Harrah's casinos and the Angie Bachmann gambling addiction case

Harrah's Dilemma

Harrah's use of technology and customer information to draw in gamblers to their casinos illustrates a number of interesting ethical considerations. Advances in neuroscience have provided a better understanding of how the brain works in relation to addictions and gambling. Some people have predispositions that can make them naturally attracted to different compulsions. Angie Bachmann was an individual that seemed to have such a predisposition to gambling and Harrah's Casinos took actions that played to her particular habits. This case illustrates the ethical dilemmas that are involved in coaxing someone into self-harming behaviors. Angie's debts may be entirely legal, yet they are also entirely unethical. However, there are also more subtle examples of using personal data to influence decision making that will be discussed as well. At the root of the issue, is the extent free-will should be considered in the face of a growing scientific understanding of the power of habits and neuroscience. It also calls into question the responsibilities to the individual that exists with the emerging knowledge about the brain and decision making.

Case Background

Angie Bachmann had a wonderful life by most people's standards. She was an attractive lady and seemed to have a loving family. She also had an inheritance that could have provided her a high standard of living for the rest of her life if it was properly managed. However, unfortunately Angie had an expensive addiction that developed. Harrah's casino eventually claimed all of her financial resources.

The addiction seemed to develop over time. At first Angie gambled for entertainment and would go to the casino as a reward and a break from the monotony of her life. However, by making the experience a habit, it eventually developed into a costly addiction. Harrah's casino seems to provide the foundation for this experience. The organization understand human behavior incredibly well and designs its operations to maximize their revenues by trying to make the experience habitual. They use business intelligence to collect personal data about their customers and there gambling habits and they use this information to develop habits in their customer base.

Harrah's is in an industry that has an inherent ethical dilemma. While they have an ethical obligation to combat compulsive and addicting gambling, they also have a responsibility to their shareholders to maximize their revenues. Assuming that Harrah's maintains its position on prohibiting addictive gambling, its objective would be to keep their customers just shy of addictive practices. For example, Harrah's ideal customer would be one that gambles extensively, but isn't quite as damaging to the individual to be classified as an addiction. Wherever the line exists between addiction and entertainment, Harrah's profits most from pushing or coaxing people to this imaginary line.

Discussion

There are several different forms of gambling or gaming that are available in modern society. People can bet on sports games, scratch cards, or any of the fast-paced games in a casino or online. Gambling addiction, also known as compulsive gambling, is a type of impulse-control disorder; compulsive gamblers can't control the impulse to gamble, even when they know their gambling is hurting themselves or their loved ones (HelpGuide.org). Although the financial aspects of compulsive gambling are often the focal point of measuring the harm to individuals, there are also other detrimental effects other than money.

Gambling is not a financial problem, but an emotional problem that has financial consequences (Nordqvist). Gambling is also associated with symptoms such as depression, craving, remorse, loss of control, loss of sleep, stress, and obsession among others. Many people can inadvertently develop unhealthy gambling habits if they are not aware of the risks and understand how to gamble responsibly. There seems to be some evidence that there is a genetic predisposition that people can have which draws them to problems with addictive behaviors which can also include drugs and alcohol (Nordqvist).

Experts on pathological gambling have shown that the prevalence of this disorder is linked closely to the accessibility and acceptability of gambling in society; like alcoholism, just a small percentage of Americans are susceptible (Horn). The legalization of gambling makes it possible for more people to be exposed to the risky consequences that are associated with this practice. Many studies have shown that state's that have legalized gambling have increased the percentage of the population that have a gambling addiction -- sometimes by more than a factor of three. It is not just the individuals with the gambling addiction that suffer. One study showed that since casinos came to the Mississippi Gulf Coast, domestic violence has increased 69% and an estimated 37% of all pathological gamblers have abused their children (Horn).

Many claim that the legalization of gambling offers many economic benefits to the community. The casino industry adds jobs to the local community and pays taxes on their revenues which can contribute significantly to state's budgets. These contribution can be significant in many regards. In Atlantic City, one study showed that the casinos were able to generate almost fifty thousand jobs and increase their property taxes by over twenty times which go to the local community (Teke and Sur). However, the casinos also brought a slew of social problems to the community as well. In Atlantic City many of the residents are still poor and unemployed and there have been increases in problems like crime and prostitution. The benefits from the financial contributions from casinos to the community are not evenly distributed.

Harrah's and other companies in the industry compound these problems by simply operating effectively from the perspective of their organizational stakeholders. The advances in technology has allowed the casino industry to collect data about an individuals and use this information to market to them on a personal level never before imagined. Reports generated around various personal metrics are an example of Business Intelligence; many of these reports are built into various database platforms and are being marketed by companies such as SAP, IBM, and Oracle (Staples). Furthermore, these companies can also purchase data about individual's personal lives from a slew of third-party providers that excel in data collection. In this environment, Harrah's can actually directly target individuals that are predisposed to gambling.

Harrah's profits by using intelligence to influence their target market into damaging behaviors. With the development of business intelligence, they can target vulnerable individuals directly and influence their behavior by offering them specials or free offers. While this is clearly unethical since they are strategically guiding people towards addiction, other examples of the use of business intelligence are not quite as clear. For example, the same information can be used to influence shopping decisions or even political decisions. Technology has allowed a level of targeted marketing that is based on psychological profiles and can influence decision making on level never before imagined. Using this information to influence individuals is a problem on many levels with organizations like Harrah's at the center of the debate.