Predatory Business Practices

Casinos spend millions in promotional gambling credits to lure citizens back and lose more money

Casinos are spending more and more money on “free play” promotional credits, which lure players into the casino only to lose all the money from the credit plus some of their own cash. Casinos figure that if they send you a $25 free play credit and you come in to the casino and cash it in, by the time you leave you’ll have given back well over that $25. That is part of the reason why, according to this Press of Atlantic City story, casinos are now spending 40 cents of every dollar in profit on these promotional credits, to lure you in and take their money back.

Casinos spend 40% of winnings on comps

LesCasinos spend millions in promotional gambling credits to lure citizens back and lose more money
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Release of online gambling data shows that gambling to get rich is a bad bet

Bwin.Party Digital Entertainment, a major European online gambling company, released data on 4222 gamblers, and the math behind gambling win probabilities shows just how badly the odds are stacked against gamblers. Experts say these data figures are comparable to those of real casino here in the US, however casinos keep their data a heavily-guarded secret. The figures released show that statistically, the more you play, the more you’ll lose- the heaviest gamblers had only a 5.4% chance of ending in the black, compared with 17% of the customers who placed the least amount of wagers. Furthermore, the data shows that casinos and gambling operations rely mostly on problem gamblers for their revenue- 2.8% of the customers provided half of the company’s profits, and 10.7% provided 80% of revenue. This The Wall Street Journal article summarizes the findings.

2013 How Often Do Gamblers Really Win- New data provide some answers

LesRelease of online gambling data shows that gambling to get rich is a bad bet
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Poor citizens ride casino bus out of desperation to survive

A bus ride to a casino in the New York/Pennsylvania area is often accompanied by a free-slot play promotion, worth around $15-$45 of free play in a surrounding casino. This is meant to draw bus riders into the casinos, however, for some citizens like these poor New Yorkers, this is a way of life. Many citizens, desperately looking to make ends meet, spend their days riding casino buses for hours to collect free-slots play and often reselling the coupon for cash.

2014 Sands Bethlehem casino bus-hoppers beat odds using free money

LesPoor citizens ride casino bus out of desperation to survive
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Casino owners create image of a “community partner” to insulate themselves from the harm they inflict on citizens

When it comes to buying good will from the community and luring voters to support casinos in their city, casino interests use a multitude of methods to make themselves appear as if they are some kind of local charitable foundation. In this instance, the casino interests in Springfield, MA used tactics such as handing out diapers to citizens and sponsoring community pancake breakfasts to convince voters to support them, creating their own political machine with virtually no spending limit.

2013 Casino Operators Offer Pancakes, Diapers in Springfield

LesCasino owners create image of a “community partner” to insulate themselves from the harm they inflict on citizens
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Casinos don’t mess around when it comes to collecting debts

Commercialized gambling is based on getting people to lose far more than they can afford. One common tactic is to get citizens to chase their losses. Casinos like Foxwoods and Mohegan Sun often lend gamblers money interest-free because they know the players will inevitably gamble away all the money back to the casino. Then the casinos demand to be paid back for the money they lent! It’s a state-sanctioned business practice, often ensnaring people’s homes.. These two articles from WPRI (RI) and The Boston Globe describe the situation.

2014 CT casinos employ hardball tactic to collect debts

2014 CT casinos place liens on RI homes to recover debt

LesCasinos don’t mess around when it comes to collecting debts
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Through charitable donations, casinos attempt to buy the silence of community nonprofits

In their never-ending attempt to lure voters into believing that they are good for communities, casinos have begun to trot out charitable donations are evidence of their commitment to community. As usual, these claims are merely used to generate public goodwill, and are all in an attempt to make voters overlook the damage casinos have done time and again to their surrounding communities. This article from Nonprofit Quarterly takes the mask off this phony policy.

2013 It’s a Gamble- Casinos Offering Charitable Donations to Woo Voter Support

 

LesThrough charitable donations, casinos attempt to buy the silence of community nonprofits
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More and more “perks” added to try and trick Massachusetts citizens into supporting casinos

With a huge referendum vote coming in Massachusetts on casinos in November, casinos and their supporters are pushing harder than ever to trick citizens into supporting them. This article from the Concord Monitor explains the recent attempts by legislators in support of casinos to put more provisions in the casino law that make it seem like more money would be given to communities. However, when it comes down to it, these are just proverbial carrots being waved in citizens’ faces to make them support a policy that will, in the end, harm the community.

2013 In Massachusetts, casinos provide jobs, taxes, child care and skating rinks

LesMore and more “perks” added to try and trick Massachusetts citizens into supporting casinos
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Casinos use free enticements to lure seniors

This article from Psychology Today shows how casinos use offers for free services- such as a free room or meal- to trick seniors into playing. In some cases, when the gambler is addicted enough and has enough money, these free meals and rooms become free limo and jet rides from home to the casino. Such is the case with former San Diego mayor Maureen O’Connor who, throughout a decade of gambling, won and lost more than $1 billion, with a net loss of over $13 million. O’Connor, now 67 years old, says she had a brain tumor that may have been impairing her judgement at the time. This vulnerability was compounded when casinos began sending private jets to San Diego to bring her to play. Though the private jet case is an extreme, this principle of giving free stuff to seniors to lure them in is commonplace for casinos, as the article below explains.

2014 Casinos’ predatory practices are a test case for financial elder abuse

LesCasinos use free enticements to lure seniors
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Discover just how much the lotteries are taxing everyone who buys a ticket

Below is a chart that shows how your wages are taxed and hit with fees when you buy a Lottery ticket. It turns out “Lucky Joe” isn’t so lucky after all- over $10 of his original $13.82 is taken out for taxes and fees. Follow the path Lucky Joe’s wage takes when he buys a Lottery ticket and discover just how much the Lottery is taxing everyone who buys a ticket.

http://stoppredatorygambling.org/wp-content/uploads/2014/07/2013-The-Lottery-Wage-Drain-graphic.pdf

LesDiscover just how much the lotteries are taxing everyone who buys a ticket
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The Big Swindle- the poor are the biggest losers in state lotteries according to Cornell study

Cornell University Economics Professor David Just, one of America’s top researchers into state lotteries, wrote a persuasive op-ed for CNN about who play the lottery and why. The link is below. Here is an excerpt:
“Those in poverty or near poverty not only are more likely to play the lottery than those with greater means, they also spend a larger percent of their money on average on these games of chance.
Some have argued that this may not be such a bad thing if the poor basically play the lottery as a cheap form of entertainment.
However, when we look for the telltale signs of entertainment behavior, they are absent.
We don’t see evidence that changes in the availability or price of other entertainment, movies for example, lead to changes in lotto purchases.
Rather, we find there are big jumps in lottery purchases when the poverty rate increases, when unemployment increases, or when people enroll on welfare.
Lottery playing among the poor is a Hail Mary investment strategy —a small ray of hope among the hopeless.
But this false hope is, by design, an attempt to lure the emotional decision -maker. Recent changes in the Mega Millions lottery have reduced the chances of winning in order to increase the size of the jackpot.
By changing the range of the six possible numbers drawn — from between 1 and 56 to between 1 and 75 –the already improbable odds of 1 in 176 million have diminished to a virtually impossible 1 in 259 million. Fewer big winners means larger jackpots, more hype and more
players. And more money for the lotteries.
Such changes have occurred as the lottery commissions have become expert in swindling players out of their money. Humans aren’t particularly good at dealing with risks and gambles. We tend to believe that rare events are more common than they truly are.
Moreover, we don’t discern between small changes in very low probabilities. Thus, few will have noticed that the odds of winning the lottery reduced from 0.000000006 to 0.000000004 for any given ticket. But our eyes are drawn to the steadily increasing prizes — prizes that are now designed to
eventually exceed $1 billion. Such astronomical amounts draw in even those who consider themselves very prudent.
Approximately one third of lottery winners will declare bankruptcy. This happens primarily because new winners are so unfamiliar with the magnitude of the money they have won, that they simply overestimate the purchasing power. How could I ever need to budget when I have several hundred million in the bank?
 
The overwhelming majority of lottery winners don’t believe they are better off for having won. One study finds that recent lottery winners have lower levels of happiness than do those who have recently become quadriplegic.”

2013 The big swindle- In lotteries, the poor are the biggest losers

LesThe Big Swindle- the poor are the biggest losers in state lotteries according to Cornell study
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