Stop Predatory Gambling
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When will state Attorneys General go after the business practices of government’s gambling program?
by Les
In 2006, prior to the massive crash of the highly-predatory subprime lending business which nearly every state Attorney General sued for their predatory practices, Harrah’s top executive Rich Mirman boasted to Wall Street Journal reporter Christina Binkley: “I worked in the subprime lending industry. At least casinos are open about what they do.”
Here are some excerpts taken from an excellent analysis “about what they do” by John Riberio who heads the group Friends of Suffolk Downs:
….I want to provide you with some insight on the business practices of the casino industry. I am confident that you are not aware of these practices, as they are the “dirty little secret” of the industry.
I work in the field of Business Intelligence. I design databases that companies use to collect information about their customers and prospective customers. The data collected are used to decide how to promote their products or services to their patrons. In other industries, this is a relatively benign practice as it simply allows companies to match up customers with products and promotions. The hope is that those targeted consumers will spend their money more frequently at their establishments as opposed to their competitors.
Financial institutions also take advantage of this information in order to decide what banking, lending and investing products to offer to their own customers and prospects. This is why we receive unsolicited credit card offers in the mail.
As financial institutions, the casinos will have access to all of an individual’s financial information. They leverage this specialized status and “loyalty programs” to gain specific knowledge about how much cash and credit a patron has access to, when they use their credit cards in the casinos. The industry calls this Total Cash Availability. Additionally, they will also be able to find out how much equity a patron has in their home, car and other assets; this is called Global Cash Availability. These can and will be taken as equity in exchange for credit. Casinos will also extend what amount to payday loans at high interest rates. These will be offered to patrons who are under the influence of alcohol, alcohol, that the casinos will be able to offer free of charge.
The casino industry uses all of this information along with real-time game-play data to make targeted offers to specific people. They are also able to alter the payout rate and the “near-misses” seen by each person to increase their rate of play and the amount per play.
Governor Patrick, you have acknowledged that there will be more addicted gamblers created by the advent of casino gambling in Massachusetts. I’m sure we would disagree on the total number but you should understand that this legislation allows the casinos to offer loans directly to those who have been drinking. Our state is still trying to recover from the sub-prime mortgage lending scandal. Does it really make sense to introduce an industry that will prey on people by offering them loans while they’re intoxicated?
Casino industry experts will tell you that they only need to provide loans to “high rollers”. This is disingenuous. The legislation does not provide any income threshold or guidance. All patrons are fair game.
Below are three links, which show how the casino industry collects and uses the financial and game-play data to identify patrons who can be tapped for more revenue.
1) The video linked below shows that casinos have access to all of your financial information as well as transactions outside of the casinos as soon as you use your credit or atm card in one of their machines.
2) This link is a promotional page which brags about this software’s ability to identify “the most profitable customers and those which can be ‘tapped’ for additional revenue and profit.” This software identifies these gamblers while they are playing and helps identify them for promotions. This software targets people to ply with free liquor. It is not a random offering.
http://www.bis2.net/solutions/
3) The following is a link to a patent for a “METHOD AND SYSTEM FOR DYNAMICALLY AWARDING BONUS POINTS.” It also describes in detail how machines can be dynamically reconfigured to generate more revenue while they are being played by increasing the rate of play and reducing payouts.
http://www.faqs.org/patents/
Let me be clear. The methodology is as follows:
1. The casinos identify their patrons and prospects according to their potential value to the casino.
2. The casinos monitor the play of those patrons and determine when to offer them free alcohol to maximize their spend on the games.
3. The casinos then dynamically alter the speed at which the machines play and the rate at which they pay out to increase the profit they are making on a specific player.
4. When the player has exhausted his or her resources on hand, the casinos extend them credit.
Dear Governor Patrick, this is only the tip of the iceberg. This industry uses this data to manipulate payouts at slot machines to coincide with show times. It also uses this data to identify patrons who may be slowing down their play and who may increase their play if they were provided with a free drink or two.