Four casinos in Ontario, Canada, have lost a collective $CAD10 million due to a program which offers players a line of credit.
The Canadian casinos, Casino Rama, Caesars Windsor, Fallsview Casino and Casino Niagara, have lost millions due to players not paying up.
Now the venues are all under fire for a lack of responsible gambling procedures.
Experts are warning the program encourages problem gambling since players have not paid the money back.
According to Canadian media outlet, the Star, around 605 gamblers have accounts with unpaid debts of up to $17,000 each on average.
The debts are across the four casinos run by private operators for the Ontario Lottery and Gaming Corp. (OLG).
OLG reportedly does not know if any of the unpaid debts are owed by players who have problems with gambling but data analytics is being suggested to provide more information about credit consumers.
While it is already frowned upon for operators – online and off – to offer lines of credit, the fact the OLG casinos have branded the debts as “uncollectible” has resulted in condemnation by problem gambling experts.
The OLG documents did reveal the company exhausted “all lawful collection options, including the services of collection agencies” to chase the debts.
But a social worker from the Problem Gambling Institute of Ontario, Lisa Pont, noted the potential the program has in triggering problem gamblers.
“If those debts do not get addressed and there is no plan to pay them back, it can often keep people in the gambling cycle chasing their losses,” Ms Pont said.
According to OLG documents, not everyone who applies for credit receives it. Around 59 of 171 players were denied in the last year.
Still, up to $37 million in credit has been approved by the program since 2010.
Vice-president of gaming at OLG, John MacFarlane, said every application is reviewed responsibly and the program is not advertised.
“We view it as tool of convenience…We don’t want people coming in with pockets full of money, from a customer safety and security (standpoint),” he said.
“It’s really primarily there for folks who, first off, demonstrate the wherewithal they can afford credit.
“There is a significant vetting process before granting credit.”
According to reports, the credit offered at the casinos is short-term and interest-free. It must be paid back within 30 days and applications can be mailed or completed at the brick and mortar venues. The casino then runs background checks before approving or denying the application.
“Credit is not intended as a way for players to borrow money when they have no other means or cannot afford to play,” an OLG statement said.
OLG executive director of policy and social responsibility, Paul Pellizzari, noted while casinos cannot approve players who exhibit problem gambling behaviour, staff are not qualified to diagnose a gambling problem.
A professor at the University of Lethbridge and the Alberta Gambling Research Institute, Robert Williams, believes those who apply for credit are likely to already be in debt.
“Who are these gamblers likely to be? It’s reasonable to assume they’re the ones who don’t have easy access anymore to funds through the bank and have exhausted the amount of money they have brought (to the venue),” he said.
“They are likely to be excessive gamblers who have exceeded their limits.
“The fact that a significant number of these credit accounts in Ontario remain unpaid provides further evidence that these are the types of people accessing this.”
Under the program, casinos will attempt to collect the credit from the account the gambler provided when applying for the application after the 30 days is up.
It has been reported that the 605 gamblers had no money in the provided accounts.
OLG executives were also quick to point out that the players do not get cash – they get chips instead.
“They’re just using our chips,” Mr MacFarlane said.
“They have no value outside the casino property. We’re not out any cash. It would (then) be written off as an expense.”
Ms Pont said it was concerning casino operators know they might not get the credit back.
“The money is real when the person has to pay it back,” she added.
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One Response to “Ontario casinos have lost millions by offering players credit”
It inflates the figures when you average it, in my experience 1 person might be in debt of €200k while you might have 50 accounts totalling about 10k bad debt.