Casinos Bet on CCTV and Win

Gaming establishments all across the nation now realize that the latest surveillance technology can protect them against customer cheating, employee misconduct and fraudulent claims better than ever before. As a result, many have already adopted or are seriously considering state-of-the-art digital CCTV equipment.

Dennis McAndrew (a.k.a. Dennis Nikrasch) was a cheater who used a concealed hand-held device to program slot machines for his own financial advantage. His scams netted him $16 million before he was caught and sentenced to 71/2 years in prison. Although McAndrew’s case is unusual because of its size and sophistication (his scam was one of the biggest in Nevada history), it highlights the challenges casino surveillance directors must face. Fortunately, the typical casino criminal is less creative and sticks to tried and true ways of cheating, such as the palming of chips, card switching and more.

Although cheaters are a well known threat to casinos, of equal concern to surveillance and security directors is embezzlement by employees and mid-level and upper management. Fraudulent claims resulting from phony slip and falls and car accidents are other sources of financial loss (not to mention headache) for gaming properties.

In order to stem the tide of cheating, internal losses and fraudulent claims, casinos are taking CCTV technology to the next level. Cameras now monitor escalators, elevators, retail stores and hallways, in addition to gaming areas. Increasingly, the goal of a casino is maximum camera coverage for the entire property (with the exception of restrooms). Surveillance systems already installed in the gaming areas are being upgraded as well.

Another trend is a general shift toward more asset protection. Surveillance is now used to monitor both front and back house operations.

This change is happening because multiple applications for CCTV by a single property improve its return on investment (ROI). Like with any other business, when more departments can partake in the benefits of a system, it is easier to justify the cost of the technology.

Indeed, casino management now recognizes how the integration of surveillance, security, human resources, risk management and loss prevention, with the help of the latest CCTV systems, can reduce operating costs and losses.  And with new casinos being opened every year, particularly in the Indian gaming market, the opportunities for integrators in this industry are limited only by their ambition, skill and connections.

Regulations Vary From State to State, Tribe to Tribe
Casinos can be grouped into three loosely defined categories: major casinos like those found in Las Vegas and Atlantic City; smaller market casinos, including some riverboat establishments; and native American casinos, which run the gamut in size from small (30 to 50 cameras per facility) to huge, like Foxwoods in Connecticut. Although there are some similarities within these categories, each property has its own internal guidelines, applicable state regulations and management style.

Some of the larger locations, such as Atlantic City and Foxwoods, are heavily regulated. In other states, such as Nevada, regulations are less strict. Generally speaking, most gaming commission regulations do not specify the type of CCTV technology casinos must use, although many have developed or are in the process of developing guidelines for digital equipment.

Gaming Corporations, Consultants Dominate Majors
Most large properties, like the ones in Las Vegas and Atlantic City, are owned by corporations such as Boyd or MGM/Mirage. In these cases, an integrator normally would be hired to install the CCTV systems if the property were new or if a large portion of it were being expanded. Additionally, the majors will most likely work with a consultant and specify a more comprehensive system that encompasses security, loss prevention and risk management. If they are doing simple upgrades or maintenance, the larger casinos have on-sight personnel do the work.

Like the large gaming arena, the smaller markets are regulated to varying degrees. Interestingly, some of them, like Illinois or New Orleans, have even tougher standards. If the casinos are small enough and new, they may turn to local integrators for design and installation of their security systems.

Close cousins to smaller markets are tribal-owned casinos. Some are small in size and may depend on local integrators for their initial CCTV installations or major upgrades. Despite this, Native American casinos cannot be too narrowly defined because they come in a wide variety of sizes and have differing management philosophies. As of 2002, there were 201 tribal governments controlling 321 Native American casinos in this robust segment of the market.

The level of regulation affecting CCTV surveillance varies, depending on the tribe. The regulations affecting many tribal-owned properties are rather lenient by some standards, but it does not mean the systems installed are any less effective. Instead, more relaxed standards give the surveillance director and integrator flexibility to install cameras, DVRs, VCRs, local area networks (LANs) and switchers only where they are needed and economically viable.

Many Commissions Prefer DVRs, But Admissibility Still Unknown
The federal minimum internal control standards (MICS) are applicable to tribal gaming and specify that the minimum recording speed of a surveillance system should be 20 frames per second (FPS). Also, the image quality should be of sufficient clarity. Besides these MICs, however, the type of surveillance technology used by casinos is not specified by regulations.

Instead, many gaming commissions are learning to appreciate digital technology, particularly DVRs. Gaming boards generally are impressed with the fast rate of speed at which events recorded on a DVR can be located. This makes the jobs of enforcement officials easier.

One nagging concern some commissions have about DVR images, however, is the uncertainty about their admissibility in court. Fortunately, most DVRs have some form of watermarking technology that ensures the recordings are original. Still, there have been no court cases formally declaring the technology will withstand a legal challenge. Despite this, there is a consensus in the industry and among gaming boards that DVR evidence will be admissible when tested.

CCTV Systems Keep Customers, Employees Honest
Whatever equipment a jurisdiction allows, all regulatory boards have the same goals: to ensure the integrity of the game and revenue reporting process. Gaming commissions want to read the cards and denominations of chips, as well as watch the play and money drop. Past posting, 10-percenting, sliding dice and a player putting extra chips on a winning roulette number are some of the many other illicit activities often captured by CCTV systems.

Patron misconduct, however, isn’t the only threat to casinos. Approximately 50 percent of a property’s losses can be attributed to internal theft by employees and collusion between casino employees and outsiders. The cash-handling positions are particularly susceptible to internal crime. Other employee wrongdoings often uncovered by cameras include the watering down of drinks, drinking on the job, drug use, loitering and embezzlement by midlevel and even upper management.

Space, Storage and Speed Make DVRs More Attractive
In order to keep better track of this illegal activity, many casinos are gradually adopting DVRs. Unfortunately, the biggest hurdle to widespread adoption of DVRs is price. Despite the cost issues, many casino surveillance directors understand they will eventually need to adopt digital technology because of its overwhelming advantages, such as minimal maintenance.

Another advantage DVRs have over VCRs is the fact that tape storage is eliminated. This factor is<

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