Why do people cheat? Last week I read a book by David Callahan called The Cheating Culture: Why more Americans are doing wrong to get ahead. The book offered me a new perspective on cheating. Taking what I have seen in the casino industry in the last 20 years and what I have read, I thought I would sit down and try and make some sense of it all.
My first cheating experience
I will always remember my first "kill" in surveillance. I was monitoring a blackjack game. The dealer had a 5 up and dealt a player a blackjack. He paid the winning hand, discarded the cards and continued to deal the game. The lucky player, sipping our finest complimentary sparkling wine, collected his winnings and parlayed the bet for the next round. The dealer went on to eventually bust out to the cheers of the enthusiastic crowd at the table. But to my surprise on his payout fly-by, the dealer paid the blackjack winner again. The player quickly reached in and took the chips off the table. The adrenaline kicked in.
"Fresh kill," I yelled across the surveillance monitor room. "You're going down sucker." My supervisor reviewed the video footage with me and confirmed. "Should I call the government?" I asked my supervisor.
"What for?" he said with an inquisitive look on his face.
"The guy past posted and took the money - he's a cheat!" I said.
Eager to please in my new profession, my delight soon turned to disappointment. My supervisor told me it was a dealer mistake. He said it happened from time to time. Players put fresh bets out for the next round and sometimes a dealer has a "lapse in concentration." I questioned that if it was a mistake why didn't the player give the money back? My supervisor looked at me and said "would you?"
Over the years I have seen it happen time and time again. 10% of players give the money back. 90% don't. Are they cheating in collusion? Are they opportunists? Are they something else?
Cheating epidemic
As I continued to ponder these questions in my casino world, I couldn't help but notice the outside world seemed to be having its own cheating dilemma. Cases of people cheating on a much grander scale were making prime time news. Somewhere down the line people had changed their moral compass from right and wrong to what they can and can't get away with. Highly paid CEO's, powerful leaders, politicians, celebrities and professional athletes are now accused and convicted of cheating on a regular basis. The rich and famous are cheating.
Here's some examples of convicted or accused high profile cheats that can be named in the same time it takes to switch cards in a baccarat game: The Enron execs, the Tyco execs, Barry Bonds, Sammy Sosa, the NBA referee, Jayson Blair the reporter, Arthur Andersen, bogus religious evangelists, Michael Milken, college sports recruiters, Ben Johnson, the star pitcher in the 2001 Little League series who turned out to be 14, Martha Stewart, the guy who won the Tour De France last year, the guy who won the Tour De France the year before, the guy who will win this years Tour de France.
Why do people cheat and why are they apparently doing it more often? Are they down on their luck and need a dollar to feed their kids? Is someone holding a gun to their head? Are they hanging out with the wrong crowd? Do they owe someone a favor? Are they on some sort of medication? Are they suffering from some type of Wynona Rider disease? Do they do it just to get their kicks? Did mommy and daddy not hug them enough? Are they adrenaline junkies in need of a fix? Are they victims of child abuse? Stress? Alcohol? Drugs? Not enough drugs?
Security professionals and academics have numerous theories for why people steal and commit fraud. Often they use a triangle model that states that three factors must exist in order for a crime to occur: motivation, opportunity and rationalization. I have not read of any particular models applying specifically to cheating but for the purpose of a good argument, I will explore the theft and fraud theory.
Motivation (or Need)
Money makes the world go round. It provides our family with shelter and food. If we make a little more we can give our kids a good education and drive a nice car. Work hard and play your cards right and you may be able to add a swimming pool and a large plasma TV. Thanks to credit card companies most of us can now afford to go into debt and obtain all that neat stuff.
But it seems for some people these days, money is not enough. People want status. Status is a little different kettle of fish. We have to beat someone or something to get that. Winners take all. There's no prize for second. We know Tiger Woods won last year's British Open but who got second? We know Venus Williams won this year's Wimbledon but who got second? Who was the second leading scorer for the Cleveland Cavaliers behind LeBron James this year? Who was the Indianapolis Colts back-up quarterback behind Peyton Manning in the Super Bowl? Who scored the 2nd most touchdowns behind Ladainian Tomlinson last year? Everyone loves a winner.
To most of us, playing baseball and making $300,000 a year would be a dream job. But ask the guy who's sitting in the dugout next to a teammate who hits over 40 home runs a year and gets paid $20 million for doing it, how he feels. Can you say steroids?
Why is it that people who make $100,000 a year and are surrounded by colleagues that make $90,000 a year are happy but people who make $110,000 and are surrounded by colleagues that make $200,000 are not satisfied?
When did the "win at all cost" culture begin? Let's look at the last couple of decades. Statistics show the rich have been getting richer. The income gap between first and second is widening. People worship winners and the media constantly reminds us of what we don't have. Celebrity news shows (news?) are more watched than nightly news shows. Did anyone hear that Gordon Brown is now the Prime Minister of the United Kingdom? Apparently he replaced Tony Blair around the same time Brittney ran out of clean undies and Paris Hilton was spending jail time in the Beverly Hills Hilton.
Since the industrial age ended and the information age began, the corporate propaganda machines have taken over. A survey conducted recently concluded Americans see at least 250 advertising messages a day. Each one shaping our perceptions, desires and ambitions, strategically planned to strip you a dollar at a time by convincing you that you not only can have what you need, you should have what you want.
The new U.$.A. is all about winning at any cost. We are a part of the new "winning culture". Never satisfied with second place, we are being driven to do what it takes to win. Winning converts into money and money gives us status. Corporations use winners to tell us we can have what we want. We can be like Mike if we drink a certain beverage. We can be like LeBron if wear a certain brand of shoes. We can stay up to date like Peyton with a certain type of phone. People are buying into it. The corporations are prospering. The rich get richer.
Now I don't want to suggest it's all about status. I believe money is the primary motivator for committing theft or fraud. Poor people (without good lawyers) still populate our prisons more than rich people (with good lawyers) motivated by status. But for some reason I see more people cheating who don't really need the money.
Let's get back to the casino world. The casino industry has defined its business in a number of ways over the years. It went from the gambling business to the gaming business. In recent times it has been referred to as the entertainment business. I refer to the casino business as the "winning business". Casinos provide customers with wins. There is no other place in the world where you can escape your dull dreary life and step into a beautiful casino and win 20 or 30 times in an hour (let's not talk about losing). Each win gives a sense of accomplishment.
Customers come to win. Casino owners are in the business to win. Both parties don't consider themselves there to gamble. They are there to win. And as for entertainment, what's so entertaining about the dealer drawing a 5 card total 21 against your 20? That's about as entertaining as Rosanne singing the national anthem.
Opportunity
When it comes to the business world it is important to have accountability, internal controls and independent regulatory watchdog organizations to provide protection against corruption and cheating. The casino industry is one of the toughest regulated industries in the world. With a history of mob involvement and shady characters, state governments have bent over backwards to ensure that the casino industry is clean. CCTV surveillance and a strict system of accounting and internal controls provide a great deterrence against cheating.
Unfortunately, opportunities for cheating are increasing in other business segments. Technology is the crow bar for breaking into today's vault. White collar crime is on the increase. Millions of dollars are embezzled annually through the push of a computer keyboard button. Some inside information sent to a Blackberry can initiate a stock transaction for a huge gain. Pharmaceutical enhancers can give an athlete enough speed and strength to break a world record.
Although most business segments are regulated in some capacity, one needs to question the level of scrutiny, opportunity for corruption and resources allocated to enforce the law and regulations. Take for example the world's largest casino, the New York Stock Exchange. Although great lengths have been taken since the Enron scam was uncovered earlier in this decade, one wonders if regulators really can maintain the integrity of the world financial markets with the limited resources they have. How can so-called integrity watchdogs like auditors really be free from compromise when their pay checks come from the companies they audit? What about tax cheats? Tax avoidance or the tax gap has been estimated at over $500 billion a year. There are more tax earners, more businesses and more complicated rules. Auditing resources at the IRS were actually reduced in the 90's when tax returns filed increased by 14%. Temptations arose as the odds for getting caught lessened.
Although casinos are strictly regulated, the industry should not rest on their laurels. Systems of protection may be in place but useless if resources are not employed to monitor, audit and enforce. As the industry grows and more people visit our casinos the risk of cheating grows. The ratio of resources allocated to protecting the integrity of the operation should be increased to balance the risk of increased volume and threats. Maintaining the same size army against the increasing size of the enemy is strategically negligent.
Rationalization
Here's an idea: A TV show called "The Excuses of the Rich & Famous." Instead of Simon, Paula and Randy being judges, I would have Bill O'Reilly, Michael Moore and Carla from Cheers.
Cheats come up with all sorts of excuses but the one that strikes fear with almost every business owner or regulator is "everybody's doing it." When people feel they aren't getting ahead they look at what other people do to get ahead. What do they need to do to get an edge? If people around them are cheating to get ahead and not getting caught, they rationalize that it is OK.
Take for example, bar servers. A large percentage of them steal from the house. One dollar for the house, one dollar in the pocket. It is a nightclub and bar culture that has become almost acceptable to owners as a cost of doing business. Owners recoup the money by charging customers more. Bar owners may be able to rationalize the internal theft as just a few bad eggs but the problem soon gets bigger if nothing is done about it. Morale drops with honest staff as they see management's tolerance for dishonesty. Soon customer service levels drop and one of two things happen. The honest ones leave or they join the thieves.
OK, so now the bar owner has a big problem. He finally cleans house of all the bad eggs but decides not to call the police. He can do without the hassle or the bad publicity. All the bad eggs move to their next jobs and continue the culture of cheating. They have become accustomed to a lifestyle supported by stealing and in which they find it difficult to go back to being honest.
Sometimes people become victims of their environment. I recently read about a study that was conducted a couple of years ago. The study concluded that kids raised right but living in a bad environment had a higher risk of breaking the law then kids badly raised living in a good environment. Peer pressure can cause people to do things against their own good judgment.
Conclusion
In my opinion, the public and even the legal system has always taken cheating against casinos lightly. We are Goliath and all our players are Davids. But casinos take cheating seriously. $5 or $5 million, we take action. We will press charges if we can. We send a message to everyone that cheating will not be tolerated.
New York cleaned up their crime problem in the 80's and 90's by using a simple philosophy called the broken widow philosophy. If people live in an environment where they see broken windows on a daily basis they think no one cares, especially the authorities. People committed crime because of the perception that everyone else was doing it and getting away with it. The first thing the authorities did was repair the windows and clean up the graffiti. They took an approach of prosecuting every misdemeanor. It took almost a decade but in time the people of New York realized that their environment was changing. Society would not tolerate crime. The city is now one of the safest in the country.
I believe there are 3 primary reasons for cheating: money, status and current environment. Let me put it another way: money, ego and peer pressure. Maybe I'm taking a very simplistic view of a very complicated problem. The reason people cheat may never be answered entirely. It's not like it's a new thing. People have been cheating ever since there was something to win. Even the Greek Olympians used to cheat.
But why are the rich and famous cheating more. Maybe they always have, they're just getting caught more? Maybe the reward is greater than the risk? Maybe the crime does justify the time? I'm no psychologist or criminologist, just a casino guy who has spent a bit of time in a dark surveillance monitor room. I'm one of those guys that don't differentiate. A cheat is a cheat.