Editorial

Last week in this space, I decried politicians in our state who are pushing the something-for-nothing deception of gambling in order to get in on the financial windfall they believe slot machines in South Florida will bring. But it’s not just the politicians who are preying on Floridians with the March 8 ballot referendums in Broward and Miami-Dade counties.

The preeminent predators are the pari-mutuels and other gambling operators whose business model is simple: when our customers lose, we win. I don’t know how they live with themselves. Sure, they euphemistically claim that they’re just providing entertainment for their customers who freely choose to gamble away their hard-earned and sometimes meager funds.

But no euphemism can cover the truth that these businesses succeed only when people fail – and the consequence of their consumers’ failure sometimes is devastating. The simple truth is that the gambling industry may profit only when their patrons fail to win the big jackpot which is dangled in front of them in every game of chance they play.

Since the gambling industry has long-coveted full-fledged casino operations in the Sunshine State, it’s clear the eyes of the gambling nation are watching carefully the slots referendums in South Florida. The stakes – we might say – in the March 8 referendums are quite high.

As Florida Baptists in South Florida – and across the state – gear-up to give a prophetic witness against the March 8 ballot referendums which would bring Las Vegas-style casinos to seven pari-mutuel facilities in Broward and Miami-Dade counties, I thought it would be helpful to take a look at the rapacious practices of one of the gambling industry’s leaders so that Floridians can appreciate what may be in store for our citizens if the referendums are adopted.

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The deception that tax revenues from this evil business can help fund public schools without any negative effect on our society only makes the sham even more perverse.

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An extremely revealing article in The Wall Street Journal, “Taking Retailers’ Cues, Harrah’s Taps Into Science of Gambling” (Nov. 22, 2004), reports Harrah’s Entertainment Inc., which operates 50 casinos in the United States, is revolutionizing the industry under the leadership of its CEO Gary Loveman, a Massachusetts Institute of Technology-trained economist and former Harvard Business School professor.

Although Harrah’s does not currently own any of the pari-mutuel facilities which would benefit from the March 8 slots referendum, there’s little doubt that Isle of Capri Casinos, which owns Pompano Park Harness Racing Track in Pompano Beach, is quite interested in Harrah’s practices, as are the rest of the industry.

In order to maximize its profits, Harrah’s borrows “tricks from big retailers” amassing “a staggering array of data about its customers,” according to the WSJ.

With this data, customers are carefully cultivated in order to entice them to visit properties around the country and to gamble as much money as possible at their casinos.

Highlighting its riverboat casino on the shores of Lake Michigan in East Chicago – “a typical Harrah’s casino, appealing to an elderly population of largely working-class patrons who arrive by bus and car” – The Wall Street Journal article reveals the high-tech lengths this company goes to keep its customers gambling.

“In September, Mirabel Pena, a Harrah’s dispatcher aboard the East Chicago casino, sat in a small room furnished with metal desks and boxes of Mardi Gras beads. From this control booth, she electronically monitored every slot machine upstairs. If a gambler uses a ‘Total Rewards’ frequent-gambler card, the slot machine begins to record his every move. If a machine malfunctions or a gambler hits a jackpot, Pena grabs a walkie-talkie and dispatches an attendant to check it out. The job can keep as many as four dispatchers busy.”

Just good customer service, some might observe. Instead, as the WSJ reports, Harrah’s has been using this technology and others to keep customers from noticing how much their losing. “Harrah’s has been researching ways to make people feel lucky even as they lose.”

Calling them “luck ambassadors,” the company sends employees “to give nominal gifts to big losers – people who are losing more than expected as tracked by the boat’s central computer system and Harrah’s loyalty cards. Harrah’s has learned that gamblers are more likely to play longer and make a return trip if they receive a small goody.”

One such loser – an 81-year-old man – who lost $100 at video poker was comforted by a “luck ambassador” who told him, “This will change your luck” as she gave him a $5 cash voucher. The losing gambler “brightened immediately” and went back to gambling more, the WSJ notes.

“A successful intervention, says David Norton, a Harrah’s senior vice president of marketing, will leave a customer saying: ‘OK, so I lost my $75, but I got two-for-one’ tickets to a Harrah’s show,” according to the Journal.

Another pathetic example of Harrah’s predatory practices reported by the WSJ was a 63-year-old former U.S. Postal Service employee who had run out of money but “was waiting to see if she had won any of Harrah’s cash giveaways” in a 10 p.m. drawing “even though it meant making the 20-mile drive home in her 1978 Cadillac with no headlights.”

The woman told the reporter that she had lost $98 on slot machines during a two-day period while waiting to see if she had won any of the contests she had entered. She lives on $967 a month in government disability payments.

The WSJ reporter notes, “Harrah’s says it doesn’t know its customers’ incomes. It says it deliberately doesn’t try to find out for fear of being accused of preying on people who can’t afford to gamble.”

I’m sure that’s comforting to the 81-year-old man and 63-year-old woman who failed to notice that their “luck” had run-out while being pampered with “nominal gifts.”

These techniques are reaping rewards for Harrah’s. The Journal reports that the East Chicago casino’s profit margins rose to 15 percent in the third quarter, compared with 12 percent in the “busy first quarter when that casino usually expects to earn its highest margins. … That suggests more people are losing money.”

Exactly – in order for these greedy businessmen to profit, their customers must lose. This is the ugly truth of the “luck business” – a truth that is being buried in the something-for-nothing propaganda with which South Floridians are being bombarded in the weeks before the March 8th referendums.

Florida Baptists and other concerned citizens have an obligation to expose the gambling industry for what it really is – a predatory business whose success is built on its clients’ failures. The deception that tax revenues from this evil business can help fund public schools without any negative effect on our society only makes the sham even more perverse.

On March 8th, let’s make the gambling industry the loser.