In a referendum in November, voters approved up to seven new casinos to join New York State’s nine existing gambling facilities. And New York is hardly alone. In recent years, 23 other states have legalized and licensed commercial gambling establishments (as opposed to Native Americans). In the casino-dense northeastern and central Atlantic regions, where 26 casinos have opened since 2004 and at least a dozen more are under development, most adults now live within minutes drive from one.
Unsurprisingly, the closer casinos get to where people live, the more likely people are to gamble on one. As casinos have spread to deindustrialized cities, dying resorts and sandy urban areas, the rate of gambling participation has increased among lower income groups.
In the increasingly two-tiered US economy, casino industry leaders have realized that they don’t have to go exclusively to well-heeled consumers to reap profits. Payday loans, hire stores, subprime credit cards, auto title loans, and tax prepayments have all evolved to take high profits for lower income groups. And the new state-licensed casinos have their methods as well.
A research team from the University of Buffalo and SUNY Buffalo State has conducted studies that offer new evidence of the effects of casino gambling exploitation on low-income Americans. For example, researchers found that participation rates in casino games and the frequency of visits increased among low-income groups. Easy access to casinos is a key factor. Living within 10 miles of one or more casinos more than doubles the rate of problem gambling. Another factor is the easy access to games of chance at slot machines. Women and the elderly have become more likely to gamble in recent years, in part due to a preference for unskilled gambling.
The casino method is to encourage low-income players to make a large number of small bets per visit, to visit the casino several times a month or even a week, and to maintain this pattern over a period of several years. The key to performing this method is the slot machine.
Most regional casinos are essentially slot machine lounges. Slot machines these days are sophisticated computerized devices designed to produce continuous and repeat bets, and programmed by high-tech experts to encourage players to make multiple bets simultaneously by pressing console buttons as quickly as their hands. fingers can fly. Natasha Dow Schüll, an anthropologist at the Massachusetts Institute of Technology who wrote the definitive book on slot machine design, notes that as players deepen their immersion, they become less interested in winning themselves than just keep playing.
Slot machines will accept bets in denominations as small as a penny – one of the reasons they are attractive to small gamblers. But even penny bets placed on each of the multiple lines for each spin, after hundreds of spins, can result in big losses.
The goal, however, is not to clean up the player in one visit; it’s about providing an experience that will inspire the player to extend the time spent on the device. Slot machines achieve this by carefully regulating the pace, tempo, and sonic ambience of the room, while handing out occasional small wins even as players’ losses slowly increase.
One way for these computerized pickpockets to milk their customers is to generate ‘near misses’, whereby the rotating symbols on the machine stop just above or below the winning payline. The feeling of having come so close to a victory prompts us to play more.
A second goal is to ensure that players visit more often and continue to do so over time. Through player loyalty cards and other marketing programs, casinos collect a large amount of information about their customers. This allows them to design personalized strategies to get players to adhere to this frequent game model over a long period of time.
Casinos also collect information about the value of their customers, as well as their “expected lifetime value”. From this information, we might be able to calculate the percentage of clients coming from the bottom half of the median income distribution, as well as the loss of those low income players as a percentage of their income. We may also be able to comment on how regional casinos welcoming low income gamblers affect income inequality in their localities.
Of course, casinos do not disclose this information, and states that share the revenue generated from gambling losses do not support their business partners in doing so. As a result, the limited data available to the public on the impact of casino games has been gathered by a few outside sources.
A large-scale survey of adults, conducted by the Buffalo Group in 2000, found that lower socioeconomic and minority groups who visited casinos had more gambling-related problems, including financial hardship. This suggests that their losses, as a proportion of their income, were greater than those of the upper income distribution.
Looking at 15 types of legal gambling, the researchers came to a striking conclusion: Casino gambling had by far the most detrimental effects on people at the bottom of the income ladder.