Casinos’ Data Could Identify Problem Gamblers, Researchers Say

Gambling addicts could be helped with the use of consumer tracking information developed by the casinos, Harvard researchers say.  However, the CEO at  Caesars Entertainment worries about taking the technology to “extremes.”

With the ringing sounds of slot machines wafting up from the casino floor below, researchers at a recent Las Vegas convention on gambling and risk-taking presented an algorithm that shows the potential for casino data to identify problem gamblers.

Sounds like a conundrum, right? Consider this. If an algorithm analyzing casino customer data is able to identify those with a potential gambling problem, couldn’t this mean casinos would be shutting the door to some of their most lucrative customers if they started using such technology?

Results from other research questions show estimates that 25 percent to 50 percent of casino revenue may come from problem gamblers.

Couple this with the fact that the casinos could readily identify such potential gambling risks and such data-mining algorithms are likely to be definite turn-offs for many in the industry.

This is the consensus of the research summarized in The Wall Street Journal.

Indeed, the article quotes Gary Loveman, CEO of Caesars Entertainment Corp. (who also happens to be a former Harvard Business School professor), saying that the technology “is a terrible idea.”

“Is it McDonald’s obligation to decide you have a problem because you have a tendency to eat high-calorie lunches? You could take this to ridiculous extremes,” Loveman told The Journal.

But problem gambling is a growing phenomenon. While most people can gamble responsibility, there are an estimated 6 million to 8 million problem gamblers in the U.S., according to the National Council on Problem Gambling.

The American Psychiatric Association (APA) recognizes excessive gambling (that is, gambling in its most extreme form) as a behavioral addiction.

What Systems Look For

The systems being developed to enable casinos to predict problem gamblers looks at the following data:

  • Length of play – Gambling for long stretches of time.
  • Intensity of play – Increase in the number of bets placed or rapid pace of playing.
  • Chasing losses – Trying to recoup gambling losses by increasing the size of the bet.
  • Behavior changes – Here the pattern to look for is gambling with larger stakes or for long periods of time.
  • Win/loss patterns – Demonstrating an unwillingness to take small wins (or small losses).
  • Time of play – An increase in late-night gambling is riskier.
  • Money management – Adding money to an account in the middle of play may indicate a problem.

Industry Push-Back

Gaming industry officials counter with the fact that they spend millions of dollars funding research projects to address gambling addiction. Many casinos have instituted efforts on their premises to identify customers in obvious signs of distress and by allowing customers to have the casinos bar them from play.

With all the considerable data casinos already gather about their clients, developing detailed player profiles they use to market offers to them, casino operators contend that there is nothing in the information that allows them to spot a problem gambler.

Limitations of Behavior-Tracking Systems

Systems that track gambling behavior aren’t without their critics. Some researchers say that data derived from land-based casinos is partly limited because it can only use betting data from customers who opt in to the casino’s loyalty programs.

Where behavior-tracking systems may be useful is in the burgeoning online gambling sites, say other researchers. These sites collect copious amounts of data from each player, including, but not limited to, size of bets and time of day.

Whereas online gambling used to be illegal, several states have passed laws permitting online gambling. And addiction experts are rightly concerned about such easy online access to gambling, saying it only increases the risk of addiction.

In the end, no amount of breakthrough technology can overcome resistance on the part of the gambling industry to make use of it for the purposes intended. When it comes to intervening with their best customers, there’s little incentive for some gambling companies to do so, even if they make a half-hearted attempt to use the behavior-tracking systems.

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