How Casinos Target Gambling Addicts

Card Sharks: How Casinos Target Gambling Addicts
As cash-strapped states increasingly turn to gambling for revenue, some casinos are resorting to devious methods to keep vulnerable gambling addicts coming back.
By David Greenstein

Ever wonder why states love gambling? Because legalized casino gambling, which reaped a $50 billion whirlwind in 2010, seems like a painless way to raise money for government coffers without increasing taxes. Lawmakers in Florida, New York, and Chicago are all considering the pros and cons of legalized gambling. At the same time, casino spokespeople in Las Vegas report upticks in revenue, and two of Connecticut’s Indian tribes, which already control the wildly successful Foxwoods and Mohegan Sun casinos, are making moves to run the state’s seemingly inevitable online gaming enterprise.

While members of Gamblers Anonymous would rightly rally against such developments, I take a more measured view—mostly because I have an interest in casino gambling. I get no rush from games of chance like roulette or craps, but I have mathematical inclinations and a disciplined desire to win, which is how I ended up in the world of high-stakes card counting. Through a series of happy accidents, I wound up being taught to count cards and got myself invited to audition for a blackjack team not unlike the one depicted in the Kevin Spacey movie, 21. Along the way, I received a firsthand look at how high-stakes gamblers operate and what casino managers do to keep them happy, coming back, and trying to win money at games in which the odds are hopelessly stacked against them.

Casinos most commonly come after gamblers by giving them free stuff. But to get the free stuff, you need to show your ID and get a player’s card, which you present to the dealer every time you sit down to play. The card gets entered into a computer and allows the casino to track your play. This impacts decisions on the items that you’re worthy of receiving. It’s based on how much you bet, how often you play, and how much you lose. It also allows the casino to figure out what sorts of goodies will keep you coming back. And for problem gamblers, coming back can be disastrous. Of all the addictions—including drugs, alcohol, sex—gambling addicts have the highest suicide rate (by at least one estimate, as many as one in five gambling addicts try to kill themselves at least once.)

Casinos are so good at what they do they exacerbate a gambler's addiction. Think of an alcoholic who’s six months sober—except that Johnnie Walker knows his habits, and just when the physical craving passes, a case of Blue Label lands on his doorstep.

At the low-end you might get a windbreaker or a free lunch at the buffet. At the high end, it’s travel aboard a private jet and week-long stays in butler-equipped villas that are literally fit for sultans. I fell somewhere in the middle. I got gratis rooms, lots of tasty meals, gifts, and free entry into poker and blackjack tournaments. On a few occasions, I received $500 chips to play with. Other times, there were bottles of Chateau d'Yquem, computer games, and even cookware. Ultimately, I’d get backed off and told that I could no longer play blackjack in the casino “because your action is a little strong for us, Mr. Greenstein.”

The rebuffs were public and should have made other players at the table wonder what they were doing wrong, and why the casinos welcomed their action. But that never seemed to cross anybody’s mind.

Somewhere along the line—probably while I was enjoying a long weekend in a comped suite, eking money from the casinos and dining like a prince—I realized what a nightmare this has got to be for somebody who actually has a gambling problem. My only problem was getting booted out of the casinos for playing at an advantage. For nearly everybody else, though, winning appeared to be practically impossible. I’ve seen people drop six-figure sums in shockingly short periods of time and walk away from the table emotionless, as if they felt they had the financial beating coming. Bizarre plays for thousands of dollars, wild bouts of drinking, women who were clearly there for good times and cash—it was all standard stuff for a number of gamblers at the high-stakes tables.

Judging by how most people play blackjack, I recognized that they have no shot at winning money in the long term. But they keep getting lured back by comps, by a love of action, by the belief that it will be different next time—like an alcoholic who returns to the bottle expecting an alternate result. Gambling for most of them is a costly accompaniment for blowing off steam, meeting girls, and getting treated like big shots. For somebody with an addiction to gambling, who actually is trying to stop before he burns through his life’s savings, it’s way worse. And the casinos are so good at what they do that—willingly or not—they exacerbate the problem.

Think of an alcoholic who’s managed to stay off of liquor for six months, but Johnnie Walker somehow knows his habits, and just when he’s stayed away long enough for the physical craving to pass, the liquor company messengers over a case of Blue Label. That parallels the challenge that once faced Joe B., who placed his first horse bet at age 16, in 1974, and stopped gambling, with the help of Gambler’s Anonymous, in 2004. “You always get free stuff in the mail,” he says. “There were tickets for concerts, free rooms, free meals. Even after I got into the program, I would continually get all kinds of invitations and inducements to visit the casino. I’d tell them that I didn’t need to see the stuff and I wouldn’t get anything for a while. But then, suddenly, six months later, there’d be an offer to match my bet for up to $150 or to give me $50 in tokens for free slot play.”

Joe, who says that he’s lost six-figures to the casinos and remembers many a time when he’d gamble with his rent money or bet until he was broke, views the gambit without a whole lot of animosity. He figures that the casinos’ marketing people were just doing their jobs. But Joe acknowledges that those particular offers were enticing. “I would feel tempted to go down there,” he continues. “I figured that I should go there and make one bet and then go home. A friend heard that and said, ‘God forbid if you hit a jackpot for $5,000.’ The friend was right. A normal person would have put that money in the bank. But for me it was never enough. I would have kept right on gambling.”

For a jonesing gambler, the casinos make it hard to quit. Hosts (the guys who serve as the point-people between gamblers and casinos) will send limos to pick you up and come across as the friendliest folks you’d ever want to meet, always smiling, happy to see you, endlessly accommodating your desires. Some casinos, most notably the Wynn Las Vegas and MGM Resorts properties, have made efforts to identify problem gamblers, ban them from continuing to play, and stop them from completely destroying their lives (after, of course, the casinos win enormous sums). But others don't, and in many cases the situation spins wildly out of control.

The most extreme example in recent years of a gambling implosion, was that of a novelty goods magnate by the name of Terrance Watanabe, who dropped nearly $127 million in 2007. Most of his losses happened at Caesars Palace and the Rio, both in Las Vegas. According to the Wall Street Journal, the casinos’ parent company, which was known as Harrah’s Entertainment at the time, made nearly six-percent of its Las Vegas-based revenue from Watanabe in 2007. That year he lost around $112 million to the casinos in cash and close to $15 million in so-called markers.

Markers are ingenious devices that casinos use to make it easy for their best customers to gamble for large sums of money. Rather than having to travel with thousands of dollars in your pocket, you arrive at the casino, sign a marker, and receive a specified sum of chips. For a non-compulsive gambler, this is a convenience. For someone with a gambling addiction, however, it can be the beginning of a very rough ride.

According to a Vegas-based attorney who asked not to be named, “Markers are the equivalent of checks. But people think of them as loans. In reality, though, when you sign for a marker, you are vouching for the fact that you have funds in a banking institute to back it up.” Typically, players have 30 days to pay off their markers. After that, the casino can deposit the marker like a check and hope to receive its money. And if the money is not there? “It is as if the gambler has passed a bad check and, in Las Vegas, a division of the DA’s office attempts to collect the money.” An extra 10-percent is tacked on to what the gambler owes and the DA’s office keeps that additional fee.

Watanabe got in deep with his markers. When he would not pay, charges were filed against him. But Watanabe fired back at the casino, maintaining that one of his casino hosts plied him with liquor and painkillers (his host denies this, insisting that it was a single Lortab, taken from his own personal prescription, after Watanabe slipped in his room and hurt his back) and allowed him to keep playing even though he was so inebriated that he actually fell asleep at the table. It was turning into the kind of case in which nobody looks good. In fact, it came out, Wynn Las Vegas banned Watanabe for his drunkenness and because he appeared to have a gambling addiction. Avoiding a public relations nightmare, Harrah’s agreed to remove its civil charges and the DA’s office dropped its criminal charges, though Watanabe still had to pay a $500,000 administrative fee to the DA’s office (considerably less than the nearly $1.5 million that he would have owed had the court found him guilty). The case between Watanabe and Harrah’s went to arbitration with confidentiality for all parties.

Regardless of the wind-up, Watanabe, a man who apparently had an illness when it came to gambling, had lost so much money that the $15 million he owed seems weirdly inconsequential. As Bill Thompson, a UNLV professor who focuses on gambling, told the Las Vegas Review Journal, “No one has ever lost this much money in a casino before. It’s just a fantastic amount. He’s just the biggest whale of all time."

It is hard to tell if that statement was made in a tone of wonder, pity, or matter-of-factness.

Not long ago, a high rolling friend in the Midwest brought me out of retirement. He wanted to back me for low-stakes card counting and put me into a blackjack tournament (which requires game-playing skills other than card counting). I agreed, and, for three days, I enjoyed being back in the saddle. I got a little unlucky and busted out of the tournament but I did manage to win us a few bucks at the cash tables.

Overall, it was a good and pleasurable experience. But at the tournament, a little older and a little more jaded than my younger card-counting self, I enjoyed eavesdropping on the conversations of bonafide high rollers. Most of these guys were well to do men. They had successful businesses and did not come across as desperate gamblers in any way—until you heard snatches of their conversations. They were not talking sports or cars or where to get the best steak in the casino. Instead, they were bonding over tales of juggling outstanding markers and sharing information on which casino operators around the country were most lenient in terms of their policies.

The guy who won the tournament’s six-figure first prize seemed to be particularly embroiled in casino debt. If I couldn’t win it, I felt glad that he did. Of course, though, whether that money went toward getting himself straight or financed another bender of high-stakes risk is anybody’s guess.

Want to bet where it wound up?