An iPhone-based card-counting system recently turned up in a California Indian casino. This new application is causing a lot of fuss, and Nevada gaming regulators have issued a general alert about it, warning Las Vegas casinos about its potential use in gameplay.

Want to count cards at a US casino? The consensus seems to be that "skilled players" can count cards all they want; it's not illegal. If you do so in Vegas, however, the casinos may choose not to do business with you. Apparently, casinos will "back off" expert counters, i.e. show them the door, or possibly direct them to a less skill-based, more profitable gaming arena.

I turned to my brother-in-law Lorenzo, the MIT-trained blackjack aficionado for clarification. "Card counting isn't illegal (how can thinking be illegal?)," he wrote to me, "but Las Vegas casinos can (and will!) throw you out if you're too obvious or too successful at it. You're playing their game on their turf by their rules, and they don't need to prove you've done anything wrong to throw you out and bar you from coming back."

That's not the case across the country. In New Jersey, the case of Uston v. Resorts Internation Hotel Inc was decided in the gambler's favor, as the state Supreme Court ultimately ruled that Atlantic City casinos could not bar skilled players. It's different in Las Vegas—they can bully, harass, and back off customers so long as they stay within certain legal boundaries.

According to Lorenzo, the Nevada casinos are walking a fine line. He tells me that casinos love the fact that blackjack is a game that is theoretically in the player's advantage. This makes it popular and brings in a lot of incompetent players. At the same time, they hate the fact that a few very skilled people can take a lot of their money. "They're not going to throw you or me out when we're betting $2 to $5 at a time," he wrote, "even if we're counting well, but they'll throw out the guy who bets $2 when the house has an advantage and $2,000 when the house is at a disadvantage."

So when it comes to Las Vegas, while thinking isn't technically illegal, casinos can and will choose to kick you out when you think too much or too well. But using assistive devices? That is definitely illegal pretty much everywhere, whether you're gaming in NJ, Nevada, or California. In Nevada, you can count in your head all you want, but the second you start using technological assistance, you've crossed a line and are committing a felony.

The Indian casino that first discovered the iPhone-based counting system alerted the California Bureau of Gambling control, which in turn sent out alerts to Nevada and other commissions around the country. In response, Nevada gambling regulators today are warning casinos to be on the alert for iPhone-based card counting utilities.

Nevada takes gambling cheats very seriously. And this is apparently a very serious counting application. It operates in several modes, including a "stealth mode" where the screen is blanked, and can be operated by touching different zones on the screen. It can use up to four separate strategies for card counting. Although I haven't seen or tried it myself, I am tickled by the ingenuity that apparently went into this app's design.

In Nevada, each casino makes its own rules regarding the policing of electronic devices at gaming tables. Obviously not all devices are used to give players advantages. I'm sure it's nice when you can call the wife on your cell phone and say you'll be a little late returning to the hotel room, for example.

Casinos are well aware of the hazards though. Harrah's Entertainment banned the iPhone at the World Series of Poker shortly after the iPhone debuted. With this latest system exposed and the flexibility and programability of smart-phones on the rise, you can expect more crackdowns on electronic device use near the gaming tables.

Hat tip to TUAW