Sydney Casino Faces Major Losses Due to Faulty Machines

‘The house always wins’ is a popular saying associated with gambling that we have heard many times over. But when the house is at the mercy of machines, it is possible for it to lose, as Star Casino in Sydney, Australia, found out. And lose it did, unknowingly handing out AU$3.2 million in wins over weeks. This isn’t the only issue Star Casino has faced in recent times, in fact, they recently changed leadership amid regulatory scrutiny. This is just one of many problems at the casino.

The erroneous gifting of cash rewards happened thanks to a software glitch in the operation of 4 ATMS, also called the Ticket In Cash Out (TICO) machines. These machines allow players to redeem winnings on slots using bar-coded receipts; a player can redeem two tickets at a time. The software bug caused the machines to return one of the receipts to the player, who could then re-use it for extra cashouts.

Appearing before an independent inquiry committee set up to investigate this possible fraud, casino manager Nicholas Weeks said, “What occurred was small additional amounts of cash were being provided to customers in circumstances when they shouldn't have received it because of that defect," Weeks told the inquiry.

The ‘small’ amounts finally added up to a mammoth AU$3.2 million – or $2.05 million – being given away in just 13 days. Sounds too good to be true? Believe it, because the TICO machines can dispense up to AU$2,000 – or $1,290 – at a time to a customer.

Word of the casino's freebie spread quickly, and 43 people used the 4 TICO machines multiple times to fraudulently withdraw money as ‘winnings’.

The strange part in the entire episode: audits held between June 7, 2023, and July 24, 2023, had actually detected discrepancies in the output provided by the TICO machines. The glitch was spotted more than a month later.

The casino conducted an internal investigation into the matter; the findings suggested ‘numerous failures – human, process as well as technological – that more than likely prevented the fraud from being identified at an earlier opportunity. Weeks said.

In his words the failures were due to ‘cultural problem in parts of the casino in relation to the level of rigor through which controls are followed, the level of care in which work is conducted, and the desire from people in the business to drill down on things in circumstances where they don't appear that they are correct.’

Star Casino has had compliance issues with the authorities earlier as well; the independent inquiry into the TICO machine giveaway problem was identified. There had been earlier probes that had also ended up with uncertain results.

Some of the findings of the current investigation were startling. For instance, discrepancies were discovered in the facial recognition systems: They did not have visuals/images of people who hadn’t completed source of wealth checks, i.e. checks that helped detect the possibility of money-laundering operations. As a result, these people could still enter the casino and play for real money.

Another finding that rang alarm bells was the fact, learned through testimony during the course of the investigation, that casino analysts weren’t able to perform their jobs to the best of their ability as they did not have access to sufficient data points. The overall finding indicated that the casino operators were not fit to hold the license that they operated with.

The story has other dark sides to it as well – one of the 43 who were part of this illegal cashout scheme, Thanh Lan Le, is a recovering gambling addict who suffered a relapse after staying clean for eight months. After a friend’s boyfriend showed her how it was all going down, she visited the ATMs 34 times over the next 10 days, raking off a total of AU$57,265. She spent all but AU$5,000 of that total at the casino.

In fact, so caught up was she with the whole exercise that she actually fell asleep at the pokie machines twice. Casino staff actually offered her a room at the hotel, for which she paid with the money she had skimmed off the TICO machines. After Le was identified as one of the perpetrators and reported to the police, she pleaded guilty to one count of obtaining casino property illegally, by deception. She actually offered to repay the money to the casino.

Speaking about the whole experience, Le said, “I was in this trance…I am really annoyed with myself. All that work I had done with my psychologist was out the window.”