Out of Cash? Gamble!

There are plenty of ads out there that entice consumers to do stupid things. Here, for example, is one from Sovereign Bancorp (NYSE:SOV) that encourages people to take out a home equity line of credit so they can take "the vacation of a lifetime." Yes, there's nothing like turning equity into an expense that depreciates at 100%. I took Sovereign at random -- its name came up first when I did a search. Rest assured, it's not alone in trying to convince people that they should spend money they don't have on things they cannot afford.

But most companies don't really get much out of you saving money. They want you to spend it. With them. So when Jeff Hwang pointed out in his article that a New Mexico casino ran an ad to attract people who had credit card and other debt problems to come to the casino to solve their problems... Yep, you read that right. "Got debt? Need money badly? Our slot machines can help!" It didn't quite go like that, but here's how it did go:

"So the holidays have passed and those credit card bills just keep piling up, and there seems to be no relief in sight. How will you pay those huge bills? Well, Isleta Casino Resort comes to your rescue!"

Unreal. Now, as Jeff noted the other day, in most instances the gaming industry really is just that: a way for people to wager some money that they can afford to lose. But Jeff sort of glossed over this point: It's not like Mandalay Resort Group's (NYSE:MBG) Mandalay Bay and the other big casinos have patrons sign release forms before they sit down at the table. It's the casinos' jobs to siphon off as much of their guests' money as possible. It's the guests' job to know when they are crossing the line from "gaming" with a few bucks to "gambling" with the rent money. The casinos can't know where this limit is.

But for the Isleta Casino to come out and specifically entice people to put their bread money, their lifelines, on the table is completely despicable. "Come gamble with us." This isn't gaming. Isleta Casino is specifically targeting people for whom the outcome would be "dealer gets 20, player gets 11." As in Chapter 11. What's worse is that, should these folks come in and lose (and they inevitably will lose), money that could have gone to pay creditors for services rendered would end up at the casino instead. Who is the renderer in these cases? Merchants around the country. And to whom do those costs eventually get passed? Yup, right back atcha.

We can't fault Isleta Casino for the lack of financial education and discipline that pushes folks to the edge of financial ruin. But these ads are the equivalent of telling folks in such a position that they should jump because the casino will catch 'em.

Sure, and take all their money and send 'em out the door. What then?

If you're struggling with your savings, don't let the fact that you can do little be the reason you do nothing at all. Consistently saving just a little bit of money adds up over time. We can help. Check out our Savings Center for some great advice.

Bill Mann owns neither company mentioned.