhile, the excluded can take this faint comfort – they’re being kept out of a mug’s game. In case you haven’t heard, the house always wins.

Jack L.B. Gohn is a partner with Gohn, Hankey, Stichel and Berlage LLP. The views expressed here are solely his own. See a longer version, with links to his authorities, at www.thebigpictureandthecloseup.com.