Top 10 Best Practices in the Predatory Gambling Trade

This is a must read from BMG --

The Top 10 Best Practices in the Predatory Gambling Trade
by: StopPredatoryGambling

Today, a "Best Practices in the Gambling Industry" conference sponsored by the casino trade was held at Suffolk Downs. To help those who could not attend, here are the trade's Top 10 "Best Practices":

1) Base your business model on 90% of the gambling profits coming from 10% of the people who use the product, which makes nine out of every ten patrons virtually irrelevant to your revenues.

2) Design slot machines to "approach every player as a potential addict" by making them operate like "loaded dice", all in the name of getting the user "to play to extinction" - until all their money is gone. This recent Washington Post op-ed by a respected MIT professor explains it all.

3) Always make the political argument be about jobs, revenues and "inevitability" instead of the business model, the product and the marketing behind it. Which is why you won't find even one picture of a slot machine on our website.
StopPredatoryGambling :: The Top 10 Best Practices in the Predatory Gambling Trade

4) Create the public impression we are concerned about problem gamblers with a disciplined communications strategy (like "best practices" events such as this one). But in reality, aggressively defeat all efforts to meaningfully address the issue like how we roadblocked a bill in PA requiring casinos to mail monthly loss statements to frequent gamblers and how we funded a $15 million campaign in Missouri to repeal the state's $500-in-two-hours loss limit law.

5) Intensively fund the public health research like the tobacco companies did to minimize public outcry about our business model, our product and our marketing. Here are two stories, one by Bloomberg News and the other by The Boston Globe, that describe how we do it.

6) Use state-of-the art consumer loyalty technology as a critical marketing tool to closely monitor a person's wagering and the speed they gamble. The faster a person gambles, the more they lose. When you add in how much they wager each time, we develop a revenue model for each person we call "their predicted lifetime value."

How good is our marketing? Companies like Harrah's can trace more than 75 percent of its gambling revenue back to specific customers and with such state-of-the-art technology, we are vulnerable to the charge that we know who most of the out-of-control gamblers are that make up nearly all of our revenue.

But because our business model relies on 90% of its gambling profits coming from 10% of the people who use the product, we need out-of-control gamblers to survive. The consumer cards are how we identify who has the potential to reach the out-of-control category and then we aggressively market to them using free slot play, free food and lodging, telephone solicitations, direct mail and other marketing techniques to stimulate these people to reach their "potential."

7) Outsource the ownership and management of the ATM machines inside your casino and then buy from the vendor the list of the people who take money out of them. These gamblers are highly valuable because they are the ones most likely to lose control of their spending - they lost the money they arrived with at the casino and then needed to withdraw more of their savings to chase the money they lost earlier. If they did it once, they are likely to do it again. And again. And again.

8) Give as much money upfront to government as you can because our business model only works if our government denies the core democratic principle of equal citizenship to other Americans and traps people in debt. We already know 90% of our profits comes from 10% of the people we target - addicted and heavily indebted people. By definition, someone who is an addict or someone who is in deep financial debt is not free.

In a country where everyone is considered equal, where all blood is royal, the state is actively promoting a product that renders some of our fellow citizens as expendable. There is no good answer for this truth so simply go back on message with the jobs, revenues and "inevitability" argument.

9) Whatever you do, don't actually use the product yourself. It's a fact that most of us who own and promote casinos don't use the product, like casino exec Steve Wynn, Harrah's CEO Gary Loveman or Massachusetts Treasurer Tim Cahill, to name a few.

10) Casino capitalism is very, very lucrative - for a handful of people like us.
These "best practices" belong at the center of every discussion about predatory gambling in the weeks and months ahead.

Les Bernal

For those who take the time to research the statistics, this comment was of particular interest --

Hold a public hearing just on the business model, the product and the marketing practices

There are a total of thirteen hyperlinks in the post referencing each "Best Practice." Not sure how that doesn't far surpass "some documentation."

I have written up the quote for BMG before, coincidentally five months ago today, but am happy to do it as many times as it takes until the predatory gambling trade explains their business model as well as how electronic gambling machines work and their marketing practices:

The 90%/10% reference can be found in Wall Street Journal reporter Christina Binkley's book Winner Takes All on Pg. 184. The exact text reads as follows:

Harrah's propeller heads discovered that 90% of

Harrah's profits come from about 10% of its most

avid customers.

The business model, the product and the marketing practices of the predatory gambling trade deserve intense and thorough public scrutiny. And to date, there has been virtually none of it.
Les Bernal

Most of us knew predatory gambling was wrong when the prospect of a Middleboro Mega Casino was forced on us with no discussion.

The more one reads, the more one realizes our initial reactions were right.

This isn't sound public policy. This isn't economic development.