As our entire world, and the consumer space specifically, marches toward cashless, casino gaming is at a fundamental crossroads. The foundation of the industry’s success, up to this point, has been built on issuing credit lines for the most active and high-income players. Innovative, sector-defining companies like Marker Trax are fortifying this foundation, leading to a more convenient, secure and responsibly managed environment for everybody.
Traditionally, gaming credit lines have worked roughly like this: Operators court high-income players, who hold rock-solid credit ratings, and offer them the opportunity to apply for a credit line at the resort, to make spending their time—and money—a more convenient process. This allows the operators to generate goodwill and customer loyalty, while limiting the player’s need to leave the property to go to a bank or decide to stop play altogether to avoid high ATM or cash advance fees. It’s been a win-win for both sides over the years; but it’s also, frankly, a process that severely limits opportunity on both sides of the equation.
Because here’s what happens: First, the process of offering, and signing up for, a gaming credit line is as complicated and time-consuming as applying for a mortgage loan, involving multiple credit checks and invasive paperwork, followed by a review and approval period that can stretch out over a period of several days, sometimes weeks, before an approval decision is reached.
Also, the whole process consumes so many resources on the operator’s part that they typically only offer these lines to the highest-income players who hold nearly flawless credit ratings, while ignoring other players who may be just as able to pay back a line, and just as loyal to the property—and, in some cases undoubtedly, even more so.
I joined the team at Marker Trax last year to help optimize their underwriting process—a key business element to any successful leader in gaming’s digital age—but before that, I grew my professional roots for almost 10 years in sub-prime, government and traditional mortgage lending.
From there, I spent the next decade-plus with a company I founded that specialized in issuing and managing micro loans. Our customers weren’t unworthy of traditional loans, or at higher risk of not paying us back, simply by virtue of not having six-figure annual incomes or flawless credit ratings. Rather, they were normal, everyday people who worked hard at their jobs, were responsible with their finances, and had extra money saved and had shown they were responsible borrowers—they were simply overshadowed by higher-income customers.
At my company, we perfected a meticulous process that stressed a high level of customer service and spent the time necessary to find a lending point that worked for these supposed lower-value borrowers, and in so doing, we were able to open the world of home ownership to thousands of responsible borrowers who never would have dreamed of it otherwise. And these same lessons can—and should—transfer over to the world of gaming if we truly want to fully move into the digital and cashless age.
The underwriting process, the backbone of any credit issuance activities, has always begun with analyzing credit scores, payback history, and income. And while that should remain the case, it should be just that: the beginning.
At Marker Trax, we also work with operators to analyze what people reasonably can, and can reasonably be expected to, pay back. Beyond that is another concept that needs to be given more credence: brand loyalty. Show me a millionaire who’s never been to my property, vs. someone who earns $65,000 a year, has never defaulted on a loan and stays at my property every time they come to visit the city, and I feel just as comfortable working with the latter to determine, and issue, a credit line that benefits both the operator and the player.
Because while I value that high-income player’s potential to spend more money at my resort, I also value the player who’s demonstrated they prefer my resort over others. That’s the key part of the equation: a customer service experience that values, and rewards, brand loyalty.
The next step is updating the underwriting process itself for the digital age, creating an exponentially more convenient experience from start to finish. At Marker Trax, we’ve developed a process that is itself fully digital, and brings with it all the benefits of digital operations. Rather than the aforementioned lengthy forms and several-day waiting period, players can apply for a credit line through the Marker Trax mobile application and get their approval decisions within moments. This gets players to their favorite games more quickly—further increasing that brand loyalty—and gets operators back to the business of managing their resorts.
Most importantly, digitizing the underwriting process is a financially sound innovation. Marker Trax lines are digitally tied to the issuing property and the player’s loyalty card. You can get a cash marker at a casino, then walk across the street and spend that money somewhere else. But a Marker Trax line has no value outside the resort. It also saves players money on expensive ATM and cash advance fees. Finally, upon hitting the cash-out button on their favorite gaming machine, required payments to the line are made automatically, and prior to actual cash-out.
Opening up credit to larger pools of players of course increases the potential risk of players who shouldn’t have loans applying for and receiving them, if for no other reason than the presence of more opportunities for misuse. The balance in gaming has always been providing an enjoyable, positive experience for the players that encourages them to build a sense of brand loyalty, while ensuring safeguards are in place to protect from problem behavior and practices.
It’s a lesson I learned in my work with micro loans, and one that has informed every professional decision I’ve made since: As a lender, in any industry, the absolute last thing you want to do is issue a loan that won’t be paid back, in full and on time. Period.
That’s why responsible gaming safeguards as instituted by Marker Trax are so important. We make sure all operators have access to a real-time reporting dashboard, that tracks credit lines issued and their payback status. Players have access to that same data, in a straight-forward fashion that simply isn’t available with a cash marker. Keeping the funds on property mitigates risk, too, as fewer spending touchpoints mean fewer opportunities to misuse funds. And with our system of automating minimum payments upon cash-out, we’re taking some of the burden off the player, helping them make responsible decisions.
Those of us in the digital, cashless space are moving the gaming industry as a whole into the future. We’re improving customer service, making the whole lending process easier on operators and players, helping to improve brand loyalty, and focusing on robust responsible gaming and payback safeguards.
Haphazard lending can lead to terrible financial outcomes; there’s no other way to say it. But underwriting innovations for the digital space, like what we’re doing at Marker Trax, increases the lending pool in a way that emphasizes customer service and scrutinizes a player’s true ability and inclination to pay back a line. It’s helping to create a fundamentally improved process, building upon the foundation that helped build gaming to begin with.
