The predatory gambling industry does not always readily admit that the vast majority of their profits come from a small portion of their customers. However, in this article from the Chicago Tribune below, a casino marketing officer does just that. The reporter writes that “managers are…pushing casino membership, with special previews this weekend for VIPs and Des Plaines residents who were the first to join the club.” Typically, marketing officer Suzanne Trout said, members make up 20 percent of casino clientele but generate 80 percent of the revenue.” They know who the out-of-control gamblers are in their facilities.
Predatory Business Practices
The Tobacco and Predatory Gambling Industries Partner Up (in Secret) to Make Huge Profits
In August 2011, the Reno News and Review publishing the article below detailing how two local Chambers of Commerce in Nevada served as front groups for an influential study that was secretly paid for by the tobacco industry. Since its publication in 1996, the study has been cited repeatedly by the predatory gambling industry in its argument to oppose smoking bans in casinos. It partnered with the tobacco industry to ensure that both would continue to make huge profits of the misfortunes of their customers. This information came to light with the recent publication of the book Casino Women by Susan Chandler and Jill B. Jones.
Smoke and Mirrors – Big Tobacco and Big Casino Sold Nevadans a Bill of Goods
By Misleading Players, Slot Machine Design Spurs Problem Gambling
This article explains how reel electronic gambling machines (EGMs) have been designed to mislead players and have directly contributed to the high rate of problem gambling: “Unbalanced reel design must be a major factor, if not the major factor, in the maintenance of problem gambling principally because the gambler unconsciously believes he or she cannot lose.” Unlike table games, EGMs offer widely different odds of winning, which the authors compare to loaded dice or rigged carnival games. “The fact that the players do not know the rules makes the reel gambling machine unique amongst gaming devices. Not only are the players ignorant of the rules but the rules vary from machine to machine and neither the gaming industry nor the regulators disclose them. As far as transparency is concerned, the standards applicable to reel gaming machines are totally out of step with all other forms of gaming.” The authors make a strong case for establishing uniform standards, banning biased, “virtually-mapped” reels on EGMs and providing more transparency regarding the player’s chances of winning.
Foxwoods Casino Targets Repeat Gamblers
We know from Wall Street Journal reporter Christina Binkley that casinos make 90% of their profits from 10% of their customers. So, it’s no surprise that Connecticut’s Foxwoods Casino has developed a new business strategy to entice it’s “loyal” customers to gamble more of their money away, particularly those “customers living within 90 minutes of the…property.”
Australia Attempting to End Electronic Gambling Machine Tricks
Australia Senator Nick Xenophon is trying to stop certain features of electronic gambling machines (or “pokies” as they are known in that country) that trick players into thinking they have won, when they really have lost. Senator Xenophon is also requesting that the industry release machine probability accounting reports.
Problem Gamblers Can’t Judge the Cost of Electronic Gambling Machines
According to the Australian Productivity Commission, people often underestimate how much people spend on various items, like transportation, clothing, etc. “For gambling, if we say we have spent $100, on average we have really spent $735. Then there are the pokies [electronic gambling machines]. On average, if pokie players say they have spent $100, they have actually spent $3448. That’s not a misprint: they are apparently aware of just 2.9 per cent of what they are losing.” Would receipts or a record of spending help people become more aware of how much they spend? Absolutely.
Problem Gamblers Can’t Judge Cost of Electronic Gambling Machines
The Effects of Predatory Gambling in Maryland
This May 2011 report from the University of Maryland, Baltimore County studied how Maryland residents have been affected by the many forms of predatory gambling now available in the state including slots, the lottery, and horse racing. The most significant finding was that individuals in the 18 to 29 age group appear most at risk of developing gambling problems. In addition, researchers found that “being male, single, African-American or other races (primarily Hispanic) are associated with an increase in the odds of being at risk for problem/pathological gambling. Most problem/pathological gamblers travel 6 to 15 miles to gamble, typically spend over 6 hours gambling during a single session, and generally gamble with others not related to them.”
Government-Run Gambling Bigger Than Organized Crime
Should our democratic institutions be competing with organized crime for revenue? Philadelphia Inquirer columnist Monica Yant Kinney discovers an important distinction between illegal underground gambling and government-sponsored predatory gambling: “Bookies don’t prey on gamblers. Bookies don’t solicit. Gamblers find them.”
This lies in stark contrast to state governments using taxpayer money to solicit our fellow citizens to play the lottery and providing tax incentives to allow casinos to come to town.
“I Have a Feeling…I Can’t Quite Pinpoint the Research”
This April 2011 article from the Philadelphia Citypaper reports on Sands Bethlehem (PA) Casino president Robert DeSalvio testifying before the Pennsylvania Legislature that sending monthly statements to gamblers about their losses will violate privacy and may encourage citizens to gamble more because it will remind them about their loss, potentially creating the urge to chase. When asked what the basis of his claim was, he responded: “I have a feeling…I can’t quite pinpoint the research.”
Casinos spend hundreds of millions of dollars every year to build the very best information databases on their gamblers, allowing them to send all kinds of predatory marketing materials – often in real time – with the specific intent of getting the gambler to chase. DeSalvio’s testimony was willfully dishonest.
Poker Bots and Cheaters Make Online Gambling Even More Predatory
In the summer of 2010, one the world’s leading online predatory gambling companies, PokerStars, refunded $2.1 million to its customers after discovering cheaters colluded to rig games. In another incident, PokerStars paid out another $80,000 to players who had unwittingly been up against poker “bots” – automatic card playing software. These bots are causing people to lose even more money than normal. Click on this link to the story and the podcast from BBC Radio 5. You will need to scroll halfway down the page to obtain the podcast.