Schuetz: Gaming Regulators And Sludge — Stopping The Nonsense

“If lies were currency, you’d be rich by now.”

— Unknown

It seems that my world has become more challenging to navigate as I have gotten older. I remember back in the day when Verizon had a simple number to call when a person subscribed to their phone service, and a pleasant human being answered and generally solved the problem quite quickly. It was very cool. It was why I was so loyal to Verizon. Now, I dread any time when I have to address an issue that involves Verizon.

In my life today, whenever I reach out to a company with a question, try to resolve an issue, or stop a subscription, it often takes an eternity, and frequently, nothing is resolved, leaving me feeling annoyed and angry. My concern has been that I am slowing down and/or don’t understand modern processes. 

It was a refreshing awakening when I came across an article by Chris Colin in The Atlantic entitled “That Dropped Call With Customer Service? It Was On Purpose.” In this article, it is suggested that much of the annoyance I feel is totally justified, and it is orchestrated by the firms I deal with.

That was quite a shock to someone who went through a prolonged management phase during their career of having been schooled on the importance of delivering excellent customer service. Silly me, so old school.

The Atlantic article referred to this new phenomenon as “sludge.” As the author Colin details, the term sludge came from a work published by legal scholar Cass Sunstein and economist Richard Thaler, entitled Nudge. A later edition of Nudge included a section called “sludge,” and Colin described this as “torturous administrative demands, endless wait times, and excessive procedural fuss.”

Sludge and jury

It also appears that I was not the first person to be frustrated by the more modern reality of customer service. Colin also notes that the W.P. Carey School of Business Administration at Arizona State University initiated the National Customer Rage Survey in 2003. It was last performed in 2023, and it noted “Record level of product and service problems incite surly customers to yell more and seek revenge for their hassles.”

The point of “sludge” is that solving customers’ problems costs money, and cost containment is a constant concern in businesses. It is easier, and seemingly more profitable, if the customer just gives up on whatever he or she was seeking. And this is accomplished by excessive wait times, transfers to nowhere, being redirected to websites, dropped calls, long on-hold times, and being required to file forms that are excessive in length … to mention a few of the processes known to be successful in eliminating the customer complaint.

And, as eliminating the customer complaint is the point, the incentive systems for the customer service department becomes based on rebates and refunds not given, and calls not escalated. Emphasizing this point, within Colin’s article, he cites a 2019 article in the Harvard Business Review entitled “Why Is Customer Service So Bad? Because It’s Profitable.”

Colin also notes a fascinating array of sludge stories, including “the Consumer Financial Protection Bureau ordered Toyota’s motor-financing arm to pay $60 million for alleged misdeeds that included thwarting refunds and deliberately setting up a dead-end hotline for canceling products and services.”

I bring this up because it has helped me understand why I am becoming hesitant to approach the guest service function of many companies when I have a complaint, a hassle, or a desire for clarification. I suspect that I am behaving in a manner that consumers are now being trained to adopt. Damn … the bad guys won … yet again.

I found it ironic that while drafting this article, I attempted to move an appointment with a doctor affiliated with the largest medical provider where I live. I called the instructed number and was informed that I was sixth in the queue. I finally made it to the front of the line in about 10 minutes. I was then told that she would forward me to a person who could handle my issue. When that line answered, I was informed that this person would be away for the next week, and not to leave a message. I was then referred back to the original number. 

I then called the original number and was now seventh in the queue. When that person answered, I explained what I had been through, and she offered to forward me to another person. I asked her to stay on the line to ensure I could make a connection. There was no answer. The woman informed me that she would send an email to the person requesting that she call me. That was two days ago.

I felt like a test subject for this article.

What this all has to do with gaming

I would guess that every gambling regulator reading this has had an “aha” moment with the frustration of getting played in the poor guest service game in their personal lives.

Well, you regulate an industry that, at least for those folks who talk to me, think the online betting operators also offer crappy service, and my guess is that it is intentional.

I am often approached and have written about players having a hard time with the customer service aspects of betting operators and regulators. It happens. I have also written about the importance of regulators testing the customer service functions they offer. Regulatory leadership needs to appreciate that simply having the service does not mean it is working.

Bettors should not hesitate to escalate the complaint with a regulator if they feel they are being played. To quit the fight is to surrender to the operator’s intention to break your spirit. If you think you are being played, take it to the commissioners or chair. If that fails, take it to the governor’s office. Social media also offers an opportunity to bring this type of injustice to the attention of the public, and, if nothing else, allows the player to emotionally vent (or dump). 

If the regulators desire to explore the guest service functions offered by the industry they oversee, I would suggest the chapter in the book Sludge entitled “Sludge Audits.” It suggests several routines and methodologies for measuring sludge. If nothing else, it is a good thought piece to begin to explore the dimensions of sludge in the online betting experience.

From my communications with bettors, it seems that a type of sludge that the operators commonly employ is the notion that whatever the bettors are working to understand or resolve, the response is that it violated or was covered by the operator’s terms and conditions. It does not specify which aspect of the terms and conditions is violated, only that it does violate it. One does need to understand that these are complex documents, often containing serious legalese, that are hard to navigate and comprehend. Moreover, they are typically lengthy. And yes, I am working on an article on this.

In the short run, I would suggest that the regulators introduce a policy that mandates that all guest service calls to an operator be logged by the operator, including the date and time of the call, the details of the issue, and how and when it was handled. It also needs to include a field indicating whether the customer was satisfied with the response. And this document needs to be provided to the regulator on a monthly basis.

While the operator will complain that this is excessively burdensome and expensive, send them here. This site chronicles the hundreds of millions of dollars of DraftKings’ CEO Jason Robins’ insider trading history.

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Richard Schuetz entered the gaming industry working nights as a blackjack and dice dealer while attending college and has since served in many capacities within the industry, including operations, finance, and marketing. He has held senior executive positions up to and including CEO in jurisdictions across the United States, including the gaming markets of Las Vegas, Atlantic City, Reno/Tahoe, Laughlin, Minnesota, Mississippi, and Louisiana. In addition, he has consulted and taught around the globe and served as a member of the California Gambling Control Commission and executive director of the Bermuda Casino Gaming Commission. He also publishes extensively on gaming, gaming regulation, diversity, and gaming history. Schuetz is the CEO of American Bettors’ Voice, a non-profit organization dedicated to giving sports bettors a seat at the table.