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.