loyalty at any price

I’ve been asked many, many times about the difference between voluntary and mandatory pre-commitment for poker machines. Why is it that industry and state governments are so fixated on the idea of voluntary pre-commitment? The simple answer, to borrow a line from Clubs Australia’s recent campaign, is that it “won’t work” and “will hurt”. In other words, voluntary pre-commitment is backed by those with a vested financial interest because it will have no impact on their bottom line.

It really is that simple. The basic principle behind pre-commitment is that you pre-commit. You make a choice before you play. A pre-commitment system that allows poker machine players to change their minds, to “voluntarily” choose to ignore that commitment while playing, negates the entire concept.

Look at it this way. Imagine you’ve walked into your local venue having decided that you were going to spend a maximum of $100. An hour later, you’ve blown your money and want to spend more. If your pre-commitment was “mandatory”, you wouldn’t be able to. Your original choice would be enforced. But if it was voluntary, you could ignore that choice and keep on playing.

The absurdity of voluntary pre-commitment was highlighted in a recent Victorian Government discussion paper which contained, amongst other things, the prospect of using incentives like loyalty schemes to encourage poker machine players to use voluntary pre-commitment.

The paper stated:

It is important that a reasonable proportion of players take up pre-commitment, particularly those players at higher risk because they gamble at least once a fortnight, and new players who have not played gaming machines before.

Players are more likely to use pre-commitment if they are aware that it is available on all gaming machines, are informed about the purpose and potential benefi ts of pre-commitment, and there are incentives for them to do so.

Encouraging take-up would be through a combination of an effective communications strategy and incentives. Incentives could be aimed at motivating players to sign up for pre-commitment as well as encouraging venue operators to promote pre-commitment to their patrons.

While there may be a variety of incentives that could be employed to encourage the take-up of pre-commitment, the most commonly cited incentives (for players and venue operators) involve linking pre-commitment with cashless gaming and loyalty programs.

Think about that for a moment. Here’s a government that vehemently objects to mandatory pre-commitment, and which earns millions of dollars every year from poker machine taxes, saying that pre-commitment is so important that they’ll bribe gamblers to use it. Not only that, but they’re specifically targeting “new players who have not played gaming machines before.”

We’re through the looking glass, people. This isn’t a government; it’s the Spring Street RSL.

The media naturally picked up on the government’s intentions, but the government has had little to say other than “the provision of incentives to use pre-commitment may play a part in this.” Of course if Baillieu, O’Brien and the rest of them decide to power ahead with this insane plan, they don’t have too far too look for working examples. Australia’s clubs have been running loyalty schemes on their poker machines for years. They know how to make it pay.

Take Smithfield RSL, for example, or Campbelltown Catholic Club (the King of Clubs), or even Central Club Hurstville. They all operate similar loyalty schemes, where members get:

* 1 point for every $1 spend on non-gaming purchases
* 1 point for every $5 turnover from gaming machines
* 1 point for every $25 turnover on multi-terminal gaming

It’s interesting to note that each of these gambling halls runs those casino machines I wrote about a few days ago. The reason you have to spend five times as much on blackjack or roulette to get a point as you do on poker machines is ridiculously simple: they make five times as much money as poker machines.

How about Mingara Recreation Club? They have a similar scheme, but once you’ve accrued thousands of points and become a “diamond” member, you get a better points rate on poker machines. Nice of them.

Or for something a little different, you could try Harbord Diggers, a part of the Mounties Group. Quite apart from their loyalty scheme, if you stick your membership card into a poker machine at the right time of the week (and play, of course) you score entries into their “Spin It 2 Win It” and “Pot Of Gold” cash giveaways. The more you spend on the pokies, the more entries you get.

Still, at least all of these venues let you accumulate points in other ways, such as spending money on their gambling-subsidised beer and meals. Not so Parramatta Leagues Club. According to their official Player Rewards program terms and conditions, the only way to earn points is by playing poker machines or electronic blackjack or roulette (yes, Parra Leagues wants to be a casino too). So if you want to be a loyal Eels member, you’d better start gambling now!

When it comes to poker machines, loyalty schemes are like a rash on Australia’s collective backside. They beg the question: how could the industry have possibly run their campaign screaming about a “licence to punt”, about the invasion of privacy that goes with gamblers registering for a card, when they’ve been encouraging their members to do exactly that for years?

And how can a government with even a modicum of self-respect suggest that offering the general public incentives to use voluntary pre-commitment, in other words incentives to gamble, is a good idea?

This is not a good idea. But sadly, they have no idea.

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1 Response

  1. Cathy says:

    Yes, already well aware of these issues/inconsistencies along with many more that defy logic in relation to this poker machine saga. Although I personally had no real involvement with these schemes, due to spending so much time in different clubs over so many years I did however see very clearly how such inducements worked on people and I often found myself being cynically ‘amused’ by the whole thing. I even know of someone who received a phone call from a club she frequents and was queried about a rather modest amount of credits which were left by another person on a machine she then played. From what she told me it was through the use of her card they were able to trace the discrepancy back to her. It was not intentional on her behalf and the matter was quickly resolved but the fact they rang her up etc rattled her nonetheless.

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