Propose new Standards for Accredited Casinos

[spearmaster]

I hear what you're saying Spear but I still think it is unethical and shows a lack of "Responsible Gambling" criteria that should be in place and offered by the Casino Operator.

Responsible Gambling is something that requires the player to have control over their own actions. As you are not required to accept a reverse withdrawal bonus, you have control over your actions.

Provided the operator does not unduly delay the withdrawal process (ie. by making repeated offers), they are not doing any more to encourage gambling than they would through a standard bonus offer.

Thus, if you call a reverse withdrawal bonus irresponsible, by extension all bonus offers should be considered irresponsible as well.

Otherwise my analogy in comparison would be to say to my addict brother that if he will only stay here awhile longer the best heroin will be made available to him along with a big discount, but on the other hand he can just walk out the door with what he has now and never really know for sure. Very tempting to a weak minded player, don't you think?

That's a pretty long stretch, given that heroin is not legal anywhere that I know of under any circumstances... furthermore, drugs always cause direct measurable damage to one's body. Gambling doesn't always cause damage, and when done in moderation should not pose any harm.

Again, remember you're being given a choice which is no different than getting a welcome bonus offer. Or look at it another way - you withdraw the money, then you redeposit it to get another bonus... the difference being that you've just cost the casino double processing charges. You are not absorbing these charges, unlike in a casino where you would pay the fees associated with using your CC to get cash.

And again I repeat - I don't like these offers - but if the player is given a choice, there is no reason to consider this unfair or unethical - they have a right to reduce their costs to provide service to you in a situation where you would otherwise be responsible for the processing fees.

 

[spearmaster]

Fair enough... I'm not so sure.

Everywhere should be like the Wagerworks or Cryptologic procedure; once you cashout and confirm - the money is already on its way to your designated destination automatically. Every online casino could very easily do this if they wanted... Less people, less hassle - all automated.They just don't want to... Wonder why?

A senior casino representative from a very well known online outfit once said to my face "without the problem gamblers who don't know when to stop - we wouldn't have a business". That's all well and good, but going out of your way to encourage it is, well, a bit off.

I'll tell you what - personally I hate reverse withdrawals. I recognize the fact that there is a reason for them - but I think there should be a maximum time limit for this to be offered. Didn't I already propose one? If not, then I propose that the maximum period for a withdrawal to be reversed should not exceed 24 hours...

... but frankly, I'd much prefer that my withdrawal be processed the instant I cashout...

 

[Slotster!]

they have a right to reduce their costs to provide service to you in a situation where you would otherwise be responsible for the processing fees.

I understand where you're coming from here mate, but come on, you're not going to seriously suggest that the casino's motivation behind these sort of offers is to save money on processing fees?

They know, plain and simple, that in a large number of cases - people who reverse withdrawals either end up losing the lot or withdrawing considerably less than they did in the first place.

 

[spearmaster]

I understand where you're coming from here mate, but come on, you're not going to seriously suggest that the casino's motivation behind these sort of offers is to save money on processing fees?

They know, plain and simple, that in a large number of cases - people who reverse withdrawals either end up losing the lot or withdrawing considerably less than they did in the first place.

Actually, I know this to be the case. As you might imagine, processing fees for high-risk merchants such as those in online gaming are quite high - up to 8.9% for Neteller, for example. I would be highly amazed if any online gaming operator had a rate with any payment method which costs less than 4%.

Contrast that with average CC rates of around 2-3% for normal merchants... and 2.9-3.9% for Paypal (which I already consider exorbitant).

Yes, it does often have the effect of causing players to lose their winnings... but do remember that players also win even after a reversal.

 

[Slotster!]

Actually, I know this to be the case. As you might imagine, processing fees for high-risk merchants such as those in online gaming are quite high - up to 8.9% for Neteller, for example. I would be highly amazed if any online gaming operator had a rate with any payment method which costs less than 4%.

Contrast that with average CC rates of around 2-3% for normal merchants... and 2.9-3.9% for Paypal (which I already consider exorbitant).

Yes, it does often have the effect of causing players to lose their winnings... but do remember that players also win even after a reversal.

Oh, I totally understand the cost of processing money for casinos, and that it's high. The thing is, that's completely by-the-by in this instance.

Either pass those costs onto your customers, or absorb them within your business or whatever; I don't understand how this relates to dissuading a customer to withdraw their winnings. I can't imagine them denying you a deposit because it costs them too much...

 

[spearmaster]

Either pass those costs onto your customers, or absorb them within your business or whatever; I don't understand how this relates to dissuading a customer to withdraw their winnings. I can't imagine them denying you a deposit because it costs them too much...

If the costs were passed on to you, the player, a Neteller deposit of $100 would net you $91.1 in play funds (excluding bonus). That's a pretty big hole to start from...

Absorbing the cost? Using Neteller with an example rate of 8.9%, when you make a deposit into a casino, for $100 you get $100 (excluding bonus). The casino gets $91.1.

Now suppose you get your funds up to $500 and withdraw. The casino is able to negate the fee of 8.9% on your deposit of $100 (by processing a refund, that's why you get $100 + $400 showing in your account), but they still have to pay 8.9% on the remaining $400 - so they've lost $400 + $35.6 in fees.

Then you decide to deposit the $500 back because you've changed your mind and want to play again. The casino gets $455.5, and you get $500 (excluding bonus). So the casino is starting out $435.6+$45.5 in the hole.

If you were to subsequently lose everything back, you'd be out $100. The casino would make $18.9 after all that, instead of $91.1 had you lost it after your initial deposit, or after a reverse withdrawal. And if you happened to come through an affiliate who gets 25%, they'd owe $25 to the affiliate too. That puts them in a net loss position. And don't forget software royalties, operational expenses, etc...

Instead of going through all that rigamarole, they offer you a reverse withdrawal bonus - which saves them the $35.6 in fees, plus potentially another $45.5.

Now you tell me - is that something reasonable for a casino to absorb? Wouldn't it be better to pass on those savings to the player in the form of a bonus?

 

[hitobito2005]

The transaction fees are large for the casino so I can understand why "reverse withdrawal" exists. However, it must be possible to run a profitable operation with instant or automatically flushed withdrawals because Wagerworks and Cryptologic casinos always do this.

If there was a big difference in profit to be made because of the existence of the reverse withdrawal feature, then i'm sure there would be hardly any operators choosing WW or Crypto software.

 

[spearmaster]

The transaction fees are large for the casino so I can understand why "reverse withdrawal" exists. However, it must be possible to run a profitable operation with instant or automatically flushed withdrawals because Wagerworks and Cryptologic casinos always do this.

If there was a big difference in profit to be made because of the existence of the reverse withdrawal feature, then i'm sure there would be hardly any operators choosing WW or Crypto software.

In the case of Crypto - only one operator remains... and with WW, they are all trusted brands which have a lower merchant risk.

Is it possible to run a profitable operation with instant/flushed withdrawals? To some extent, yes. But not all operators can do this without taking a substantial beating.

And do keep in mind that I used the highest known processing percentage in the example - obviously it wouldn't be quite as bad at say 5%, but you still get the idea.

 

[deltoid]

my 2 cents - reversal bonuses are exactly the same as deposit bonuses.

If it's a good offer then it might be worth taking, but if it's say $50 to reverse $1000, well then you'd have to be crazy to take that up!

 

[Slotster!]

If the costs were passed on to you, the player, a Neteller deposit of $100 would net you $91.1 in play funds (excluding bonus). That's a pretty big hole to start from...

Etc...

I do totally understand the financials involved, but that's an interesting insight - thank you!

This is completely missing the point though.

It's fundamentally wrong for someone to ask a casino for their money withdrawn, and for the casino response to this simple and straightforward request to be "how about we keep it, and here's an incentive to make you say yes?"

How on earth are the casino to know they will be saving 'processing' fees? The player in question might want to withdraw their cash - then never play there ever again; which of course they are quite entitled to do.

In order to avoid that scenario, as we spoke about earlier, the casino should then concentrate on its loyalty and customer incentives to ensure they keep the customer coming back for more.

Whilst the financials from the casino perspective make perfect sense with a regularly depositing player - they've got no right to attempt to 'force' this scenario and savings on someone simply asking for their money back.

 

[spearmaster]

It's fundamentally wrong for someone to ask a casino for their money withdrawn, and for the casino response to this simple and straightforward request to be "how about we keep it, and here's an incentive to make you say yes?"

The way you put it is, shall we say, overkill?

The way it is usually presented is a lot more straightforward than that - something like "if you reverse your withdrawal, we'll credit your account with an additional 50% bonus".

How on earth are the casino to know they will be saving 'processing' fees? The player in question might want to withdraw their cash - then never play there ever again; which of course they are quite entitled to do.

And they have the choice to refuse the offer and be paid - what is it that you are not understanding?

They are not coerced into taking the offer, nor are they likely to take the offer if they have no plans to return.

In order to avoid that scenario, as we spoke about earlier, the casino should then concentrate on its loyalty and customer incentives to ensure they keep the customer coming back for more.

This isn't going to avoid the scenario, and besides, isn't a bonus a customer incentive?

I know what you're getting at though, so I agree.

Whilst the financials from the casino perspective make perfect sense with a regularly depositing player - they've got no right to attempt to 'force' this scenario and savings on someone simply asking for their money back.

They are NOT forcing a scenario. The player is NOT forced to accept the offer. As long as they don't sit there and play the bargaining game, there should be no issue with this at all.

If, however, they try to sweeten the original offer, or they introduce any other condition (such as additional delays) because the offer was not accepted, I would consider that unethical. But a one-time offer of a bonus to reverse the withdrawal is NOT a problem - is it that hard for you to say "no" if you don't want something?

 

[Slotster!]

- is it that hard for you to say "no" if you don't want something?

Well, for me, no.

The issue here is the ethical treatment of players in relation to a the casino's obligation towards problem gambling.

I absolutely understand where you are coming from, and for me I'd hopefully just laugh and say no thanks (or more likely accept the offer and blow the lot - but I never learn)

For a problem gambler though, I just don't think it's right that there should be this 'step' and opportunity for potential downfall in the middle of what should be a simple procedure.

I know you have excellent 'insider' knowledge of the industy Spearmaster. In your honest opinion, do you agree with the casino rep I spoke to when he maintained that without problem gamblers, they'd be finished as a business?

 

[Slotster!]

I just remembered something as well... I made a 3000 withdrawal from Belle Rock once and, whilst not refusing the withdrawal or 'holding on' to it - they did call me immediately and offer me a 200% deposit bonus - only applicable if taken in the next three days. With Belle Rock's mandatory 24hour reversal period, of course it made perfect sense for me to reverse some of the amount that was sat there and take advantage of the offer.

I didn't as it goes - but I guess that's a slightly more reasonable way of going about things.

I still prefer the free cash in your account route though

 

[spearmaster]

The issue here is the ethical treatment of players in relation to a the casino's obligation towards problem gambling.

.snip.

For a problem gambler though, I just don't think it's right that there should be this 'step' and opportunity for potential downfall in the middle of what should be a simple procedure.

You have to understand - a problem gambler should not be in the casino in the first place - and certainly not every player offered a reverse withdrawal bonus is a problem gambler - I'd say this would be a very minor percentage. You would probably not be correct in assuming that every player offered this bonus does not want it either.

Taking it from your point of view - one could say that a casino should not be open because they have an obligation towards problem gambling.

Or else - there is no issue.

I've spoken at conferences on problem gambling - and in fact my recommendations are the basis for many of the regulations being implemented in Singapore for their upcoming land-based casinos.

I know you have excellent 'insider' knowledge of the industy Spearmaster. In your honest opinion, do you agree with the casino rep I spoke to when he maintained that without problem gamblers, they'd be finished as a business?

I do not agree. I think you should treat that as a light-hearted comment. No gambling jurisdiction, land-based or online, would ever tolerate anything near a majority of players being "problem" gamblers.

Unless, of course, the particular casino you were referring to was a rogue casino... in which case I could possibly believe it because no player who wants to be treated properly would likely play there.

I just remembered something as well... I made a 3000 withdrawal from Belle Rock once and, whilst not refusing the withdrawal or 'holding on' to it - they did call me immediately and offer me a 200% deposit bonus - only applicable if taken in the next three days. With Belle Rock's mandatory 24hour reversal period, of course it made perfect sense for me to reverse some of the amount that was sat there and take advantage of the offer.

I didn't as it goes - but I guess that's a slightly more reasonable way of going about things.

What makes this any different from what we've been discussing? You prefer a phone call instead of an email? Some gamblers do not tolerate phone calls under any circumstances...

... and at 200%, I bet the playthrough would've been enormous...

 

[Tengil]

You have to understand - a problem gambler should not be in the casino in the first place - and certainly not every player offered a reverse withdrawal bonus is a problem gambler - I'd say this would be a very minor percentage. You would probably not be correct in assuming that every player offered this bonus does not want it either.

Taking it from your point of view - one could say that a casino should not be open because they have an obligation towards problem gambling.

Or else - there is no issue.

I've spoken at conferences on problem gambling - and in fact my recommendations are the basis for many of the regulations being implemented in Singapore for their upcoming land-based casinos.



I do not agree. I think you should treat that as a light-hearted comment. No gambling jurisdiction, land-based or online, would ever tolerate anything near a majority of players being "problem" gamblers.

Unless, of course, the particular casino you were referring to was a rogue casino... in which case I could possibly believe it because no player who wants to be treated properly would likely play there.



What makes this any different from what we've been discussing? You prefer a phone call instead of an email? Some gamblers do not tolerate phone calls under any circumstances...

... and at 200%, I bet the playthrough would've been enormous...

Actually 90% of the casinos revenue (B&M in USA) comes from 10% of the players of which the majority are problem gamblers. I dont know what the figures are online but its safe to assume that they also make most of their profit from problem gamblers.

So they dont need the majority of the players to be problem gamblers when 10% is enough.

 

[hitobito2005]

It depends how you define "problem gambler".

There was a documentary made by Louis Theroux shown in the UK a couple of years ago where he travelling to Las Vegas to see how casinos encourage gamblers etc. There was one old woman who was a multi-millionaire who just sat there at a slot machine all day every day, slowly burning her money. She had dropped several million dollars in the last few years. The casino looked after her well and encouraged her.

There were other similar examples.

It was all B&M stuff but i'm sure the online casino world has equivalents.

It must be hard for a casino to draw the line at what exactly a problem gambler is, given that the main aim of a casino is to encourage people to gamble.

 

[spearmaster]

Actually 90% of the casinos revenue (B&M in USA) comes from 10% of the players of which the majority are problem gamblers. I dont know what the figures are online but its safe to assume that they also make most of their profit from problem gamblers.

So they dont need the majority of the players to be problem gamblers when 10% is enough.

Your source please?

It depends how you define "problem gambler".

There was a documentary made by Louis Theroux shown in the UK a couple of years ago where he travelling to Las Vegas to see how casinos encourage gamblers etc. There was one old woman who was a multi-millionaire who just sat there at a slot machine all day every day, slowly burning her money. She had dropped several million dollars in the last few years. The casino looked after her well and encouraged her.

There were other similar examples.

It was all B&M stuff but i'm sure the online casino world has equivalents.

It must be hard for a casino to draw the line at what exactly a problem gambler is, given that the main aim of a casino is to encourage people to gamble.

I suppose that's a good point - but if an old lady who is a multi-millionaire can afford to do that, and she is not in any financial difficulty, I can't quite see where the casino can tell her what not to do with her money!

Obviously we would need to know exactly what "encouragement" means in this case - free room/board (normal), free drinks (normal to an extent), cheering her on (strange)... certainly there should be some limit as to what kind of encouragement a casino can provide to a patron.

... ok, I just read a few summaries online - her husband's memorial service was held at the casino, FOC (weird - but I guess she asked for it, I can't see the casino offering it)... and she's an 80-year-old doctor (clearly not uneducated).

Most important to note - when Theroux went back to harangue her son about his mother's gambling, he said "She wants to gamble, it makes her happy so that's all right with me."

xxhttp://www.guardian.co.uk/culture/tvandradioblog/2007/feb/05/louisdoeslasvegas

 

[Tengil]

Your source please?

Had that report on my old computer, will see if I find it later. Heres just one I found. The figures arent quite that extreme as the ones I quoted earlier.
Old / Expired Link

Overall for those interested worth to google "gambling cost benefit" without the quotation marks. Barney Frank could read some of those too.

 

[spearmaster]

Had that report on my old computer, will see if I find it later. Heres just one I found. The figures arent quite that extreme as the ones I quoted earlier.
Old / Expired Link

Overall for those interested worth to google "gambling cost benefit" without the quotation marks. Barney Frank could read some of those too.

Just read it - thanks.

I'm not quite sure what kind of conclusion can be drawn from this summary of Professor Grinol's study on Gambling Economics, though.

In this summary, he uses data extracted from different parts of the world (ie. Australia and Canada), as well as a few states like Montana, South Carolina and Florida - and notably misses out Vegas and Atlantic City.

Needless to say, the culture, traditions and especially economics of these varied areas differ significantly and I do not see a good reason for them to be linked together by the tenous similarity of "gambling".

Each area needs to be studied in respect of its own situation. Certainly one would find it hard to believe that Montana and Vegas can be compared to each other...

That being said, there are some useful numbers in there - like 48.2% of machine revenues being derived from pathological and problem gamblers in Australia, 58% in Ontario, 37% in Montana.

I already know about the problem in Australia, but there it is mainly a social problem which the government doesn't seem to be too interested in, and it relates primarily to pokie parlours - guess the equivalent would be a slots club or perhaps the local convenience store in various states, or in the UK these are actually considered arcades or casinos. And needless to say, the most affected are the lower-income groups, many of them Aboriginal.

Online, however, there is no real way to make similar observations - casinos don't ask for your ethnic origin, or income level, etc., nor are they able to physically observe this. The best that can be done is gender, nationality, age, preferred game, size and frequency of deposits.

The only way I can think of which may provide some hint into problem gambling is if a player makes many small deposits (similar to sticking in many $1 bills into a slot machine, rather than $100), or uses many different payment methods (like trying all your credit cards for cash advances). Game selection might provide additional insight, since most problem gamblers are likely to be chasing big wins for small bets.

But other than that - it's certainly not clear-cut, and definitely much more difficult online.

If you do find other research, I would be most interested in reading it