Friday, 7 November 2014

The Amazing Race 25, Episode 7

Marrakesh (Morocco) - Palermo (Italy)

“What happens in Vegas, stays in Vegas.” (Not.)

There are some things that happen during the filming of The Amazing Race that television viewers never see. Each episode of the reality-TV race around the world is separated from the next by a 12-hour (or occasionally longer) “pit stop”, typically at a luxury resort or hotel. The racers are filmed arriving at, and departing from, each pit stop. But the cameras and microphones follow them into their hotel rooms only when they are invited in by the racers, typically only for brief and controlled glimpses.

In real life, each season’s race around the world lasts about a month. During that time, the two-person teams of racers are on camera continuously, almost everywhere else they go. Behind the closed doors of their hotel rooms, however, they can relax, plan strategy, process what they’ve experienced, argue with each other, make love, etc., without being interrupted or worrying about what the people watching them will think.

That’s as it should be, and as it should be for ordinary hotel guests as well, especially long-term travellers in less familiar places. Sensory overload is an important element of culture shock. In a place where there are few foreign visitors and people who look like you are a rarity, being the constant focus of attention can be enough to make anyone feel like they have inadvertently become the star of their own reality-TV show. Often, the only escape for an overwhelmed visitor, and the only place where they can regain a sense of being in control of their space and their experience, is inside their hotel room.

Immersion in sensory overload can be enjoyable, in controllable doses. The longer the duration of your trip, the more likely you are to need to withdraw, at least occasionally. The ability to exclude both temporarily unwanted people and temporarily unwanted stimuli from your hotel room is most vital for long-term travellers, road warriors, and people like some of my readers who for various reasons have lived in hotel rooms for months at a time.

The U.S. Supreme Court has recognized that under U.S. law, once you have paid for a hotel room, your room is your home and your castle. You are entitled to the same protection against unwanted intrusions in a hotel room as you would be in the same room if you owned it outright as a condo.

As is often the case, however, the law is one thing and business norms are another. The difference is made clear in a fascinating and widely-misreported legal case involving a gambler arrested earlier this year in Las Vegas.

Paul Phua is a Malaysian businessman well known as a high-roller at casinos in Macau and in Las Vegas, where he has played in million-dollar-ante (U.S. dollars) televised poker games.

(Macau is an enclave in China near Hong Kong on the Pearl River Delta. Macau used to be a colony of Portugal, as Hong Kong was a colony of the U.K., and both are now “Special Administrative Regions” of China. Hong Kong continues to use its special legal status to provide a haven for banking and incorporation. Macau uses its special status to provide a haven for legal gambling. Casino gambling is generally illegal in China except in the Special Administrative Regions. Most Chinese citizens can’t get visas to travel to the USA or other countries, but can more easily get permission to travel to Macau from the rest of China. As a result, Macau has become the world’s largest legal casino gambling center: Significantly more money is bet and lost to the casinos in Macau than in Las Vegas.)

Paul Phua and his son Darren Phua were arrested in July of this year, during the soccer World Cup, in a residential villa (a 10,000-square-foot hotel suite) at the Caesar’s Palace casino-hotel complex in Las Vegas. Gambling, including betting on the World Cup, is of course legal in Las Vegas. That’s how Caesar’s Palace makes its money, and that’s why the Phuas were there. They have been charged with U.S. Federal crimes, however, for allegedly using the Internet connection from their hotel villa in Las Vegas to send messages to unlicensed sports betting businesses in Macau and elsewhere.

What made the headlines last week, and led to an editorial in the New York Times, was a motion filed by the Phuas’ lawyers arguing that the searches of the Phuas’ villas were unconstitutional.

If you have time, and enjoy a good story, I encourage you to read the motion. I spend a lot of time skimming and sometimes reading legal briefs, as part of my work as a policy analyst and consumer and human rights advocate. Most of the time, even when the arguments are important, it’s just work. But this is the best-written piece of legal story-telling I’ve read in years, even down to the legally irrelevant asides. (“Once they left the villas, the first comment of [agents] Lopez and Kung was to agree that the female butler was “pretty hot.” Ex. F., Trans. Disc 3, p. 39, lines 24-25. Turning back to the case, they…”)

The essence of the Phuas’ lawyers’ argument was that FBI agents and Nevada state law enforcement officers repeatedly cut off the Internet service to the Phuas’ villas, waited until the residents of the villas reported the outages, then came into the villas with hidden cameras and recorders but disguised as, and falsely claiming to be, repair technicians working for the hotel.

The police then used the information from these warrantless entries to apply for a search warrant for the Phuas’ villas as well as a another villa occupied by some alleged associates of the Phuas, claiming that the residents of the villas had “consented” to their coming inside.

The legal issue is whether you can be deemed to have “consented” to a search by the police if you let a person into your home who claims to be a repair technician, especially when the only reason you called for service is that the police had turned off your service.

This sounds like something out of a comic-book story of surveillance in a tin-pot dictatorship, where the phone in your hotel room stops working (because the secret police have disconnected the line), and then the secret police show up at your door, pretending to be from the telephone company, and pretend to “fix” the phone while installing wiretapping devices.

There’s more to the malfeasance of the FBI and Nevada police in this case. They tried to hide from the judge the fact that they were the ones who had disconnected the DSL lines to the villas, prompting the residents’ service request to the hotel. They also claimed to the judge that the Phuas had been “free to leave” while they were being kept in handcuffs for more than five hours. Since the Phuas weren’t being detained, it wasn’t necessary to read them their rights or allow them to talk to their lawyer, who had shown up outside the villa and was turned away by police.

But what interested me most was the role of the hotel-casino management and staff.

The New York Times editorial, like much of the of the other news analysis, got this backwards:

During the 2014 World Cup, the agents suspected that an illegal gambling ring was operating out of several hotel rooms at Caesar”s Palace in Las Vegas, but they apparently did not have enough evidence to get a court-issued warrant. So they enlisted the hotel”s assistance in shutting off the Internet to those rooms, prompting the rooms” occupants to call for help. Undercover agents disguised as repairmen appeared at the door, and the occupants let them in. While pretending to fix the service, the agents saw men watching soccer matches and looking at betting odds on their computers. There is nothing illegal about visiting sports-betting websites, but the agents relied primarily on that evidence to get their search warrant. What they failed to tell the judge was that they had turned off the Internet service themselves.

The voluminous court filings (those that are available without charge through RECAP are linked from this copy of the docket sheet) and other news reports about the underlying facts make clear that the actual chain of suspicion and illegal snooping went in the other direction:

Contrary to what the Times suggested, the police didn’t “enlist” the hotel in their investigation. The hotel initiated the investigation, enlisted the police to spy on its guests, gave the police full access to all the data it had already collected about these guests and all the surveillance tools it had already installed, and provided support without which the police wouldn’t have been able to trick the guests into letting in the cops disguised as Internet repairmen.

Reprehensible (and unconstitutional) as the cops’ actions were in this case, anyone who spends time in hotel rooms ought to be at least as outraged at the hotel’s role in spying on its guests.

What the casino hotel suspected its guests of, and what gave rise to those suspicions, isn’t clear. Certainly it wasn’t “suspicious” that the occupants of a high-roller suite were gambling, either in general or on the World Cup, on which Caesar’s was making book. That’s why the the Phuas were there, and why they had been given the use of the villas, the big-screen TVs in their “media rooms” to watch the games, the computers so that they could check the odds being offered, and the private “salon” for their personal gambling games. It would have been suspicious if they weren’t gambling, weren’t watching the games they were betting on, or weren’t following the odds as they were placing their bets.

If the hotel decided it didn’t want to be associated with whatever it thought the Phuas and the other residents of any of the villas were doing, it could simply have stopped providing them with free lodging and other services. Presumably, that would have induced them to decamp to some other more hospitable casino that valued their betting (and losing) more — or to get back on Mr. Phua’s private jet and go someplace else..

For more than a decade, advertising for Las Vegas’ hotels and casinos has centered on the implied promise to protect the privacy of their guests’ activities while on their premises, “What happens in Vegas, stays in Vegas.” But these same casinos and hotels have actually been in the vanguard of the hospitality industry in guest surveillance, with the owners of Caesar’s in particular recognized as the industry leaders.

What sort of surveillance does Casears conduct on its guests? According to the Phuas’ lawyers:

Caesar’s sent the results of its investigation to the [Nevada Gaming Control] Board…. The Board began an investigation, together with the FBI. Caesar’s fully cooperated — for example, by providing extensive records about the villas’ residents. These included logs of every entry into and exit from the villas, as well as detailed logs regarding the residents’ whereabouts and their requests to Caesars’ staff. The agents had access to Caesars’ extensive network of cameras (which recorded every entry and exit), including tapes spanning most or all of the residents’ stay at the hotel.

All this information is routinely collected and retained about every guest, not just those who have come under any suspicion. And it is voluntarily and pro-actively passed on to police whenever Caesar’s feels like it, without the need for the police to ask Caesar’s for it, much less to ask a judge for a warrant.

Casinos and theme parks, both of which create all-encompassing environments designed and laid out to induce their guests to spend as much money as possible, have been leaders in tracking of their customers’ physical movements and activities. Theme park customers are tracked with RFID wristbands containing uniquely numbered radio beacons. Gamblers are tracked with”loyalty cards” for slot-machine players and individually numbered RFID gambling chips for table games that can be linked to the specific player to whom they are issued, and tracked through each bet or transaction in which they are used until they are cashed in.

The CEO of Caesar’s, Gary Loveman, has a Ph.D.from MIT and taught at Harvard Business School before he was was hired away by Caesar’s to manage its “loyalty” programs. I’ve heard him speak several times before audiences of his fellow travel industry executives. He’s revered by his peers as the pioneering travel industry guru of Big Data collection, analysis, and usage for customer tracking, profiling, personalization, and optimized allocation of hotel rooms and other resources and services to generate maximum revenue. [Update: For more on Loveman and Ceasar’s use of personal data about gamblers, see Adam Tanner’s book, published around the same time as this bog post but which I was unaware of until years later, What Stays in Vegas.]

“Casinos have hotels to give gamblers a place to rest and recover, so that they can gamble more,” Loveman is fond of saying. He’s described publicly, and in detail, how Caesar’s allocates rooms and other perks — especially the most luxurious facilities and expensive services such as the villas the Phuas and their friends were occupying — to those guests who the casino knows from past experience are most likely to spend (i.e lose) the most money at the casino. It would make no sense to rent such a villa to someone unknown, even if they are willing to pay rack rates that start at US$25,000 per villa per night, when the same villa could be comped to a high-roller who can be counted on to lose more than that in the casino.

The Phuas and their friends weren’t paying (other than indirectly through their gambling losses at the casino) for their lodging, for their meals in any of the casino’s restaurants or from room service, for the round-the-clock private butler service provided for each villa, or for anything else they asked for. If they wanted $600 worth of Vietnamese food one day, as the butlers’ log shows, they got it delivered, free. If they didn’t like the laptop computer the hotel provided, the hotel would buy them another one of their choice, to use for free during their stay.

At the time of their arrest, the Phuas and their family and friends had been staying at Ceasar’s for almost a month during the World Cup. They were occupying three villas which, at rack rate, would have cost paying guests more than US$2 million for a stay of that duration. Presumably, Caesar’s invited them and comped them because it had confidence they would lose more than that much money in Caesar’s casino during their stay. They weren’t uninvited guests imposing their unsavory ways on a reluctant host, but VIPs lured to Caesar’s with more than US$2 million worth of complimentary services as well the promise of the advertisements that, “What happens in Vegas, stays in Vegas.”

These are the circumstances in which Caesars’ in-house “investigators” claimed to be shocked — shocked! — to find out that there was gambling going on in the Phuas’ villas, called in the law, and put themselves and their staff contractors at the beck and call of the police to trick their way inside the villas.

The lowest paid of the casino hotel’s employees, the butlers assigned to the guest villas, tried to block the doors to keep the cops-disguised-as-Internet-repairmen out of some areas of the villas. The butlers told the police “repairmen” that the guests had said they didn’t want uninvited visitors interrupting them while they were busy watching the World Cup games.

The presumably better-paid consultant brought in to fix and “un-fix” the DSL lines and coach the cops on how to impersonate technicians cooperated in the deception, although with occasional notes of reluctance — for his own safety, and not on any ethical grounds.

At the top, the hotel’s management appears to have given the scheme its unequivocal support.

I think this is more than just coincidence. Less wealthy people, who can afford less privacy of space for themselves, are often more aware of how valuable and important an aspect of privilege it is. Wealthier people who have always had “a room of their own” sometimes take it for granted — until, perhaps, they are travelling and don’t have that personal space they are used to.

If Caesar’s was really suspicious that the Phuas were doing something illegal, or even simply that they were “cheating” by taking comped services while placing their bets elsewhere, Caesar’s could simply have started charging them rent, or kicked them out.

If the police came knocking on their own initiative, Caesar’s could have stood up for their customers and guests. That’s what owners of mom-and-pop motels in Los Angeles, with far fewer resources than Caesar’s, did when the city passed a law requiring them to make their guest registers open books for police to look at at any time. They challenged that law, successfully, and their objections are now about to be reviewed by the Supreme Court in its current term.

Caesar’s could have asked to see a warrant — as should any hotelier — when the police asked for entry to a guest room or suite.

In the absence of a warrant, the proper answer when the police asked for Caesars’ records of guests activities should have been, “What happens in Vegas, stays in Vegas.”

Too bad Caesar’s Palace missed the chance to prove that they mean what they say in their ads.

Link | Posted by Edward on Friday, 7 November 2014, 23:59 (11:59 PM)

To be fair, the "What happens in Vegas stays in Vegas" tagline is the work of the Las Vegas Convention and Visitors Authority, not Caesar's.

Posted by: Matt, 11 November 2014, 21:10 ( 9:10 PM)

"FBI defends 'ruse' of undercover agents posing as hotel cable guys" (by David Kravetz, Ars Technica, 12 November 2014):

Posted by: Edward Hasbrouck, 12 November 2014, 10:28 (10:28 AM)

"FBI Agents Pose as Repairmen to Bypass Warrant Process" (Bruce Schneier, Crypto-Gram):

More from "Schneier on Security":

Posted by: Edward Hasbrouck, 15 December 2014, 07:47 ( 7:47 AM)
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