Caesars Interactive Is Fined $10,000 for Sending Promotional Material to Problem Gamblers

Last updated on November 2nd, 2018

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Caesars Interactive became the first online gaming company in New Jersey to be fined for violations of state law. Caesars was fined $10,000 for violating the state’s self-exemption laws for problem gamblers.

Between February 16 and May 28 of this year, Caesars Interactive mailed promotional material to 250 people who had registered for New Jersey’s self-exclusion list.

How the Self-Exclusion List Works

Signing up for the banned list means the player is not supposed to be allowed to gamble inside a land-based casino in the state. Their name and information goes on a database, either for 1-year or 5-year bans. When someone gambles and uses their personal information (credit cards, slots cards, etc.), that player is referenced against that database.

Sometimes, players sign up for the self-exclusion list and have a moment of weakness. If they go into the casino and use cash, they might play for a while before being spotted. When the casino’s staff becomes aware of their identity, the casino is required by law to end their session. If the player won during their session, their winnings are subject to forfeiture.

Online Exclusion List

The self-exclusion list has two components to it: the brick-and-mortar casinos and the online gaming sites. A player can ban themselves from either type of casino, or both.

When they do so, the online gaming company’s casino software automatically references all signups against the banned list. Gamblers on the list are not only barred from playing online, but the operator also cannot send promotional material, comps offers, or other enticements to gamble. To do so is a serious offense under New Jersey law, because it’s seen as exploitation.

Fined $10K by the DGE

Caesars Interactive Entertainment was fined $10,000 by the state Division of Gaming Enforcement. Kerry Langan, a spokeswoman for the state Division of Gaming Enforcement, told the Press of Atlantic City this was the first such incident since online gambling launched in New Jersey in November 2013.

Caesars Interactive Told Regulators of the Problem

Seth Palansky, vice president of communications for Caesars Interactive, said that the gaming company accepted full responsibility. Mr. Palansky also expressed his company’s regrets for “the harm this incident may have caused.”

According to the company spokesman, a systems error caused the promotional material to go to the excluded players. He said Caesars Interactive reported the problem to regulators as soon as it was discovered, then moved to fix the problem to avoid future situations.

Issue Has Been Fixed

Seth Palansky told the Press of Atlantic City, “The issue that caused our system to inadvertently target these patrons has been fixed and we have had no incidents since. We can assure the public that this lapse on our part was not an intentional targeting of these patrons, but simply a back-end software issue that failed to properly scrub our database before certain mailings.”

Caesars Interactive is the Internet division of Caesars Entertainment, the largest gaming company in the American market. Though Caesars Entertainment has been surpassed in global revenues by rivals like Las Vegas Sands Corporation, Wynn Resorts, and MGM Resorts, the company owns more casinos in Atlantic City than any other operator.

Caesars Entertainment in 2014

2014 has not been a good year for Caesars Entertainment. The company is saddled with $23 billion in debt. Caesars closed the Showboat Casino in Atlantic City, while closing the Grand Tunica Casino in Mississippi. Most financial analysts believe the company is headed towars bankruptcy. In fact, when CEO Gary Love moved casino assets from the Caesars Entertainment Operations Company (CEOC), many observers thought it was a set-up for an eventual bankruptcy. CEOC holds $18 billion of Caesars’ debt, so the move looks like a raid on assets of a bankrupt division.

Whatever the case might be, the current fine is the least of Gary Loveman’s issues. While it’s never good to possibly offend customers with inappropriate promotional material, a $10,000 fine pales in comparison to the over $2 billion in interest payments the company makes every year.