And yes, the casino owners were under the belief that the machine worked correctly, and the people in question initiated monetary transactions with them while omitting their knowledge that said machines were not, in fact, working correctly. This is deception even if you ignore the fact that the transaction occurs with the explicit, posted stipulation that payouts from machine errors are void.
I mean, seriously - by your logic it would be okay for the casino owners to just silently make every other transaction have a 0% probability of winning, ripping off customers who expect a chance at a payout, as long as the customer never specifically asks them about it. If you discover a machine is either broken (ie. an accident) or intentionally set up to steal your money (ie. fraud), wouldn't you want your money back? There is an implicit contract in any financial transaction; in this case, that the machine works as intended. The owner is protected by this as much as the consumer is.
They make no mention of public transportation because that would point a finger at one of the many gaping holes in their premise. Constraining your problem areas to a very tiny subset does not make your research any more valid...
Hahahahahahaha hahaha.... Hahahaha... Wait a second while I peel myself off the floor here. Heh... Okay, what was that you were saying about private transportation being a tiny "very tiny subset" of people's transport usage? Also, the equation you gave your third-grader is wrong; you need separate variables for distance1 and distance2, and at that point the equation is not solvable until you do some research to determine what those distances would be in various real-world situations. Like, say, the research described in TFA.