Facebook recently received a $5 billion fine from the Federal Trade Commission for mishandling users’ personal information. But how does Facebook’s handling of personal information affect its users?
In this partnership with PBS NewsHour, Reveal examines how Facebook is partnering with social casino games to monitor and analyze the behavior of vulnerable players. The companies are using big data and advanced software to predict which people will spend massive amounts of money on the games and then targeting these people with aggressive marketing.
For some people, these games result in financial ruin. Suzie Kelly, a grandmother from suburban Dallas, ultimately spent $400,000 playing a virtual slot machine game on the Big Fish Casino app on her iPhone. She took out two home equity loans, spent her family inheritance and borrowed money from her husband’s 401(k), all to pay off credit card debt from the game.
And the kicker? She can’t win any money in the game. It’s not traditional gambling. Players can never cash out their virtual chips for real money. They’re paying only to buy more chips, which allows them to spend extra time in the game.
“So this is, in some ways, pure addiction,” says Keith Whyte, executive director of the National Council on Problem Gambling.
Social casino games, such as slot machines and poker games on Facebook and mobile devices, have become a $5 billion-a-year business, with revenues nearly as large as all the Las Vegas Strip casinos combined. But because the games are classified as entertainment, they are not subject to any gambling regulations. So there is nothing stopping tech companies from monitoring, analyzing – and targeting – those with addictive personalities.