Flying? Consider the Odds
As gambling fever hits the friendly skies, U.S. carriers could lose out
Old definition of good luck for an airline passenger: an on-time departure, a chicken dinner with less bounce than a racquetball and a smooth landing. New definition of good luck on a flight: 7 ... 7 ... 7.
Ready or not, gambling fever has reached the friendly skies. Foreign carriers like Swissair, British Airways, Singapore Airlines and Alitalia are currently pouring tens of millions of dollars into state-of-the-art, personalized video screens, which will offer keno, slots, blackjack, poker and other games. Later this month, Swissair plans to unveil in-flight gambling on its long-haul flights from Zurich.
For the airlines, the payoff is obvious. According to a report by the Department of Transportation earlier this year, about 1 in 5 passengers said they would gamble if given the option. Foreign carriers, the study noted, could earn an estimated $480 million a year in additional revenues, which could help them bankroll operations and perhaps even reduce fares. "Putting aside the moral issues, it's a no-brainer," says James Higgins, airline analyst for Donaldson, Lufkin & Jenrette. "It makes money and gives people something more to do."
But U.S. carriers worry that they may turn out to be the big losers. A 1994 federal law prohibits gambling on all flights originating from or going to the United States. If gaming in the skies takes off overseas, domestic carriers like United Airlines and Delta Air Lines will probably be at a disadvantage on routes where they compete directly with airlines like British Airways or Singapore Airlines. If that happens, industry executives will almost certainly push Congress to change the law. "U.S. carriers are now able to go toe to toe with anyone internationally," says David Swierenga, chief economist for the Air Transport Association, the Washington, D.C., group that represents U.S. carriers. "Anything that takes away from our ability to compete is something we would resist mightily."
Very high rollers. But any plan to introduce in-flight gambling on U.S. airlines is likely to stir the passions of the growing number of antigaming activists, who see a country already deluged by a $550 billion-a-year bad habit. "I would not fly on an airline that had it," says GOP Rep. Frank Wolf of Virginia, who recently introduced and helped pass legislation that authorized a committee to study the impact of gambling in the United States. "And if you ever had it, I would urge every family member that had kids to boycott the airline." Wolf adds that he will lead a major effort against the first airline that even tries to have the 1994 law changed.
Gambling on foreign airlines is not entirely new. In the early 1980s, Singapore Airlines installed real slot machines in the rear cabin of one of its long-haul 747s. That experiment, while a huge hit, lasted just a few months because it turned out to be a logistical and operational nightmare. Passengers were clogging the aisles at the back of the plane, and the machines broke down on several occasions from heavy use.
Asian and European airlines insist that their new form of video gambling--using screens activated by credit cards--is just another form of amusement for fliers. "Nobody's going to buy an airline ticket [just] to gamble," argues Steve Fieldman, cofounder of Interactive Flight Technologies, the Phoenix-based company that designed the system for Swissair and Alitalia. Fieldman and others add that not only will airlines institute a loss limit--typically around $100 to $350--but flight attendants will be able to lock out the gambling option on the screens where children under the age of 18 are sitting.
Still, a host of questions remain, not the least of which involve safety. For one, gambling will almost certainly increase the workload of the flight attendants, who might have to calm disgruntled passengers (read: sore losers) or perhaps handle problem gamblers; that extra work could take away from other safety-related duties. Nor does anyone know how well the video screens will respond to punishing midflight conditions such as air turbulence or even a passenger who spills a drink on the machine. Finally, there's the regulation issue: Who will be in charge of overseeing the gambling when a plane is in midair? Not surprisingly, the answer is that many of these issues are still in flux. "What you start out with is never what you end up with," says one DOT official close to the 1996 study. But that's kind of what gambling is all about, isn't it?
This story appears in the December 23, 1996 print edition of U.S. News & World Report.
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