While experts from MIT and Harvard have testified repeatedly at legislative gambling hearings about the potential for addiction engineered into today’s slot machines – touched on earlier this year in an episode of 60 Minutes – a colleague who works in the field of Business Intelligence recently shared a letter he wrote to Governor Patrick explaining other predatory practices the gambling industry employs to separate slot players from their money.
(Keep in mind that slot machines account for about two-thirds of casino revenue.)
Like many other industries, the gambling industry collects information about their existing and potential customers to increase sales, encourage customer loyalty, develop marketing strategy etc. However, because casinos are ‘financial institutions’, they
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.
The letter provides three links which demonstrate “how the casino industry collects and uses the financial and game-play data to identify patrons who can be tapped for more revenue.”
The first, GCA Casino Share Intelligence
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.
The second is a promotional page for GameVIZ Software
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.
The third is a link to a patent for a method and system for dynamically awarding bonus points
which 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.
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.
While it’s convenient to dismiss gambling as a mostly harmless form of entertainment, effecting only a small percentage of people, fact is, the gambling industry is increasingly engaging in furtive, predatory practices that can quickly deplete an individuals or an entire family’s financial resources, for substantial profit – a large chunk of which it will turn over to the State.
Which isn’t the same as putting the milk at the back of the supermarket to get people to buy more Captain Crunch.
After everything Americans have endured at the hands of corporate predators in preceding years, is it really advisable for our State to partner with them at this stage in the game? In an age when people have mobilized in outrage over debit card fees, how are they going to feel about the State-sanctioned shell game casino billionaires will get to play with our bank accounts?
All that this market fundamentalism is about is letting people’s consciences off the hook. If the market is “just,” none of us is responsible for the havoc it may wreak. But the invisible hand of the market need not be free of ethical values, and ought not be.
Deval Patrick wrote that, in his memoir. And I couldn’t agree more. The test will be if he agrees, too.
…are casinos considered financial institutions, except perhaps by some twisted irony that actual financial institutions take risks with our money as if they were playing the slots like drunken sailors? They SHOULD be harmless entertainment to many if they acted more like amusement parks for adults, which is how I generally see them.
We cannot make law or determine public policy based on what we think things “should be” — we must instead deal with things as they are.
I am appalled that this administration and the Commonwealth are so eagerly pursuing this immoral (because that’s what it IS) plundering of the poor and desperate while being so unwilling to raise broad-based taxes.
There is no logic here. There is, instead, the scent of easy money readily stolen from drunken and hypnotized victims.
Welcome to twenty-first century Massachusetts.
It’s particularly good to know that when these players have exhausted their funds on hand, the casinos will extend them credit. That’s always been a good and responsible policy, which the credit card companies have employed for years. It’s high time the state finally started cashing in on this business practice. Why leave it all to the private sector?
But what about when the players have finally been wrung dry and no more can be gotten out of them? Well, we may just have some additional money available to provide them and their families with food stamps and subsidized housing.
And to think the casino bill has been promoted as a benefit to jobs! None of this makes logical sense. Oh, wait—that’s the hallmark of a lie!
If the information in this post is accurate, and I have no way of verifying that it is or is not, the Governor should veto this bill.
I started out three years ago as an ardent proponent of casinos. My Mom is a doctor in a public free care pool hospital, and I know how desperately some of her patients need services that the state keeps cutting year after year. Any way to raise revenue that was politically viable was something I was willing to look at.
At first I thought that these anti-casino BMG posts were shrill and over the top. Your tone made me question whether you were exaggerating the evidence against casinos in order to make your case. Moreover, I trusted the Governor’s judgement. I believed then, as I believe now, that he is trying to do the best thing for Massachusetts as he sees it.
But evidence like this, if it’s accurate, about how casinos are manipulating their gaming machines with “near misses” and selectively getting patrons drunk on free liquor to impede their judgement before offering them loans with their major assets like their home or car as collateral, is too much.
Coming on the heels of the Bialecki and Rosenberg insider casino trading scandals, to my mind there is simply too much evidence that the integrity of the process has been violated and that the casinos, if and when they arrive, will not be nearly as benign as they have been portrayed to be.
If casinos ever come to Massachusetts, it needs to be the result of an open, honest, and accountable public analysis of the costs and benefits, and include reasonable safeguards to prevent the kind of repulsive, predatory behavior that is described in this post.
As it appears that neither of these concerns have been addressed, I will be emailing and calling Governor Patrick’s office and asking him to veto this casino bill and replace Secretary Bialecki.
Me, too.
Can’t figure out if I am angrier at the Dem. leadership on this scam or that I was stupid enough to believe the Rubinesque campaign lies.
Is a contrived political campaign lie called a Rubin or a Dougie? As in, “Oh my God that was a Dougie!” Or, “that lying sack of elected scum just blew another Rubin out his butt!”
Deval’s legacy……a Rubin or a Dougie?
I want to make sure Governor Patrick’s office has read this specific post.
Anyone (editors?) have suggestions about the best way to accomplish that? I’ve already emailed Governor Patrick about the casino bill, and I’m not sure yet another email will be read by anybody except perhaps a high school intern doing a tally someplace.
Is there a way to maximize the likelihood that Governor Patrick has seen this post? Is there a way to solicit a response from the Governor’s office?