A pair of gamblers sparked an intriguing legal debate earlier this year after they were charged under a federal hacking law for earning large payouts by manipulating a video poker game error. The hacking charges were dropped earlier this year, but the men, Andre Nestor and John Kane, were still on the hook for charges of wire fraud. Wired reported that these charges were recently dropped, absolving the pair of any wrongdoing in the video poker incident and sending an important message to the gambling industry and software community at large: Vendors are on the hook for losses from features they built in.
“[T]he government has evaluated the evidence and circumstances surrounding [the case], and determined that in the interest of justice it should not go forward,” Assistant U.S. Attorney Daniel Schiess wrote in a court filing to dismiss the charges, according to Wired.
Playing by the rules
The defendants Nestor and Kane maintained their innocence throughout the case, noting that the trick they used to win large payouts from the video poker machine involved an allowable sequence of moves and was therefore part of the way the game was built to be played. Although the functions were the result of the bug, the code, as constructed, allowed for Nestor and Kane to take advantage of it without doing anything unauthorized. As a result, the case was clear-cut in favoring their innocence, Jeffrey Neuburger, a partner at Proskauer Rose, wrote in a column for Law360.
With all charges dropped, the case is also instructive of the limited legal recourse companies have if their products contain bugs that allow them to be exploited for money or other ends without anyone exceeding normal authorization. In this case, casinos lost hundreds of thousands by perfectly legal means. The takeaway for developers is that avoiding such bugs should be a priority, and tools such as static analysis software can be valuable aids in mitigating errors. By catching issues that could lead to major losses down the line in development, businesses can avoid setting themselves up for similar incidents. As for Nestor and Kane, it appears that they will get out with their winnings intact. And casinos can find reassurance in the fact the bug wasn’t more well-known.
“All these guys did is simply push a sequence of buttons that they were legally entitled to push,” Kane’s lawyer, Andrew Leavitt, told Wired. “These guys kind of kept it a secret. If this had got out… this would have been a bad thing for the casinos.”
Software news brought to you by Klocwork Inc., dedicated to helping software developers create better code with every keystroke.