Giving credit where it's due?

News item: Caesars Entertainment issues a co-branded credit card with Mastercard. In doing so, they join a long list of businesses, sports teams, and educational institutions that offer such cards. The two major Las Vegas newspapers, though, had entirely different spins on the story.
The Las Vegas Sun reported the story fairly straight-up, quoting the redoubtable Park Place (soon to be Caesars) Entertainment spokesman Steve Rosen:

Gambler loyalty cards have become ubiquitous at Las Vegas Strip casinos in recent years and have led to increases in casino revenue as customers spend more of their dollars at participating casino chains.

Park Place Entertainment Corp. has taken the concept a step further by rolling out a company-branded credit card. Taking a page from popular frequent airline traveler and retail programs, the Caesars Entertainment MasterCard allows customers to receive 1 percent cash back on their purchases -- money that can be redeemed at company-owned retail shops, restaurants, shows and other venues across 15 Park Place resorts nationwide.

"It's just another way to give more back to the customer and hopefully increase their loyalty," said Steve Rosen, senior vice president of marketing for Park Place. "No matter where they go or what they do, the card will allow them to get a comp at any of our properties."
FULL STORY

The article goes on to detail existing features in the Connection Card, PPE's player loyalty program, that reward patrons for non-gaming purchases, and discusses the benefits of the card to consumers.
The Review Journal story, though, has an entirely different slant, instead presenting the introduction of the card as a dark day for problem gamblers and the industry itself:

"How clever of them," said Durand Jacobs, a clinical professor of psychological and behavioral sciences at Loma Linda University Medical School in California.

"They've got to know the customer base they'd be trying to attract are problem gamblers," said Jacobs, who is also former vice president of the National Council on Compulsive Gambling.

FULL STORY

About half of the article is filled with alarmist predictions that Park Place Entertainment will now take the next step and seek approval to allow credit cards to be used in slot machines--two entirely different issues. Amid warnings of soaring consumer debt and problem gaming, the article does not mention that, just yesterday, Park Place announced an aggressive program to bar problem gamblers.

Buried near the bottom of the article are the sensible thoughts of Carol O'Hare, who I would guess knows a bit more about problem gambling than most of the alarmists quoted:

Carol O'Hare, executive director of the industry-funded Nevada Council on Problem Gambling, acknowledged the new card is a marketing scheme designed to bring people into the casino.

"(But) I'm not sure it's any better or worse than any other scheme casinos would use, just being tied to a credit card," she said.

So the facts of the story are: the card is meant to build brand loyalty, and it follows similar cards issued by airlines and other companies. To me, there is no real moral, ethical, or economic difference between someone paying for their hotel room at the Flamingo with a Caesars Entertainment card and their paying for their airfare with an American Airlines card. So why the Chicken Little treatment? Some observers, I guess, are just preconditioned to regard anything that a gaming company does as inherently bad.
The deeper issue that takes up most of the RJ article, use of credit cards in slot machines, is itself one that deserves thought. You don't have to be a futurist to see that people are generally using cash less than they did in the past. I don't remember the last time I paid cash at a grocery store--using my ATM there is more convenient and usually faster. For that matter, the guy ordering in front of me at Diamondhead Teryaki Grill last night used his credit card to pay for his plate lunch. It's not too hard to imagine that, within twenty years at the latest, we will use cards for most of our purchases. When that happens, the concept of using a credit or debit card in a slot machine will be far less alarming and will probably be demanded by consumers. If people are disciplined enough not to overspend their planned limits, using a card to deduct gaming losses and credit gaming wins is actually safer than cash--there is far less risk of someone getting rolled in an elevator or casino restroom after cashing their chips in if the money is simply put on their card.
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posted by Dave at 9:51 AM