Stop Predatory Gambling

The scales of justice crash over for casinos

by spgadmin

Liz Benston of The Las Vegas Sun provides an interesting glimpse into the debt collection practices of the most predatory business in America. Benston writes:

Nevada casinos commonly grant credit to gamblers who provide evidence of sizable bank accounts to cover the IOU — or if they have a credit history with the casino that indicates debt repayment. By signing markers, the gambler essentially receives an interest-free loan from the casino with flexible terms. That makes them unusual in the business world and a unique risk for casinos, which write off as much as 5 percent of their debts — sometimes amounting to millions per year — as uncollectable. Big casinos might have hundreds of unpaid markers in the collection process at any time.

Although a gambler’s first marker triggers an application process and a bank inquiry akin to taking out a personal loan, subsequent markers involve little paperwork other than a check of the person’s gambling history with Central Credit, a credit reporting bureau for the casino industry.

In some cases, casinos will extend gamblers additional credit after they get a nod from a casino host, who is eager to keep the customer gambling — and whose pay depends in part on what the customer loses at the tables.

Generosity in offering markers is a key casino marketing tool on the Strip, where as much as 40 percent of wagering volume occurs on credit, said Jeff Voyles, a casino management professor at UNLV and industry consultant. Well-heeled gamblers may prefer signing markers for the convenience of not having to carry cash, with their casino credit showing up on pit bosses’ computers.

To avoid antagonizing players and keep them coming back, casinos generally give gamblers several months to repay debts that can run into the hundreds of thousands of dollars.

But when they don’t, casinos send a demand letter and can turn to the district attorney’s bad-check unit, which prosecutes such crimes. Or they may file a civil suit, sometimes in addition to prosecution.

Some gamblers refuse to pay because they feel they were mistreated by the casino or want to get back at the place where they lost their shirt, said Greg Knapp, who ran the bad-check unit until 2005. Those gamblers, he said, sometimes try to game the system by delaying payment — while paying their attorneys tens of thousands of dollars on their defense.

Marker cases can be thorny for prosecutors, he said.

“Theft is a crime of specific intent. I don’t think anyone takes out a marker with intent of losing and not paying it back.”

“These are people who take risks and play wilder than the rest of us,” Knapp said. The economy plays a role, he said, as some gamblers have lost their means of repaying the debt when the stock market fell or in real estate investments gone sour.

Casinos create their own problems, Knapp added, by overextending credit and relying on the district attorney to clean up the mess. Some clients have received hundreds of thousands, even millions’ worth of credit when the casinos knew the gambler owed money at other Las Vegas resorts, he said.

“Why is a casino extending credit without knowing whether the person has the funds to pay it? That’s pretty stupid,” Knapp said.

Well, Mr. Knapp, that’s a good question. Here are a few other questions for district attorneys and state attorneys general to ask: Why are the casinos allowed to give markers at all? What other business is allowed to give free alcohol with one hand while issuing loans with the other hand? Who regulates Central Credit, a credit reporting bureau for the predatory gambling business?

It is truly remarkable that the government acts as a debt collector for the casinos especially knowing that besides hot air and some free comps, the casino did not actually give anything to the gambler but a few hours of action. When it comes to casinos, our justice system is broken.