Taking Advantage of a Video Poker Glitch Can Land you in Jail in Nevada

by Ifrah PLLC
Contact

Imagine a poker player who played an extraordinary amount of video poker and in doing so discovered a software bug that would allow him to achieve significant payouts through a series of unusual moves. These moves would actually manipulate in his favor the games he played and the amount he wagered on those games, but involved nothing more than deciding to play the game in a particular manner, and not anything involving tampering with the video poker machine or its programming. Now imagine being named in a federal indictment for computer fraud because of this seemingly innocent conduct. This is the story currently unfolding in a closely watched case in the U.S. District Court for the District of Nevada.

John Kane and Andre Nestor were each charged in an indictment in January 2011 with one count of conspiracy to commit wire fraud and one count of computer fraud in violation of the Computer Fraud and Abuse Act (CFAA), the same law that was used to prosecute Internet activist Aaron Swartz and Andrew Auernheimer. The CFAA was enacted in 1986 to protect computers that there was a compelling federal interest in protecting, such as computers owned by the federal government and certain financial institutions. The CFAA has been amended numerous times since it was enacted to cover a broader range of computer related activities, and there has been recent discussion on Capitol Hill of amending it further. The CFAA prohibits accessing a computer without proper authorization or it is used in a manner that exceeds the scope of authorized access. The law has faced steep criticism for being overly broad and allowing prosecutors wide discretion by allowing them to go so far as to charge individuals who have violated a website’s terms of service.

The indictment against Kane and Nestor alleges that they exploited an arcane bug in certain video poker machines to defraud casinos and win money to which they were not entitled and that their actions “exceeded their authorized access” on the machines in violation of the CFAA. As we see it, there is nothing illegal about pressing buttons on slot machines to change the amount of money you are betting or to switch games you are playing, but the prosecution alleged that doing this exceeded lawful access within the meaning of the CFAA. Fortunately for Kane and Nestor, the court agreed with the defendants that this was an example of prosecutorial overreaching and dismissed the CFAA count in the indictment on the ground that the statute did not encompass this innocent conduct.

Kane and Nestor would play video poker machines until they won, at which point a “double up” feature would become available for selection that would allow the player to insert more money and make larger bets. After more money is inserted, the game can be exited and the money value of the best changed to a value that will cause the targeted win to increase to whatever the player desired.

Most prosecutions for this type of fraud involve the use of magnets, or electrical shocks, or some external device, but what makes this case so unique is that this was a software flaw discovered by Kane. There was no external device or manipulation of the machine. The machines were played exactly the way they were intendedto be played and exactly the way the approved software allowed the machine to be played.The conspiracy to commit wire fraud charges are still pending against both Kane and Nestor. In July, the government and the defendants filed a stipulation to continue the trial dates, the ninth such request, which was granted by the court. The defendants are due back in court on November 25, 2013. The filing of the stipulations of continuance may mean that the defendants are cooperating in the investigation, or that they are otherwise attempting to resolve the case without a trial.

The dismissal of the CFAA charges in this case was, in our view, the correct result – a decision that will hopefully check the increasingly aggressive use of this statute by prosecutors to punish conduct that clearly does not fall with its proscriptions. This is a case that could have, and should have, been brought by the casino. There is no doubt that there is a proper place for criminal sanctions to punish and deter those who hack into computers and commit other types of wrongdoing by illegally gaining access to computers. But prosecutors must learn that the statute has its limits, and the courts must remain vigilant to protect those individuals whose conduct simply does not rise to the level of the crimes that the CFAA was designed to cover.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ifrah PLLC | Attorney Advertising

Written by:

Ifrah PLLC
Contact
more
less

Ifrah PLLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!