Auditing Player’s Club
and Promotions
Contact Information
Doug Parker
Compliance Division
Office: (405) 395-5106
Email: [email protected]
Warm Up
Which of the following would be considered a promotional
payout?
A. Giving a player $10 of “Birthday Bucks”
B. Awarding a patron a new four wheeler because they entered
a random drawing
C. A player earning a $30 gas voucher as a result of their play at
your casino
D. All of the above
Definitions
• Promotional Payout – merchandise or awards given to players
by the gaming operation based on wagering activity
• Player Tracking System - system or component of a
computerized casino accounting system used to record the
gaming play of individual customers
• Points - representative of value awarded to a customer based
upon specific criteria established by the gaming operation
• Complimentary Services and Items - Services and items
provided to a patron at the discretion of an agent on behalf of
the gaming operation or by a third party on behalf of the
gaming operation. Services and items may include, but are not
limited to, travel, lodging, food, beverages, or entertainment
expenses
Player Tracking Standards
• Player’s Club Vulnerabilities
• Player Point Fraud
• Names Changes
• Combining Accounts
• Point Adjustments
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Comp Fraud
Free Bonus Play Fraud
Hot Seat Promotion Fraud
Player Gift Fraud
Case Example
Former Casino Employee and Wife Sentenced to
Probation for Scheme to Embezzle Money from Casino
• Marketing Department
• $74,830.43
• Access to active and inactive player’s club accounts
• Added money and credits to the cards
• Gave loaded cards to wife
• She passed them out to others
• Split percentage of their winnings
• 2 years probation + $74,830.43 in restitution
MICS Checklist
Case Example
Arizona Pair Indicted in $25,000 Casino Scam
• Table Games
• $27,000
• Access to enter player rating value
• Prepared falsified player-rating cards in the name of his girlfriend
• Altered handwriting
• Used other employees’ numbers
• Ratings ranged from $220 to $970
• 50 instances added up to more than $20,000
MICS Checklist
Case Example
Former Tribal Casino Employee Charged in Federal Court
with Embezzlement
• Players Club Manager
• $13,326
• Access to create counterfeit players club cards
• Had others use the pre-loaded cards in the slot machines
• Approximately $17,400 fraudulently won
• If convicted, 5 years in federal prison and a fine up to $250,000
MICS Checklist
Case Example
Three Charged in Casino Fraud Case
Vice President of Player Development
Cocktail Server
Gambler
$478,100 in free slot play
• $418,793 in winnings
• Access to accounts and free bonus play
• Cocktail server collected player’s card numbers and PIN numbers
• Created duplicate cards
• Added free bonus play
• Split the winnings
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MICS Checklist
Case Example
Former Casino Employee Sentenced to 57 Months in
Prison for Stealing Players’ Card Information
• Database Manager
• $863,895
• Access to unused free play points
• Transferred the points to counterfeit players club cards
• Recruited people to play slots with the cards
• 57 months in prison & pay $863,895 in restitution
MICS Checklist
Case Example
Former Casino Worker Charged with Theft
• Player’s Club Host Supervisor
• $20,000
• Access to accounts and to issue cash vouchers
• Converted points into cash vouchers
• Cashed the vouchers
Promotion Standards
Case Example
Indictment Over Alleged Casino Scam on Tribal Grounds
• $64,000
• Pre-selected a winner for the drawing
• Told the winner when to expect their name to be called – they
had 3 minutes to claim the prize.
• Told the winner what number to pick on the prize board.
Numbers were from 1 to 13 and had prize amounts ranging from
$250 to $2,500.
MICS Checklist
Case Example
Former Employee of Newcastle Gaming Facility Pleads
Guilty to Embezzlement
• $17,500
• Helped security guards, family and friends win promotional
games that were intended for random drawing.
MICS Checklist
Case Example
Former Biloxi Casino Employee Charged with
Embezzlement
• $18,000
• Had access to promotional offers
Revenue Audit/Accounting
Standards
MICS Checklist
Risk Considerations
• Purpose of an Audit
• Protect the assets of the tribe
• Remain proactive against threats in the industry
• Meet established requirements
• Maintaining Control
• Points and promotions = Cash
• Involving other departments
• Marketing
• Accounting
• Planning and executing
Risk Management
• TICS and SICS
• Communication and Research
• Staff Interviews
• System Research
• Training
• Management training
• Staff training
• Audit training
Completing the Checklist
• Implementation
• Checklist vs. Analysis
• Make it meaningful
• Frequency
• Requirements
• Necessities
• Escalation
• Management considerations
• Follow up
• Retention
“Where there is value, there is
fraud, always!”
Gaming auditors who are aware of industry-specific risks can help head
off fraud by ensuring both preventive and detective controls are in place.
Questions and Comments
Email us at
[email protected]
for copy of materials
Visit us at booth # 1222