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CRM may lead to invasion of privacy

2/7/2001

Casino Slot Clubs – do they help encourage problem gambling?

According to legal experts, casinos slot clubs raise privacy issues regarding problem gamblers, which may instigate lawsuits. In slot club programs, casino customers earn premiums based on data recorded on cards they insert into the machines. Such programs not only encourage greater play, they give casinos valuable data that can be utilized to the casino's advantage. This arouses a question about gamblers? privacy: Could a plaintiff's attorney hit the casino industry with a lawsuit, claiming such programs target problem gamblers and encourage their behavior?
Harrah's Chairman and Chief Executive Phil Satre believes that problem gamblers would stay away from a program like their slot club, known as Total Rewards, precisely because the company would know a great deal about how the person gambled.
But Bo Bernhard, director of operations at the Problem Gambling Center of Las Vegas, said the problem gamblers at his clinic use slot cards just as much as other players. However, he also says the cards and their perks are not a factor in driving the problem gambler's behavior. "To the normal recreational individual, absolutely it's an enticement," he said. "But to the people we see, it isn't an issue."
The issue at hand is what causes a recreational gambler to slip into problem gambling -- and whether or not slot cards and their perks contribute to the problem, and what are the legal implications. It is clear though that problem gamblers start as recreational gamblers -- and that it's likely that biological and genetic factors make it more likely that certain recreational gamblers will degenerate into problem gamblers.

Any fool can sue," said Shannon Bybee, executive director of UNLV's International Gaming Institute. "(But) I'm not sure there's meat for a lawyer to get a hold of. If someone is a compulsive gambler, you have to establish that the house is aware of that." Bybee feels that even if a casino could reach that conclusion from looking at data, they would probably not want that person as a customer.
Nelson Rose, gambling law professor at California's Whittier College and American Bar Association gambling law expert, agrees with Bernhard that the data gathered by a slot card -- frequency of play and amount gambled -- cannot, by itself, be used to identify a problem gambler. Both see an opportunity for the cards to be used as part of an effort to identify and weed out problem gamblers. Although Rose says that defining a problem gambler is the real challenge -- particularly if the patron denies it. "It should be viewed as an opportunity to work with problem gambling specialists to get at these (problem gamblers)," Bernhard said. "I really do think these people realize ... this is not a customer base they want to tap into."
However obtaining data like a gambler's financial situation and family situation creates another legal problem ? privacy infringement. Although casinos do not wish to target problem gamblers, they risk privacy infringement if they further investigate the likelihood that a slot club customer has a problem. However, according to Rose, "If someone says, 'This person is a compulsive gambler,' and they do nothing, and continue to solicit, there's a bigger chance of some civil liability than if they investigate (and are sued for) invasion of privacy."
Thus, although there does not appear to be enough evidence to support a lawsuit against the casino industry on the grounds that slot cards help encourage problem gambling, casinos should not rule out the possibility one could be filed.