Not-so-Free Willy

Typically when someone goes off on their “corporations are evil” speeches I just stay silent until they zip up their Northface coat, grab their Starbuck latte, start up their Toyota Prius and head off to Target to pick up a copy of Toy Story for their kid’s sleepover party. But this is one case in which the hippies might be right.

 

In case you don’t want to read the long version in the link above, here’s a quick summary.

1. Poorly socialized child is groomed into running the family business and builds an empire in the party-favor industry (and yes, in this case empire is not being thrown around loosely).
2. Businessman looses $127 million gambling at Harrah’s… in 2007 alone… accounting for over 5% of Harrah’s total revenue from Las Vegas area gambling that year.
3. Harrah’s sues businessman for $14 million after he fails to repay a gambling line of credit they extended him.

Now this is an Epic Fail on multiple fronts (where is this guy’s accountant), but when you claim that “promotion of responsible gaming is part of your heritage and culture” you’re held to a higher standard. If I wanted to go on an anti-corporate conspiracy argument I could dust off a Michael Moore book and say the whole campaign is a way to lure compulsive gamblers into gambling at Harrah’s since the casino will cut them off if they get in over their head. But there’s plenty more to talk about.

 

That “culture of responsible gaming” doesn’t appear to be relative to at least one competitor. The gambler in question was a frequent patron of Wynn’s prior to moving to Harrah’s in 2007. But “his heavy betting attracted the attention of Wynn’s CEO,” who met with the gambler, determined he had a problem and barred him from his casinos. That act speaks more to a culture of responsible gaming than a web page, series of television commercials and a mission statement.

But Harrah’s manages to rocket past bullshit customer friendly façade and take this to a level that can best be described by a Dennis Leary song. Apparently, taking over $100 million off of him in a year isn’t quite enough. Harrah’s has the guy facing criminal charges for failing to repay a $14 million marker the casino issued him, which in Nevada means that he’s facing down 28 year prison sentence. By my math this guy is getting one third of what Bernie Madoff got… and while it took Madoff 20 years to ruin the lives of thousands of people, it took the casino only a year to ruin this guy’s life. Yeah, that seems fair.

 

You’ll forgive me if I have trouble emphasizing with Harrah’s, because on top of the moral problems on display I am only slightly less disgusted with their lack of intelligence. Running a casino is a highly competitive, complex business built on long-term statistical odds that play to the house’s favor. And for all this “talent” running the company, you’d think that someone might have raised a red flag before extending a $14 million marker to a guy that’s $100 million in the hole for the year. I’m not sure I need a Harvard MBA to see that this might not be a great investment.

 

All in all not a very good showing for Harrah’s. Take a man’s personal fortune in a single year, check. Push to throw a man in prison for 28 years because of behavior you enabled, encouraged and profited handsomely from, check. Destroy corporate reputation, check.