What Stays in Vegas

               INTRODUCTION

               Spies

The Bad Ol’ Days

In 1988, I involuntarily became the subject of old-fashioned data gathering. Spies followed me around Communist East Germany and recorded my every move. That year I was visiting Dresden, the great Baroque art capital that had suffered widespread destruction from the massive Allied firebombing in World War II. Even decades after the war, some of the city’s ornate buildings, including the Royal Palace, still lay in rubble. East Germany’s government prided itself on operating an especially efficient Ministry of State Security, the Stasi, to monitor suspicious activities and guard against potential enemies. The Stasi mobilized their forces for my arrival, and agents made a concerted effort to learn everything they could about me.

I was researching the Frommer’s travel guide Eastern Europe and Yugoslavia on $25 a Day, and I spent my days visiting hotels, restaurants, and museums, as well as puzzling out how to do things such as buy train tickets when lines snaked out the station door. Communism was crumbling during these years, yet the secret police continued their dedicated vigilance. Future Russian President Vladimir Putin served in Dresden during that time as a junior KGB spy.

On August 2, a mild day with temperatures mostly in the sixties, I strolled around the Semper Opera, a nineteenth-century structure gutted in the bombing and reopened forty years later, in 1985. The local authorities kept a close watch. Stasi Major Hartmann oversaw a team of ten counterespionage “comrade observers.” They monitored my movements. Agents kept a minute-by-minute log, supplementing their efforts with surreptitious photographs. I was code-named “Kiefer” (Pine Tree), perhaps because I am tall. If they were hoping to catch me sneaking off to the homes of dissidents or photographing military installations, they were disappointed; I stuck closely to my guidebook checklist.

“Here, Tanner, Adam, is interested in the exterior of the Semper Opera,” a caption for one of the photographs reads, noting the time as 10:35 a.m. “During his stop on Theaterplatz, he did not take any photographs, although he did have photographic equipment (tripod, camera bag). He made only written notes in a notebook.”

As I planned my next stop, I studied a city map for a few minutes, then asked for directions. From afar, an agent snapped a photo as that random citizen, his finger upon his chin in contemplation, answered the question. The Stasi agents pondered what to do about the man amid suspicions that anyone I encountered could possibly be a covert collaborator. In the end, they did nothing. “The man went off in the direction of the service building of the Semper Opera,” the file recorded. “He was not followed.”

Secret Stasi overview of the day’s monitoring of “Kiefer” in Dresden on August 2, 1988. Source: Germany’s Federal Commissioner for the Stasi Archives.

Eventually I found my destination, the former Schlachthof Fünf, where American writer Kurt Vonnegut survived the February 1945 firebombing described in his novel Slaughterhouse-Five. I stopped by the entrance of what had become a state agricultural institute and asked the guard about the building’s past. Was this the former slaughterhouse? Reading about the unscheduled inquiry some weeks later, a Stasi official grew alarmed. Likely he was not aware of the site’s literary significance.

“We request gathering of information on the reason for such a visit,” wrote Lieutenant-Colonel Wenzel. “Did he have state permission to visit? . . . What knowledge of German language did he show, were agreements for further contacts reached?” The Stasi dispatched an agent to find out by interviewing the duty guard and researching the building. “The USA citizen spoke broken but intelligible German,” the follow-up report found, citing the guard.

Secret police also ordered a follow-up analysis to unravel the mystery as to why I had stopped at a local budget hotel, spoken to the clerk, popped into a room, and then quickly left. That visit struck my covert minders as highly irregular. East Germany and the Soviet Union required Western tourists to prebook hotels through the state tourism agency. Since the agency vouched for the quality of the establishment, why would anyone need to review a hotel room? Who would doubt the good word of the German Democratic Republic? The Stasi dispatched an agent to question receptionist Karin Zickmantel. She gave my German-language speaking ability a better grade (“good”) and explained that I had visited Room 19 on the first floor. The Stasi decided we had not hatched a conspiracy.

The following year, the Berlin Wall fell. After allowing citizens free access to the West and its myriad of choices, East Germany and its vast secret police apparatus quickly collapsed. Reunified Germany opened the Stasi files to those who had come under surveillance. More than a decade after my visit to Dresden I obtained my fifty-page dossier and learned the details of the Stasi’s efforts to track me across the city.

Covert Stasi photo of the author taking notes in front of a hotel. Source: Germany’s Federal Commissioner for the Stasi Archives.

Truth be told, for all their diligence, the Stasi did not really learn much. In the Internet era, thanks to meticulous data gathering from both public documents and commercial records, companies today know far more about typical consumers than the feared East German secret police recorded about me. Through public records, private firms know where you live and have lived, which neighbors live near you, your relatives, what property you own, what crimes you have committed. They know your age and telephone numbers. They can research your shopping habits and hobbies, and determine favorite Internet sites. Sometimes they know your ailments, even, perhaps, if you take Viagra. They might know where you are at any time through smart phone apps and GPS locators. The aggregation of data makes finding out previously obscure information easy. All these years later, an Internet search quickly finds the home address and phone of the very same German hotel clerk who had to explain my visit to Stasi agents in 1988.

A line in front of an East Berlin bakery in 1988, a year before the collapse of the Berlin Wall and the end of Stasi monitoring. Source: Author photo.

Like East German agents quietly trailing their targets, many of today’s data collectors remain unseen. Consumers may have a vague notion that companies gather their personal data, yet few have a clear idea about who collects it and how they use it. This book attempts to shine a light on some of the most interesting data gatherers, showing just how pervasive data gathering has become in everyone’s daily life. Some firms let customers know they gather information about them and offer significant benefits in return. Others hide their names and whereabouts as they gobble up whatever facts they can.

Revelations about the US National Security Agency and its ability to gather information from our electronic communications illustrate the government’s vast capabilities to amass information about us all. But experts believe that the US government does not keep detailed dossiers on every citizen with in-depth personal information accessible at the click of a mouse. Certainly, if the government has reason to gather the information, it has the ability to vacuum up a lot of data about us.

This book is not about those capabilities. It is about how data emerged to become the lifeblood of private industry, the elixir that fuels marketing efforts to compete and expand their businesses. The NSA and the FBI are not interested in the great majority of citizens. Nor do they profit from data. And, however imperfectly, they are subject to governmental, congressional, and judicial oversight. They can be called to account.

By contrast, private companies regularly assemble detailed individual profiles on millions upon millions of people with only minimal restrictions. Data collection has become widespread and extensive in recent years. Companies have fine-tuned efficient methods of gathering information about the lives of others that would make the Stasi green with envy. The land of the free, fueled by the spirit of free enterprise, has become the greatest data collector of all. If you live outside the United States, this trend is making its way to your door any day now, if it is not already in full bloom.¹

And data collected by the private sector does end up in government hands through sophisticated snooping, the 2013–14 revelations about the NSA show. The NSA and law enforcement agencies—and presumably their foreign equivalents—tap into Google, Facebook, Yahoo, Internet providers, and others to scoop up vast troves of information about us, sometimes without the consent of the companies.

When I visited East Germany all those years ago, I was not producing a continuous stream of electronic data about my activities. If the Stasi wanted to know more, they had to follow people and monitor conversations the old-fashioned way, perhaps by having agents sitting for long hours around cafes and restaurants, or tapping into phones. In the Internet era, why send ten agents out to trail someone when electronic footprints stored by private firms provide a far richer portrait of that person’s activities?

Something as innocuous as playing the game Angry Birds can help the government gather more information on users through their smart phone apps, 2014 revelations from Edward Snowden’s documents show.² The mobile app for that and other games acquires user data such as contact lists from Facebook, LinkedIn, and other sites as well as location data. US and British officials tapped into such information to learn more about potential terrorism or other suspects. Rovio, the maker of Angry Birds, issued a public statement in response suggesting the US and British governments also tap into Internet advertising networks, which monitor who visits what websites to help companies decide where to place their ad messages.

“The alleged surveillance may be conducted through third-party advertising networks used by millions of commercial websites and mobile applications across all industries. If advertising networks are indeed targeted, it would appear that no Internet-enabled device that visits ad-enabled websites or uses ad-enabled applications is immune to such surveillance,” Rovio said.³

Governments also turn to data brokers and other companies to supplement their own files because the private-sector data collection is so extensive. Sometimes government agencies such as law enforcement pay for such data. In other cases, according to the NSA documents made public by Snowden, they just take it covertly. Clues to relationships, ailments, sexual orientation, religious and political affiliation, and other intimate details are easier than ever to discern, both for the private sector and for government.

Who are these people in the private sector gathering our data? This book will tell some of their stories. Overwhelmingly, they use our data for legitimate business purposes, essentially to market their products. Some consumers like the personalization that all this data allows, because it provides items or services of interest to them. Others bemoan their diminishing privacy even as they embrace the rich cornucopia of the Internet.

At the same time, there is a darker side. Some firms make money off the misery of others, and this book will tell some of these stories as well. Shaming has never been more profitable or easy. Sites promoting revenge porn, slanderous reviews or gossip, or arrest photos that shoot to the top of Internet searches strike many people as just plain wrong. The ever greater ability to assemble such information is something to be concerned about.

“You can reconstruct, like, my whole day—not just my whole day, but for everyone you can reconstruct at a very fine level of detail what they have been up to, what they are doing, and so on,” says Vitaly Shmatikov, a University of Texas computer scientist. “Of course, at the moment it requires aggregation of multiple databases and nobody is doing it—I hope. But the technical capability is there. So you’ve got to wonder what could come out of there.”

This book does not directly profile some of the biggest data hunters, such as Facebook, Google, Amazon, and other Internet giants. One reason is that their ever-evolving practices are widely and minutely chronicled on many websites, in the media, and in other books. Another is that their data gathering is often more obvious. If you share details about your life on Facebook or other social media, they will know lots about you. Google and Amazon are such major Internet presences that they have great insights into people’s behaviors.

Yet these companies, especially Facebook and Google, return again and again in this book because they cast such a long shadow across the business of personal data. Chapter 9 looks at some less obvious features of Facebook, such as how clues from your friends and “likes” can reveal intimate details about you. Facebook returns in Chapter 11, which discusses casino surveillance. Google searches and advertising play a vital role in the success of the people-search websites in Chapters 6 and the mug-shot websites detailed in Chapter 12.

The Freedom of Old Las Vegas

After researching three editions of the Eastern Europe guidebook in the second half of the 1980s, I spent five years in Russia in the 1990s as a correspondent. I arrived shortly after the collapse of the Soviet Union, symbolized by the moment when protesters toppled the statue of the secret police founder in front of KGB headquarters. But despite the high hopes of many, the clumsy first steps toward democracy led to an economic depression, and many people lived in grim poverty in those early post-Soviet years. Life in the frigid Russian capital at the time often appeared gray and dreary.

One winter during those years I left the deep frost of Moscow and visited Las Vegas for the first time. The glow of the winter sun, the glare of the neon signs along the Strip, the energy of nonstop entertainment, the frenetic spending of money—the whole atmosphere dazzled me. In particular, I remember the opulence of Caesars Palace—its vast casino, endless shops and restaurants, its colorful history with legendary performers such as Frank Sinatra, the skimpy white togas of the waitresses.

In those years, I felt such freedom in returning to America. Communist and early post-Communist countries seemed a world apart. It was fascinating to spend time in that part of the world, but it always felt a bit strange to be a person of interest, someone whose activities attracted attention from others both seen and unseen. One breathed freely and easily on holiday back in the United States, a place where few cared or noted what you did.

In Las Vegas at that time casinos did not ask for my name or any other information about me. I did not sign up for a loyalty program, so the casino had no idea who I was. You put money on the table and they gladly accepted your business, no questions asked. Practiced dealers kept a keen eye on players and manually calculated which high-spending guests might deserve a free meal or room. Lower-end players came and went without garnering much attention. What happened in Vegas stayed in Vegas.

A lot has changed since then.

1

What Happens Here, Stays Here?

The Myth of Sin City

The September 2001 attacks on the World Trade Center and Pentagon thousands of miles away delivered a tough blow to Las Vegas too. After such a tragedy, vacationing in Las Vegas felt frivolous, even disreputable. Many feared Sin City, as a symbol of capitalist excess, could itself become a terrorist target.

Like a champion boxer hit by a stunning blow, Vegas stumbled before it came back roaring with its “What Happens Here, Stays Here” advertising campaign. One TV spot that captured the public imagination showed an attractive young woman flirting with a series of men; to each one she introduced herself by a different name. Another showed a group of women riding in a limo, giggling wildly about some adventure they had just enjoyed. Yet another advertisement opened with a church wedding as a pastor asked, “If anyone present has reason to believe these two should not be wed, let them speak now or forever hold their peace.” The camera panned slowly across the worried faces of bridesmaids and groomsmen. An awkward pause filled the church as friends and family looked around uneasily, until the pastor relieved the tension: “No one? Okay, moving on.” At the end of each advertisement appeared the slogan “What Happens Here, Stays Here.”

It became a national catchphrase, often altered to “What Happens in Vegas, Stays in Vegas.” Oscar Goodman, elected mayor in the boom times two years earlier, said the campaign was born of necessity as casinos started laying off thousands of workers right after the 9/11 attacks. “We started to think in terms of what could attract people to Las Vegas: an adult playland. That’s when that change from the family destination came,” he said. “And that slogan was a slogan basically of freedom, that people should leave their cares and woes wherever they came from, they could come to Las Vegas and have a good time without any guilty conscience and then return to the aggravation of their own town.”

Visitors on Las Vegas Boulevard. Source: Author photo.

* * *

Throughout its history, Las Vegas has encouraged outrageous behavior. The city promises guiltless eating and drinking, sex, and gambling. And discretion. Casinos do not ask where anyone’s money comes from, and dealers might not even utter a client’s full name for many years.¹ Casinos whisk their VIP gamblers into private rooms beyond public view.

In the early years of the “What Happens Here, Stays Here” campaign, Facebook and Twitter did not exist. Internet data brokers selling profiles and criminal records about all Americans had barely started to appear. Smart phones and tablet computers ready to snap compromising photos were not ubiquitous. Of course, the limitless freedom to behave badly without consequence never really existed. But back then, it was easier to believe that it might.

During the early years of the ad campaign, I worked as the Reuters bureau chief in San Francisco and frequently visited Las Vegas. In early 2008 I followed then-Senator Barack Obama as he toured the employee areas below the MGM Grand Hotel on the Strip, hoping to win votes from unionized employees in the Democratic presidential caucus. Sensing a bad photo op that could offend voters who did not approve of gambling, he, Hillary Clinton, and other candidates avoided the casino floors. I was intrigued to peer into the vast lower complex hidden from hotel casino guests. Here thousands of workers dine in their own cafeterias, pick up uniforms from massive dry-cleaning operations, prepare meals for guests, and do all the tasks it takes to keep a hotel with thousands of rooms running smoothly.

On another visit to Las Vegas I met Vera Rhodes, who was attending a swingers’ convention. A woman in her fifties who said she was a virgin until her marriage at age thirty, Rhodes said she was making up for lost time during the convention’s late-night parties. I asked if I could quote her by name in an article. Then, personal data was not as widespread on the Internet. She said fine. Now, years later, Internet searches for her name still turn up her enthusiastic description of her nocturnal exploits. In 2014, I decided to see if I could find her again, even though I had no contact details or clues about her whereabouts eight years later. An Internet search found data brokers offering to sell her address, phone number, and other details for a few dollars—a relatively new development described in Chapter 6.

In the Internet era, it is getting ever harder to keep personal information—what happens in Vegas—to stay in Vegas.

The Inner Sanctum

What changed over the years since I first visited Las Vegas is that businesses everywhere started collecting as much information on their customers as possible. With a lot of money at stake, casinos played an important role in expanding the corporate use of customer data. Starting in the late 1990s, a self-described math nerd became the driving force behind Caesars, making them a widely admired engine of data collection. Boosted by vast banks of computers, Caesars today know the names of the vast majority of their clients, exactly how much they spend, where they like to spend it, how often they come, and many other characteristics. They even know exactly where many of their customers are at any given moment—whether they are sitting at a specific Wheel of Fortune slot machine or playing blackjack in the wee hours of the morning. They gather all these details with the consent of those who choose to participate in their loyalty program.

Gathering so much data about customers has proved enormously lucrative. Caesars Palace evolved into the headquarters of the world’s largest casino company, called, naturally enough, Caesars Entertainment. Executives from many industries looked to the company and its CEO, Gary Loveman, to understand how gathering information about customers could boost the bottom line.

In 2012, I returned to Las Vegas to ask Loveman’s permission to peer into the secretive world of data gathering at Caesars Palace, located at the fifty-yard line of Las Vegas Boulevard, the famous Strip. After navigating through a maze of slot machines, restaurants, cafes, and lobbies, I found the correct bank of elevators for the executive offices. I had expected to find the bigwigs occupying the penthouse level overlooking their empire. But I was told to make my way to the mezzanine level. A lone receptionist to one side greeted visitors after they passed through a set of glass doors. She buzzed me into a separate, spacious antechamber. I watched as a waiter in tails trundled by pushing a food cart, a shiny silver dome covering the CEO’s meal.

View of Las Vegas Boulevard, the Strip. Source: Author photo.

Las Vegas had become a vast data collection machine. Because of the huge amount of money at stake, casinos have used customer information to innovate in a wide array of activities, including direct marketing, loyalty programs, surveillance, and photo recognition technology. Sin City is also a major source of public records because more couples marry here than anywhere else in the United States. If things do not work out, Nevada has long made it easy to split up, and divorce records provide even more information that ends up in public dossiers. Powered by fast computing and cheap storage, businesses from corner stores to international conglomerates gather information about clients from many different sources. All told, private firms, whether in Las Vegas or elsewhere, know more about us, including our intimate secrets, than ever before.

After a few minutes I followed Loveman’s assistant along the same path of the waiter. A tall wooden door doubling as a wall in the antechamber slid to the side, and we proceeded to a windowless conference room with wood-paneled walls. Loveman arrived and took a seat in front of his lunch. The CEO had a bit of a baby face although he was in his fifties. Broad-shouldered and oversized enough to require an extra-wide jacket, Loveman was a commanding presence. With a deep sonorous voice, he apologized for dining solo. But, he explained, he did not have time for a proper lunch on that busy day.

He gave the impression of not suffering fools gladly, so after some small talk, I got to the point: I asked if I could follow Caesars from time to time over the course of a year to study how they collected data on their clients. Initially, he expressed some caution.

He had good reason. He had navigated several difficult years. Many casinos had suffered a losing streak following the 2008 financial crisis, but Caesars had taken an especially heavy blow. Revenue had fallen from a peak of nearly $11 billion in 2007 to $9.1 billion the next year and, as things turned out later, would end up stuck in the range of $8.5 billion in 2012 and 2013.

The drop alone was bigger than the annual GDP of entire small nations. For all the company’s cleverness in mining customer data, it remained many billions of dollars in debt. Some people wondered if mighty Caesars would ultimately have to declare bankruptcy. A more conventional CEO might have shooed away a writer at such a time. But Loveman decided to gamble. He agreed to allow me to see what happened in his corner of Vegas.

2

A Harvard Professor Comes to Vegas

A Business Professor Rolls the Dice

No one would have ever wagered that someone like Gary Loveman would end up fitting into the casino boss shoes once filled by the likes of Benjamin “Bugsy” Siegel and Frank “Lefty” Rosenthal. Loveman did not grow up in the shadows of the casino world or dream of palling around with the Rat Pack. In fact, through his thirties, he had only once even set foot in a casino, in Monte Carlo, the setting for the first James Bond novel, Casino Royale. His encounter with the European version of gaming did not convert Loveman into a regular gambler. He lived in the Boston area; the world of gambling was remote. In any case, wagering invokes the uncertainty of chance. Loveman preferred the exactitude of math and data.