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Unfaithful Husbands, Internet Hackers, and Your Casino’s Rewards Program

Unfaithful Husbands, Internet Hackers and Your Casino's Rewards Program
Posted on Sep 1, 2015 in Casino Marketing Comments

A recent article in Gizmodo offers an interesting take on the recent Ashley Madison security breach. For those of you whose newsfeeds didn’t flag this gem, Ashley Madison’s business model is best summed up by their tagline “Life is short. Have an affair.” They promise to discreetly connect married people who’re searching for anonymous extramarital extracurriculars. Their site was recently hacked, and its entire user database was posted for the world to see.

31.5M of the site’s 37M paid subscribers are male, and a quick look at the data revealed that roughly 95% of the site’s alleged 5.5M females never actually existed. Gizmodo says, “When you look at the evidence, it’s hard to deny that the overwhelming majority of men using Ashley Madison weren’t having affairs. They were paying for a fantasy.”

Like me, maybe you saw parallels between Ashley Madison’s subscribers and casinos’ players club members. For starters, Ashley Madison recognizes the value of data and keeps detailed records on the ways in which members use their site. Likewise, club members are the backbone of every profitable casino. They are the casino’s regulars—repeat customers who redeem coupons, bring their families, and tell their friends. But casino rewards programs were not built in response to consumer demand. Despite catchy monikers that promise exclusivity by differentiating between gold status and platinum, incentivizing repeat visitations was a secondary benefit to the grander scheme of tracking the spending habits of the casino’s bread-and-butter customers.

Data collection is far more vital to the casino than the club benefits are to the players. Don’t get me wrong, club members get excited for discounted buffets, free concert tickets, and comped hotel stays, but what’s bringing them through the door is the possibility of hitting it big.

Gizmodo says, “The men’s [data] tell a story of lively engagement with the site, with over 20 million men hopefully looking at their inboxes, and over 10 million of them initiating chats. The women’s accounts show so little activity that they might as well not be there.” To rephrase that in casino terms: 31.5 million men are playing a low-stakes game in which the hypothetical reward of a potential jackpot outweigh the expense of ongoing monthly subscription fees.

These would-be-cheating husbands are remarkably loyal to Ashley Madison’s nonexistent women. They pay for the pleasure of repeatedly checking their inboxes on the off chance that anonymous women in undisclosed cities might send them a digital ‘wink.’ These men receive no female contact (written or otherwise) yet continue “playing” because they enjoy the fantasy. Consummating an affair is not the expected outcome, but it is a possible outcome, and that’s enough to keep them financially engaged.

Admittedly, it’s tempting to run the whole gamut of puns comparing the casino-industry to Ashley Madison’s payout system. (Much of the leaked data is hysterical. For example, the 1,492 women who checked their messages is compared to the 20,269,675 men who did likewise, and this is visualized for readers through the world’s least digestible bar graph.) But the point I mean to drive is that casino operators often misinterpret their players’ intentions and put too much stock in their players clubs. Despite the flaring tempers you may see in VIP lines, those benefits are not the ultimate reward that brings players back time and again.

Gizmodo’s analyst is only confident that 12,000 women ever existed, because that’s how many paid to cancel their subscriptions. But even if 5% of 5.5M were real, that’s only 275,000 members. Small potatoes compared to the tens of millions of men who pay monthly subscriptions. One Ashley Madison employee “claimed that she’d gotten repetitive stress injuries in her hands after the company hired her to create 1,000 fake profiles of women in three months.” The company denies it, but that doesn’t matter for the analogy: these fake women were not the equivalent of buy-one-get-one steak dinner rewards. They were the equivalent of oversized checks and the chance to retire to Bora Bora.

Like Ashley Madison, casinos need to keep their customers’ dreams alive. Rewards clubs have their place, but what brings players through the door is the chance that they might—in spite of overwhelming odds and all evidence to the contrary—eventually hit the jackpot.

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