Predatory Business Practices

Misrepresented Game Outcomes and Problem Gambling

This research by Prof. Kevin A. Harrigan at the University of Waterloo looked at how slot players’ perceptions were influenced by a technique that has been used since 1983 in North America, called “clustering.” By observing the player perceptions (the frustration effect, the perception of early wins, illusion of control, biased evaluation of outcomes, entrapment, and irrational thinking) as well as looking at transcripts from Nevada hearings where proponents were aware of the psychological effect on players from near misses and virtual reels, the researchers raise concerns over the connection with misrepresented game outcomes and problem gambling.

Slot Machines – Pursuing Responsible Gambling Practices for Virtual Reels and Near Misses

CkirbyMisrepresented Game Outcomes and Problem Gambling
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Slot Machines: Distorted Player Views of Payback Percentages

This paper by Prof. Kevin A. Harrigan at the University of Waterloo presents a sample three-reel three-coin slot machine game with a bonus for three coins, and a true payback percentage of 85.6% when one or two coins are wagered and 92.5% when three coins are wagered. The player sees the winning or losing combination of three symbols on the payline as well as (a) the physical reels as they scroll by and (b) what is just above and just below the payline at the end of play.

Slot Machine Structural Characteristics

CkirbySlot Machines: Distorted Player Views of Payback Percentages
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The Design of Slots and the Implications for Problem Gamblers

This research by Prof. Kevin A. Harrigan at the University of Waterloo examines characteristics of Ontario slots and what the implications are for problem gamblers, including analysis of the probability accounting reports (or PAR sheets) to see how the games are designed. One of their key findings include: “Bonus modes are highly salient environments associated with wins that are in the view of the gambler a very good place to be. Because entering these arousing and highly rewarding bonus environments is rare, only those who gamble frequently will become classically conditioned to these environments and experience the combined effects of operant and classical conditioning – a situation that could preferentially target problem gamblers.”

PAR Sheets, Probabilities and Slot Machine Play – Implications for Problem and Non-Problem Gambling

CkirbyThe Design of Slots and the Implications for Problem Gamblers
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Texas Lottery Study Shows the Lottery Squeezing More Money Out of a Smaller Amount of People

This Texas Lottery Commission report finds that the percentage of Texans using the state’s lottery has plunged to one-third, the lowest level ever measured. The decline in fiscal 2010 — from 41.7 percent of residents to 33.8 percent — represents the second-largest year-to-year decrease since the Texas Lottery started in 1993. Yet despite this massive drop, the total amount of money spent on Texas Lottery tickets has held steady, which means a smaller amount of people are spending a lot more on tickets. It explains why Texas sells a $50 scratch ticket.

Texas Lottery Demographics Report 2010

LesTexas Lottery Study Shows the Lottery Squeezing More Money Out of a Smaller Amount of People
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Costs and Treatment of Pathological Gambling

This study by Henry Lesieur from the Annals of the American Academy of Political and Social Sciences found that pathological and problem gamblers account for an average of 30.4 percent of total gambling expenditures in the four U.S. states and three Canadian provinces he examined (the low was 22.6 percent, the high was 41.2 percent in Louisiana). The study identified which games were associated with problematic play and identified “video machines” (as opposed to old-style slots) in that group. Lesieur concluded: “When a state decides to shift from lotto to instant or scratch lottery tickets to video machines as a revenue-raising measure, it is taking a greater and greater percentage of money from problem gamblers.”

Costs and Treatment of Pathological Gambling

CkirbyCosts and Treatment of Pathological Gambling
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Caesars Riverboat Casino v. Kephart

In October 2010, the Indiana Supreme Court ruled against a woman who said an area casino preyed on her gambling addiction. Jenny Kephart filed a lawsuit against Caesars Indiana in 2007 after the casino sued her to recover $125,000 that she lost in a single night of gambling in the year before. The casino is now Horseshoe Southern Indiana.

Kephart said the casino enticed her to gamble with free meals and rooms as well as money on credit. The casino even sent a car to drive her from her home in Tennessee to the Indiana casino.  Below are the legal briefs from Caesars Riverboat Casino v. Kephart.

Caesars Riverboat Casino v. Kephart – Appellant Brief

Caesars Riverboat Casino v. Kephart – Brief of Apellee

Caesars Riverboat Casino v. Kephart – Appellee’s Petition to Transfer

Caesars Riverboat Casino v. Kephart – Appellee’s Petition for Rehearing

Caesars Riverboat Casino v. Kephart – Appellee’s Petition to Transfer Reply Brief

Caesars Riverboat Casino v. Kephart – Appellant’s Brief of Response to Petition to Transfer

Caesars Riverboat Casino v. Kephart – Reply Brief of Appellant

LesCaesars Riverboat Casino v. Kephart
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Report finds that 60% of gambling machine revenue was derived from problem gamblers

This report prepared for the Ontario Problem Gambling Research Centre found that 60% of machine revenue was derived from problem gamblers and that 35% of total gambling revenue was derived from moderate and severe problem gamblers.

The Demographic Sources of Ontario Gambling Revenue

CkirbyReport finds that 60% of gambling machine revenue was derived from problem gamblers
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Casinos Use Surveillance to Help Only Their Profits, Not Their Patrons

This Associated Press story shows the reality of the use of video surveillance in casinos. While many may think they are safe at a large, well-known casino, this story tells that the many cameras installed are used not to help secure the safety of casino hotel workers and patrons, but for making sure no one is cheating while playing their games. This just goes to show where casinos’ priorities really are.

2013 In Vegas, eye in the sky guards money, not guests

LesCasinos Use Surveillance to Help Only Their Profits, Not Their Patrons
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Natasha Schull writes about the design and technology behind electronic gambling machines in Washington Post

MIT Professor Natasha Schull writes about the design and technology behind electronic gambling machines in this must-read Washington Post essay.

Beware -Machine Zone Ahead

LesNatasha Schull writes about the design and technology behind electronic gambling machines in Washington Post
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