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Compulsive Behaviors

Stake and Chips

The use of virtual representations of money in gambling

The use of “plastic payment” is well known by those in commerce and is now being used by the gaming industry. Commercial operators know that consumers typically spend more on credit and debit cards because it is easier (and psychologically guilt-reducing) to spend using plastic. Many forms of gambling use virtual forms of money. Whether it’s chips, tokens, e-cash, or smart cards, they all serve the same psychological function. They “disguise” real money's true value. What’s more, chips and tokens are often re-gambled without thought or hesitation and all the evidence seems to suggest that people gamble far more with virtual forms of money than real cash.

Over the next few years, more and more casinos (and other gambling establishments) will start to introduce cashless ‘smart card’ systems. The industry argues that this provides convenience for the player. For the industry, smart cards help speed up the gambling process as punters do not have to waste time re-inserting money constantly into the machines. Winnings can be stored on the smart cards, and at the end of the play period can be credited to the player’s smart card account. While this is entirely justifiable there are issues surrounding player protection. For instance, smart cards provide the potential for exploitation of players through customer tracking. Smart cards provide a very cost-effective way of collecting lots of data about the gambler and their gambling behaviour.

Customer data is the lifeblood of any company. Smart cards can provide tracking data that can be used to compile customer profiles. Such data can tell commercial enterprises (such as those in the gaming industry) exactly how customers are spending their time in any given financial transaction. By using smart cards, the gaming industry knows which machines their customers are gambling on, for how long, how much money they are spending, and which are their preferred machines. This data can then be analyzed in relation to any number of demographic variables (such as age, gender, occupation, post code etc.).

As with other commercial sectors (like big supermarket chains), the gaming industry argues that such information aids “customer enhancement” and can help in the future retention of customers. Many gamblers are unknowingly passing on information about themselves which raises serious questions about the gradual erosion of privacy. Gamblers are being profiled according to how they transact with service providers. Linked loyalty schemes can then track the account from the opening established date.

The technology to sift and assess vast amounts of customer information already exists. Using very sophisticated software, gaming companies can tailor its service to the customer’s known interests. When it comes to gambling, there is a very fine line between providing what the customer wants and exploitation. The gaming industry sell products in much the same way that any other business sells things. They are now in the business of brand marketing, direct marketing (via mail with personalized and customized offers) and introducing loyalty schemes (which create the illusion of awareness, recognition and loyalty).

On joining loyalty schemes or setting up gambling accounts on the Internet, gamblers supply lots of information including name, address, telephone number, date of birth, and gender. Basically, the individual gaming operator can track the playing patterns of any gambler in their premises or on their website. They will know more about the gambler’s playing behaviour than the gamblers themselves. They will be able to send the gambler offers and redemption vouchers, complimentary accounts, etc. Benefits and rewards to the customer include cash, food and beverages, entertainment and general retail. However, more unscrupulous operators will be able to entice known problem gamblers back onto their premises with tailored freebies.

The introduction of smart cards has come at a price, and that price is the invasion of the gambler’s privacy. For those companies that analyze their tracking data, I really do hope that such data can be used to identify problem gamblers and help them, rather than to potentially exploit them.

More from Mark D. Griffiths Ph.D.
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