Loose Cannon: One Casino Would Rather Switch Than Fight

Folks, I’m torn. On the one hand, I am militantly anti-cigarette. On the other, I genuinely enjoy writing about direct marketing. So when cigarettes cause a casino to abandon direct mail, thereby reducing the number of companies potentially interested in Direct magazine by one, I’m confused in regard to where my sympathies should lie.

Here’s what happened: On Jan. 1, Illinois implemented a ban on smoking in public places. Since then, revenue at several Prairie State casinos owned by Penn National Gaming has dropped by 20%, according to Illinois newspaper The Beacon News.

While Penn National spokesman Eric Schippers did make a nod toward the slowing economy, in the Beacon News story he was more than happy to attribute most of the property’s ill fortune to the loss of customers caused by the smoking ban.

Hollywood Casino, one of Penn National’s properties, sought to replace these lost smoking gamblers by renting nearly 16,000 names from a company that operates ATMs within casinos, according to ChicagoBusiness.com. In late January, each of these individual received a “blind prospect mailing” effort, as the Beacon News termed it, containing coupons and other come-hithers.

No word on whether any of the incentives included free nicotine patches, although it would seem a natural fit.

Now, I love the term “blind prospect mailing.” It conjures up a casino willing to offer special roulette wheels for the visually impaired (as the little ball falls toward the center, an excited voice calls out “Red 11! No, black 47! Wait, it’s… green zero! Sorry, y’all, race you to the free buffet…”)

Blind prospect mailing or not, at least 146 of the prospects saw well enough to recognize what the mailing was selling. And those 146 prospects were problem gamblers who had enrolled themselves in the Illinois Gaming Board's exclusion program, and complained when they received this solicitation.

According to the program’s dictates, those on the list have agreed to be banned from casinos – and are on a “do not promote” list casinos must use.

The Illinois Gaming Board saw the promotion as well, and hit the Hollywood Casino with an $800,000 fine, according to The Beacon News. (This is not Hollywood Casino’s first transgression: A 2006 mailing received by 38 exclusion program registrants caused the casino to cough up $200,000, according to The Beacon News. In that mailing, Hollywood Casino did use the do not promote list, but the version it used was outdated, The Beacon News said.)

The current misstep resulted in several Hollywood Casino employees being temporarily suspended without pay. And Penn National Gaming is giving up mass mailings to prospective customers, not just at Hollywood Casino, but throughout all nine of its Illinois properties.

Penn National took a baby-with-the-bathwater approach, and it’s damned unfortunate. Its decision represents a loss for list brokers, printing facilities and promotional piece designers, among others. The casino still has a 20% revenue shortfall, and an effective marketing channel, inexpertly used, is no longer available to it.

Really, it’s enough to make one reach for a cigarette.

To respond to the opinions in this column, please contact richard.levey@penton.com.