Russian Hackers Cheat on Florida Casinos Slot Machines

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Aristocrat brand slot machines at the Magic City Casino in Miami. Roberto Koltun - CTN News

If you see a guy wandering the aisles of South Florida casinos, pointing his cell phone at slot machines, do not bother offering to help him. Most likely he is not a clumsy tourist, but a cheater, who is using his phone to exploit a security gap that, according to some estimates, has cost US casinos millions of dollars in losses in Slot machines.

The scheme to rip off slot machines was designed by today’s favorite villains, Russian hackers – including, supposedly, one from Hallandale – who got a used machine and disassembled it to investigate the mathematical process behind their fat awards.

They then sent players to US casinos and used cell phones to alert them to the exact moment they had to press the “spin” button on the slot machine to win.

The result is what security experts regard as the most lucrative pitfall plan ever conceived against the slot machine industry – an industry of more than $ 70 billion – a scheme of pitfalls that could be very difficult to stop.

“This is a very serious concern,” said John Grochowski, author of seven books on gambling, including one on slot machines. “The tradition of cheating on slot machines dates back a long time. Manufacturers and casino owners do everything they can to promote safety, and computerized machines are not as vulnerable as the old ones, which were mechanical.

“But if someone studies the internal mechanisms of a slot machine, then things happen.”

Although the gang of slot machine piracy was uncovered in 2014, when the FBI arrested four Russians and accused them of cheating in casinos in Missouri, California and Illinois, the details of their scheme only began to leak this Spring, at security conferences of the gaming industry across the country.

Paradoxically, they are rooted in Vladimir Putin’s decision in 2009 to eradicate casinos in Russia. That left the casino owners with thousands of useless slot machines, which began selling at bargain prices to anyone who asked for them. Inevitably, some of them fell into the hands of gang members who opened them to see if there was any way to cheat.

Computer chips and video monitors have replaced mechanical gears and glass windows, but slot machines continue to function in much the same way they always have: the player presses the spin button, and then looks at a lot of numbers and symbols on the screen. Where they stand – as well as the row of three cherries in the days of old – determines what the prize is, and how much it is.

The biggest difference is that cherries and oranges are no longer printed on wooden casters. They are video images generated by computer chips randomized, or almost random, which is the key of the problem.

“Computers do not actually do things at random,” said John Robison, author of “The Slot Expert’s Guide to Playing Slots.” “When you ask a computer to add two more, you want the answer to always be four, not three or five. Computers do not do anything at random.”

Instead, they use something called ‘pseudorandom number generator’, which starts with a small collection of numbers – in the old days of computers, was often something as simple as time and date – and manipulates them to turn them into sequences of seemingly endless numbers, so long that they seem random, but they are not.

“The reason we call them ‘pseudo’ is that, if you look at the sequences of numbers they generate, they satisfy many of the qualities of randomness,” Robison explained. “But, after all, there are always patterns. It may be two billion times before the pattern is repeated, but it is going to repeat itself.”

After making many calculations, the Russians developed a computer program to detect these patterns and take advantage of the most favorable machines. (Slot machine chips continually generate those sequences of numbers, whether or not they are spinning the wheels, so the key to success is to push the button just before a winning combination is about to arrive.) And they designed a Ingenious system to link their computers in St. Petersburg with their private soldiers in American casinos.

A Russian player played on a slot machine about two dozen times and transmitted the results to St. Petersburg for analysis. St. Petersburg soon began to respond by means of a specially designed telephone application which rang the player’s cell phone a quarter of a second before the moment when he had to press the button on the slot machine.

“It was as if the player had a little genie sitting on his shoulder saying, ‘Still … still … still … NOW!'” Said Robison. “That did not always work, the player may hit the button too soon, or too late, you may lose the opportunity for fractions of a second, but it worked often enough to earn you a lot of money.”

The earliest examples of apparent traps were reported in 2011 in Europe, where some slot machines made by Austrian manufacturer Novomatic began to release fat bonuses with suspicious regularity. But no one understood exactly why it was happening until 2014 when the State of Missouri Gaming Commission noticed a similarly generous series of prizes from a line of slot machines called Mark VI made by the Austrian company Aristocrat.

In reviewing the security videos, Missouri casinos soon detected a strange phenomenon: men playing at Mark VI slot machines holding their cell phones by the machines. The FBI managed to identify one of them and follow it, which allowed finding more accomplices. On December 10, 2014, the FBI arrested three men from Moscow: Murat Bliev, who was then 36; Igor Lavrenov, 28, and Ivan Gudalov, 32.

The fourth man arrested, Yevgeniy Nazarov, 38, lived in Hallandale with his wife and two children. Born in Kazakhstan, according to court documents, he became a US legal resident in 2012 but had been in Russia less than a month before his arrest. Nazarov’s wife told the FBI that he worked as a chauffeur at a South Florida touring service, and had traveled to Russia to finish his plans to open his own tour company. (Two of the other men, Gudalov and Lavrenov, had come from Moscow to Miami at about the same time as Nazarov, according to the FBI.)

The three men of Moscow finally reached extrajudicial agreements for two years of jail time each. The charges against Nazarov, however, were withdrawn, and even before that his bail was set at $ 25,000, an astonishingly low amount for an accused who a few weeks before his arrest had visited a country that lacks extradition treaties with U.S.

The current whereabouts of Nazarov is a mystery. Broward County court documents show that your landlord filed a lawsuit to evict you from your rental apartment in a South Ocean Drive skyscraper in Hallandale in December. The building managers claim that he left “a couple of months ago” and they do not know where.

However, many believe Nazarov is cooperating with an ongoing FBI investigation into the trap plan (ongoing, because the traps continue). Recent arrests of Russian slot machine pirates in Singapore and Peru appear to confirm suspicion by industry security experts that the FBI only disarmed a tiny part of those operations.

The apparent involvement of a South Florida man in a gigantic international gaming conspiracy raises an obvious question: were the cheaters working in Florida casinos? The answer is that, if they were, they were not captured.

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