man vs. machine
cont.
C
urzi came across a Feb. 2, 2009,
email with a spreadsheet attached—
“Video Lottery Game Payout Per-
centage Report.” The document had come
from Gaming Laboratories International,
an independent auditor based in New Jer-
sey that works with many state lotteries to
test machines.
The spreadsheet listed all the types of
Oregon video poker machines by manu-
facturer, the millions of games played in
one quarter of 2008 and how much money
players spent.
In one column, the document showed
what various video poker machines, based
on calculations of probabilities, were
expected to pay out to players over time.
In another column, the document
showed what the machines were actu-
ally paying out. Curzi thought the payouts
should have been very close to what the
game’s programmers predicted.
Some weren’t. Curzi discovered the
game he had been playing at Quimby’s,
the Jacks or Better “Bluebird” terminal
produced by WMS Gaming, was off by
quite a bit.
The spreadsheet showed Jacks or Better
on average should be paying out 90 cents
for every $1 players put into the machine. It
actually paid out about 87 cents.
That 3-cent difference may seem small,
but when multiplied by the huge numbers
of video poker games played, it translated
to about $1.3 million per year that Jacks or
Better wasn’t returning to players.
“This,” Curzi recalls thinking to him-
self, “is totally corrupt.”
tem to find video poker games that might
be making payouts that were too high.
Instead, they found machines whose pay-
outs were too low.
“This triggered additional investigation
regarding the integrity of the games,” the
memo said. “Further, there was a question
whether additional information should
be provided to players to ensure they have
accurate information regarding how video
lottery games pay.”
The Sept. 15 memo also contained this
nugget about WMS Gaming, maker of the
game Curzi played at Quimby’s: “WMS
has confirmed that the auto-hold strategy
for all WMS poker games is set to pay out
lower than the other products as a result
of the auto-hold strategies W MS has
implemented.”
Lottery officials, according to a sepa-
rate 2009 memo, decided to put accurate
auto-hold payouts on the Web. But Curzi
went looking online, even using the Inter-
net Archive search engine, to see if the
lottery had ever made public the lower
odds. He found no evidence it had.
finding out if more players are concerned
about auto-hold.
“It gets complicated in the middle of
litigation,” he says. “Any actions that we
take might be interpreted as an admission
that we don’t mean to say.”

xperts on lotteries and the law say
Curzi’s odds of winning in court
seem low. Rob Carey, an Arizona
class-action lawyer, took on several state
lotteries over the deceptive practice of
selling scratch-off tickets after the top
prizes had already been awarded. Carey
never succeeded in getting a class estab-
lished for his lawsuits, but he did win
payments for some plaintiffs and forced
changes in state lottery practices.
He says Curzi’s case hinges on whether
the Oregon Lottery’s public disclosures
were adequate. “It really depends on what
they’re telling the players,” Carey says.
The lottery could be safe even if the
disclosures are vague. “You have to show
the intent to defraud,” says I. Nelson Rose,
a law professor at Whittier Law School in
agement consultant in the state’s Depart-
ment of Administrative Services wrote
back to say the lottery was still investigat-
ing Curzi’s claims.
On Dec. 31, Curzi took the Oregon Lot-
tery to court.
J
E
ack Roberts, the lottery director,
took over the agency in December
2013, following years of controversy
and accusations the agency wasn’t doing
enough to address problem gambling. He
had earlier served as state labor commis-
sioner and ran in the Republican primary
for governor in 2002.
Roberts says the lottery is fairly repre-
senting players’ chances. “Clearly the odds
favor us,” he says. “That’s what gambling
establishments are about, but we believe
we’ve been honest in representing what
they are.”
Roberts wasn’t around when the lottery
introduced video poker and the auto-hold
feature in 1992. “Our assumption has
always been that on balance people who
play auto-hold do better than people who
“everyone should
understand that
the odds in all
our games favor
the lottery.”
H
16
Willamette Week MARCH 4, 2015 wweek.com
—jack roberts,
oregon lottery
director (left)
thomas cobb
e kept digging and made a second
big discovery: Lottery officials
knew about the discrepancy, and
the auto-hold function on some machines
was to blame.
“Due to the vendors’ auto-hold strate-
gies, a few other poker games have actual
payout percentages that are below theoreti-
cal,” Carole Hardy, the lottery’s then-assis-
tant director for marketing, wrote on April
1, 2009.
Curzi discovered a survey of video poker
players the lottery commissioned from
Mosak, a marketing research firm.
“Across all player types, the overwhelm-
ing majority of players said they prefer the
auto-hold feature in video poker games
as it makes it more convenient and easier
to play,” a 2010 Mosak report said. “Play-
ers said this feature allows them to hold
the correct cards, thus increasing their
chances of winning.”
Curzi had only hoped to understand
how auto-hold worked. He had instead dis-
covered the lottery knew auto-hold sucked
millions away from players—and players
actually thought auto-hold helped them.
The lottery’s rules require “a close
approximation of the odds of winning
some prize for each game” and say those
odds “must be displayed on a Video Lottery
game terminal screen.”
Documents Curzi received show lot-
tery officials debated whether or not they
should tell players the actual odds if they
relied on auto-hold.
In a memo labeled “confidential” and
dated Sept. 15, 2009, lottery officials
reported they had been studying their sys-
Over the next month, Curzi built a
spreadsheet to estimate how much money
the video poker machines, based on the
odds, should have paid out, compared to
what they actually did.
What he found startled him. Payouts
to video lottery players were as much as
5 percent lower when they used auto-hold
than when they didn’t. That translated to
$134 million.
To Curzi, it was an outrageous dis-
crepancy—especially given that players
believed auto-hold helped them, and the
lottery knew otherwise. Buried on the
lottery’s website is one disclaimer: “Auto-
hold strategies vary by game, based on the
particular features of a game and do not
necessarily result in theoretical payouts.”
Curzi says that’s not enough. The lot-
tery is supposed to be based on chance.
“You can’t manipulate the game,” he says.
In October 2014, he sent the Oregon
Lottery a letter detailing his findings
and notifying officials he intended to sue
unless the lottery reimbursed players
within 30 days. On Dec. 4, a claims man-
don’t,” he says. “We don’t tell people that.”
He rejects Curzi’s allegation the lot-
tery is intentionally misleading players.
“I don’t think we’ve ever represented
that the auto-hold gives you the optimal
result,” he says. “The idea was that it gives
you a good result.”
But records Curzi turned up show the
opposite. “The machine recommends the
best possible cards to hold in order for the
player to win and if the player changes the
cards to be held, the possibility of winning
will decrease,” the Sept. 15, 2009, memo
marked “confidential” reads.
Today, the lottery is in the process of
replacing all 12,000 video lottery termi-
nals in the state; it’s a routine technol-
ogy update. But one consequence of the
upgrade is that Oregon is completely
phasing out the WMS Gaming “Bluebird”
terminal on which Curzi played Jacks or
Better.
Roberts says Jacks or Better is being
phased out because it’s unpopular with
players.
Roberts says the lottery is interested in
Southern California. “I don’t think they’ll
be able to do that.”
Rose says it ’s the machines’ manu-
facturers that should be worried. “If the
plaintiff were able to prove this was inten-
tional,” he says, “that supplier could end
up paying.”
Nevada-based Scientific Games, owner
of WMS Gaming, the maker of the Jacks
or Better game Curzi played, declined to
answer WW ’s questions. “It is company
policy not to comment on ongoing litiga-
tion,” Scientific Games spokeswoman
Mollie Cole said in an email.
Curzi is undaunted. He wants play-
ers to recoup their money. He wants the
lottery’s auto-hold feature to give good
advice, and he wants the agency to give
players honest information.
“It goes all the way back to that first
photo,” he says of the photo he took of the
video poker machine’s bum recommenda-
tion at Quimby’s last year. “I look at it and
say, ‘That’s not right.’”