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Liz Benston

Some casino promos not as advertised

17 August 2009

LAS VEGAS, Nevada -- Amid crumbling profits, Las Vegas casinos are marketing aggressively with freebies, gambling discounts, contests and special events. Among them, according to disgruntled consumers, are inaccurately advertised payouts for video poker machines, gambling promotions that are available only to more profitable customers and comped hotel stays and VIP events with hidden costs.

Some casino customers are taking their complaints about ambiguous or deceptive promotions to the Gaming Control Board — an agency that typically settles more narrowly focused disputes involving gambling bets.

In an attempt to stem a rising tide of complaints about promotions, regulators will hold a series of seminars with Nevada casinos in coming weeks to discuss advertising methods, promotions and casino policies that cross the line. "This isn't just a few properties having issues with interpretation. It's industrywide," Gaming Control Board member Randy Sayre said.

In a letter last month, Sayre cautioned casinos about how they conduct promotions, tournaments and special events, as well as "questionable or misleading advertising."

Some operators, he wrote, either don't understand the rules about how to promote gaming activities, or are willfully ignoring them. And the control board, he said, isn't going to look the other way just because the industry is in a downtown and competitive pressures are leading companies to push the promotional envelope.

While gambling disputes often involve a clear-cut determination of whether a customer won or lost by looking inside the computerized guts of a slot machine, promotional disputes are more complex, regulators say, because they can involve multiple interpretations of how a promotion was advertised.

Regulators welcome complaints from the public as an opportunity to resolve disputes that might otherwise threaten the integrity and image of Nevada's gaming industry.

Customers of Nevada casinos — among the world's most regulated businesses — have a backstop in the Gaming Control Board that doesn't exist in other industries where consumers are simply told to read the fine print, or "buyer beware."

In 2007, state law changed to give the board the authority to settle disputes involving casino promotions using the same process by which they settle complaints over gambling wins and losses. The board, witnessing an increase in promotion-related complaints, sought the change as a tool to resolve them on a case-by-case basis. Before the change, the control board would have had to initiate an investigation and determine — by filing a complaint against a casino — that the property had conducted business in an unlawful or unsuitable manner. Only the most egregious promotional activities would have made that cut, Sayre said.

A cornerstone of Nevada law allows gamblers to dispute the outcome of any gambling game, for any reason. This so-called patron dispute process begins when a gambler calls the Gaming Control Board, which dispatches an enforcement agent to interview participants and prepare a written report. The customer or casino may appeal the agent's decision to a hearing examiner, who makes a recommendation to the Gaming Control Board. The three-member board does not consider any new evidence and rarely opposes the hearing examiner's recommendation.

Consumers have filed 91 promotion-related complaints with the Gaming Control Board since July 2007, when the law changed to authorize regulators to resolve such disputes. That's a small fraction of the 1,957 total complaints — many of them involving disputed slot machine jackpots — received by the board over the same period. There's no cost to file a complaint, unless consumers hire their own attorneys to assist in their case.

In most of the promotion-related complaints, regulators decided in favor of the casino.

Several of these disputes have involved gamblers who disputed the number of points they believed they had accumulated on their loyalty cards. These cards typically store such information on a magnetic strip that records gambling activity when it is inserted into a gambling device. Points are like cash in that they can often be redeemed for meals or money to gamble with, and are often offered to gamblers as a promotional incentive.

Regulators decided in customers' favor in only 10 of the disputes. In 28 of the disputes, the customers' complaints were resolved between the customer and the casino without further involvement by regulators.

In only one case did the Gaming Control Board reverse an agent's initial decision by deciding in favor of a customer on appeal. That case involved a Las Vegas man who was denied a $300 prize by a local casino for legitimately winning a football contest. The casino said he wasn't entitled to the award because the property had previously kicked him out and told him not to return. Regulators said he was entitled to the prize because the casino had never officially banned the man from the premises. Gaming Control Board officials declined to name the casino.

Anthony Curtis, publisher of the Las Vegas Advisor newsletter for gamblers, said casinos generally do a good job of explaining promotions to the public.

Casinos don't want to risk angering customers — especially at a time when they are desperate for business, he said.

"There's no value in fooling customers into staying at your property when that irate customer might go to the media or Gaming Control," he said.

As an example, the Silverton recently offered anyone with a loyalty card 2-for-1 entrees in its restaurants. In extending the promotion, Curtis said, the Silverton was careful to disclose on billboards and mailers that the offer was narrowed and now available only to players who had previously gambled a certain amount at the property.

In general, Sayre says, promotional offers should be clearly worded and shouldn't arbitrarily exclude certain customers. Everyone, he said, should have a chance to receive the advertised benefits.

Though comps are gifts that can be given and changed at the discretion of the casino, a publicly advertised promotion creates an expectation that casinos should live up to, he said.

"Don't fly someone out from Akron, Ohio, and then give them something else than what you advertised," Sayre said.