U of Ideas of General Interest -- September 1999
University of Illinois at Urbana-Champaign
Contact: Mark Reutter, Business & Law Editor, (217) 333-0568; [email protected]
CASINO MARKETING
Promotions target bored, lonely and vulnerable elderly, scholar says
CHAMPAIGN, Ill. -- The marketing of gambling to the elderly presents unique problems that should be addressed by state regulators and nursing home operators, a University of Illinois legal scholar asserts.
Promotions that target the elderly have become a highly specialized business, according to Erika Gosker. Casino bus services, buffet discounts and giveaway promotions often coincide with the receipt of pension and Social Security checks. "The industry has even invented a term, 'third-of-the-month club,' to describe elderly gamblers who gamble once they have received their Social Security checks," Gosker writes in the current issue of the Elder Law Journal published by the U. of I. College of Law.
Market research and tracking systems further identify which people spend the most money at casinos, and special promotions are then developed to lure the "big spenders" back to the gaming table. As a result, as many as 95 percent of the people going to casinos during the week on tour buses are now retired or senior citizens.
This clientele is especially vulnerable to the lure of betting, Gosker asserts. "Many senior citizens gamble because they are bored and lonely. Loneliness represents the most common characteristics among the elderly that direct marketers cite as a reason to target the age group. In addition, casinos target the elderly because they have time to visit casinos. Similarly, direct marketers target the elderly because they have the time to listen to the marketers' promotions."
Easy access to casinos as well as to state lottery games increases the probability that some of the elderly may become problem gamblers. Gosker singles out state lottery ads that focus on the size of the jackpot and fail to disclose the slim odds of winning as especially pernicious. "Such promotions prey on the dreams of the elderly without much hope of actually fulfilling them. Considering that large prizes tend to be distributed as 20-year annuities, winning the lottery will be of little help in fulfilling these dreams. In addition, the inheritance tax on the annuity value of the remaining payments at the time of the winner's death must be paid in a lump sum. Thus, the beneficiaries of the prize may have difficulty paying the inheritance tax."
While the National Gambling Impact Study Commission recommended in June that curbs be placed on gaming aimed at young adults, the panel was silent on the impact of gambling on the elderly. Gosker argues that elderly gambling may have serious long-term consequences because senior citizens do not have the time or earning potential to recoup gambling losses.
Gosker says that nursing-home operators should take an active role in preventing casinos from targeting residents in their care, and Congress should apply truth-in-advertising statutes to state lotteries to prevent misleading advertising.
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