Canadian Underwriter

Risk challenges for casinos

October 2, 2015   by Sarah Cunningham-Scharf

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Not that you would, but if you were to try to sell drugs during your fun-filled stay at one of the lovely hotels of fabulous Las Vegas, it’s really not a good idea to meet your customers inside the casino—or to invite them up to your room on the twentieth floor. Because they might be packing. One of them brought a knife and a gun on a Tuesday in February 2006. “Basically it becomes a robbery—he wants the drugs and cash,” says Tommy Burns, a former Nevada police chief who was the head of security at Harrah’s at the time. “So he tortures [the dealer], stabs him several times trying to get him to give him the combination to the safe. He also shot him once.”

After the gunshot, another guest in a nearby room called security. The stabbed and shot dealer also managed to call for help on the room’s phone. “Why the suspect allowed him to make the call, we don’t know,” says Burns.

He naturally sent up security officers. “When security knocked on the door, the victim, who’d been stabbed several times, was able to open the door and fell out. Then the suspect shot at the officers, who –dragged the victim out of the doorway and backpedalled to the end of the hallway.” The customer/would-be robber then locked himself in the room—which wasn’t very good long-term planning.

That’s when the cops took over: flashing cars, SWAT officers, the whole shebang. They placed snipers in a nearby parking garage and shot out the room’s window, trying to lure the suspect to come out of the bathroom so they could take him down. “They were in a standoff for nearly six hours,” says Burns. “Eventually, they were able to burst through the door with explosive devices and take him into custody.” But the dealer died.

No surprise then that customer was found guilty of murder and got life in prison. And so far what we got here sounds very much like your lesser-inspired segment of CSI. But we wouldn’t have Burns telling this tale unless he’d played an unusual role in this brief drama. Sure, it was his job as head of security to ensure the safety of other guests, and yes, the police thought it would be a very good idea if the entire hotel was evacuated.

Only Burns made a different decision. “You have to use some rationale with the police,” he explains. “You have 14-inch concrete floors, top and bottom, so bullets aren’t going to go through the floor or the ceiling. You have a 1,500-room wing, and they want you to evacuate every inch of the property.”

Instead, Burns evacuated guests three floors above and three below and stationed officers at stairwells to keep guests from returning to their rooms. “We had to find a place for probably 300 people while they were outside their rooms for about six hours. We used the theatre, gave people blankets and food.”

To keep everyone calm, Burns instructed his security officers to divulge only the necessary information. “We said we had an incident—that’s how you describe it. We were moving people into the theatre off the casino floor, so they knew there wasn’t a fire or a panic. They didn’t have to pay for that night’s stay at least.”

Evacuations can become more complicated when poor weather becomes involved, which is why it’s important to have a plan in place. “If you’re in Atlantic City and it’s winter, or it’s Las Vegas and it’s July, you’re not going to be putting people outside. You have to already have an
idea where you’d stage people.”

This becomes especially true when casino hotels receive bomb threats, which occurs nearly as often as fire alarms. “Sometimes you’ll have somebody making bomb threats so they can evacuate the building. For a casino with 20,000 people, you might as well close up shop for the day.”

Security officers have to do a cursory search for a bomb, then a senior casino manager will have to decide whether to evacuate the hotel. “A bomb threat is a hard decision to make. If you evacuate the building, you could get a bomb threat once a week. It might be an employee wanting to go home early. Once they find out [you’re not going to evacuate], you’re not going to have as many bomb threats.”

Burns says fire alarms are easier to assess and determine whether evacuation is required, depending on the size of the blaze. The Cosmopolitan of Las Vegas had to partially evacuate at the end of July when a fire broke out on the pool deck. More than 100 firefighters were called, but the fire didn’t spread to the inside of the hotel and was put out within half an hour.

<h2>Follow the money… underwater</h2>

A director of the Nevada chapter of RIMS and a leading casino expert (who prefers not to be named) says the way buildings in Vegas are constructed prevents the spread of fires anyway. “You don’t find too many old buildings out here. We’re in a constant state of remodel. When you have thousands and thousands of people in your building every single day, it takes a toll.”

Many buildings are built in zones so that incidents can be contained to one area of a complex. “The rooms even are built in a way that if a fire broke out in a room, as long as the windows are intact and the door is shut, the fire will literally burn itself out.”

The fire at the Cosmopolitan burnt quickly because of a building material, he says. “The pool deck trees and structures out there were built with polystyrene, which is basically a Styrofoam cup. If you lit a Styrofoam cup on fire, it’s going to burn fast… It’ll be a very hot fire, but it goes out very quickly.”

In 30 years of working at a casino, he’s only experienced a full evacuation once. “An air conditioning unit had caught on fire and the flue system didn’t completely shut, so it was pumping smoke into the casino. We made the decision to evacuate everybody—nobody was in real danger
except for smoke inhalation.”

And shutting down a casino can take far longer than the time available for an evacuation. “You have to have a full accounting of the money. You can’t do that in about two minutes. It could take days. But, it’s possible to secure money at tables and shut down machines and do a money
count later.

“We had to do a major power repair at a property in Mississippi that I worked at, and it took three days to close the casino. A gamut of people, insurance people and gaming commissions are there to make sure no funny stuff happens.”

The riskiest situation the expert encountered was at a casino in Biloxi, Mississippi during Hurricane Katrina in 2005. “You have days to get ready, but there are always security concerns, especially when you have to secure money. We rode that storm out. And we found out the money was sitting at the bottom of the Biloxi River because our barge sunk.”

Recovering from the storm took a long time, he says. “It was a total devastation of resources. The roads were gone, the infrastructure to get people to your property. All the support services from food vendors to getting toilet paper wasn’t going to happen.” And then there were the hassles and challenges of regaining power, the cleanliness of water, and the availability of air conditioning.

“We had 1,500 employees displaced because their homes were gone or severely damaged, so how do you get your work force back into work? We managed to help the bulk of our employees because our risk management department dealt with the insurance adjusters.”

In Mississippi, most properties are above the flood plain so they aren’t covered for flood damage. But, the state has to cope with multiple tornadoes per year, so most properties have wind protection coverage. To get claims approved, the risk managers enlisted employees to take pictures of downed trees and power lines on their own properties to help. “A typical casino can have 5,000 to 10,000 employees. People don’t realize that the behind-the-scenes at a resort is as large as you see on the customer side. Our employees have the ability to make things right with the customer.”

So, it’s important to train your workers well to ensure a positive experience for guests. A hotel and casino’s reputation is paramount these days, especially when a bad PR story is only a phone cam away.

“Training starts from day one,” says the expert. “What are our goals as a company? How do we interact with guests? Many hotels offer the same thing, a room with a bed. You need to make their experience special.”

Burns, the former head of security at Harrah’s, says he saw issues related to security training more often than fires. “Legal issues, detention issues, if security carries handcuffs, pepper spray or batons—they have to have training and policies. From a security standpoint, you’re looking at more litigation rising out of those issues than not knowing how to evacuate people.”

Security officers, of course, have to be prepared to detain people when things get ugly. “In Vegas you have an average of 40,000 or 50,000 people going through a casino, depending on what event it is,” says Burns. “Some of those are drunk, [or on] prescription meds, predators. Those concern me as a security director just as much as fires.”

And, proper documentation is vital for claims or potential litigation. “In the security industry, there’s 40 percent turnover. A year later you won’t find the guy [who wrote the report]. You want more information, and the person’s long gone.”

Add to the list a good leader trained in crisis management. “They all kind of flow together in a crisis; a fire, a bomb threat. Maybe an active shooter situation. Your plan should address all of that.

“Of course you need to have policy and procedures, then you have to have training. It doesn’t matter if you’re an operation of 100 people or an operation of 5,000 people; everyone has to know what to do.” In other words, when trouble goes down, it’s not the time to roll the dice.

This story was originally published by Canadian Insurance Top Broker.