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Best of Liz Benston

Gaming Guru

Liz Benston

Casino Companies Phasing in 'Code of Conduct'

17 September 2004

LAS VEGAS -- Starting this month, many major Las Vegas casinos as well as their sister properties nationwide will post brochures for customers that would have been unthinkable in the early days of legalized gambling, when secrecy and shady business practices were the norm.

The brochures list the typical house advantage for several casino games such as slots and blackjack as well as how much customers can expect to lose for every $100 bet. They also explain the role of other factors involved in the gambling experience such as government regulation, basic statistics and the speed or length of time spent making bets.

They also mark the final piece of an ethics policy adopted about a year ago by the American Gaming Association, whose members include the country's largest non-tribal casino companies and slot machine makers.

The AGA's "Code of Conduct for Responsible Gaming" has been applauded by big casinos and some problem gambling advocates but criticized by others who say it will do little to help compulsive gamblers who need help most. Others say it is a careful attempt by casinos to protect themselves in an age when gambling addicts are increasingly suing casinos.

AGA members had a deadline last week to implement the four-page code, though there's no enforcement mechanism for forcing casinos to comply with the policies. The code is primarily a collection of best practices already in use, members say.

Most companies were already following the basic aspects of the policy when it was adopted, but the code marks the first time that all major companies will follow the same public pledge, they say.

"The purpose was to provide consistency among all AGA members and to put (an ethics policy) on paper," said Lesley Pittman, spokeswoman for Station Casinos Inc. and a member of an AGA task force that developed the policy.

Among other things, the policy calls for member companies to offer problem gambling helpline numbers on brochures in their casinos as well as on company Web sites.

Casino members must also post a responsible gambling message and a helpline number for gamblers in advertising pieces "where practical." Advertising pieces must not be posted in venues geared toward minors and must not "contain claims or representations that gaming activity will guarantee and individual's social, financial or personal success."

Members also must have programs that can ban customers from casinos as well as remove access to other priveleges such as casino credit, players clubs, check-cashing and promotional mailings. The exclusion aspect of the code has probably been the most complicated and costly to implement, companies say.

Some companies such as Harrah's Entertainment Inc. incorporated the code into existing formalized responsible gambling programs.

Other companies, such as Caesars Entertainment Inc. and Boyd Gaming Corp., had less formal procedures that were updated to include the code.

"There's nothing new here that our company hasn't been exposed to," Boyd Gaming Vice President of Development Blake Cumbers said. "But the company never had a (responsible gambling) committee before. We internalized (the AGA policy) into a management process that will be ongoing as part of our regular planning cycle, just like any other management function."

Caesars Entertainment in December adopted a more comprehensive responsible gambling program that included the creation of a monitoring committee at each property and software that compiles and cross-references all the excluded persons data companywide. Caesars also created a new position of responsible gaming program manager and filled it a couple of months ago with a 25-year veteran of the FBI.

The AGA's Code of Conduct encompasses many rules that states newer to casinos, such as Mississippi and Louisiana, have already built into their regulations.

"This is a big change for some companies only doing business in Nevada," Harrah's spokesman Dean Hestermann said.

Nevada law doesn't require companies to offer programs that ban customers from casinos, nor does it offer advertising guidelines, require companies to distribute problem gambling brochures to employees or post helpline numbers in employee areas as called for in the AGA code, among other things.

At Station Casinos, for example, the policy that casino advertising not "appear adjacent to, or in close proximity to, comics or other youth features to the extent controlled by the AGA member" goes beyond previous company standards, Pittman said.

Harrah's has had a problem gambling program in place for more than 15 years and was one of the first casino companies to publicly articulate a responsible gambling ethics policy.

The company has spent at least $3 million implementing a computer program that is able to track gamblers who have signed up for state-sponsored or casino-sponsored exclusion programs at Harrah's casinos. The program also keeps tabs on gamblers who do not want to be sent promotional mailers or receive other casino perks.

The program has had its problems.

Last month, Harrah's was fined $40,000 by Missouri regulators for mailing promotional materials to people who had voluntarily banned themselves from casinos in that state. Missouri officials discovered the oversight after gamblers who received mailings complained.

Harrah's has instructed its marketing staff to be more diligent, Hestermann said.

"We've revised our audit procedures so that periodic reviews are conducted to ensure that all marketers are in compliance with our direct mail procedures," he said.

Harrah's and other companies have been sued by compulsive gamblers who say the company failed to keep them out of their casinos after they had put themselves on an exclusion list.

Liability remains a concern but wasn't a reason to have or not have a code of conduct, members say.

At any given moment, attorneys can no doubt argue that the code could either increase or decrease liability for casinos, MGM MIRAGE spokesman Alan Feldman said.

"To not do this seems a less responsible decision to make," he said. "If we have the ability to offer a patron the opportunity to change or control their behavior, we should do that. If (a person) slips through the cracks, we should ask whether we did everything we could and should have done to act responsibly."

Some advocates support the effort behind the code and say it's an important starting point.

The casino industry has evolved from theorizing about problem gambling to defining it, creating rules to assist problem gamblers and implementing those rules, said Carol O'Hare, executive director of the Nevada Council on Problem Gambling, an industry-funded education group that creates the brochures found in most big local casinos.

"I think that's the result of their own education," O'Hare said. "They know more about this subject than they did 10 years ago."

The next step is for companies to monitor the effect of their policies by collecting feedback from employees and customers, she said.

"There's always going to be people for whom no amount of information is going to change their behavior," she said. "For some people the only thing that will have meaning is a helpline number. But we have to cover the spectrum at every level."

The code can also help groups like the Nevada Council press for more responsible practices at smaller casinos that aren't held to the same standards, O'Hare said.

"It helps us look in our own backyard and have a dialogue with the industry," she said.

Bo Bernhard, director of gambling research at the University of Nevada, Las Vegas, calls the code "a good step for the industry to make."

"It's tough to argue with something that gives more information to the consumer," Bernhard said.

As casino gambling spreads into new areas nationwide, "question 1 and 1A (for governments) is what's going on with responsible gaming and what is the social cost," he said. Regulators are changing in response to social pressure just as they were forced to become more savvy about technology during the slot machine boom, he said.

The code calls for a self-audit at least once a year. Whether the guidelines will ultimately lead to more help for compulsive gamblers is unclear, however.

"Those kind of results are very hard to quantify," Cumbers said.

Some AGA members say many customers -- from several hundred to a couple of thousand people each -- have signed up for some sort of exclusion program.

Caesars Entertainment officials say they have anecdotal evidence that their program is working. About 50 people have so far been added to the company's list of customers who will not receive casino services for the rest of their lives. These are people who didn't ask to be on the list but were instead put there by casino workers who witnessed signs of a gambling problem and passed on the news to higher-ups.

"Many of those people tell us they realize they have a problem," Caesars spokesman Robert Stewart said. "They have written letters and thanked us."

But Robert Hunter, who counsels gambling addicts as clinical director of the Problem Gambling Center in Las Vegas, said the policy and the casino odds brochure will have little effect on people who need help most.

"Problem gamblers are not gambling in a logical fashion," he said. "It might be a good thing for social gamblers, but I imagine the impact would be minimal."

Bernhard, an assistant professor of sociology and hotel management at UNLV, said pieces like the odds brochure could put gambling in perspective for some players.

"People really don't understand and respect the laws of probability," he said. "There are intelligent people who really talk about how the games on the end are 'hot' or 'lucky' or how my machine was 'just ready to hit.' Superstition still governs much of gambling behavior."