The Stasi, casinos and the Big Data rush

Book Review by Hannah Kuchler of “What Stays in Vegas” (by Adam Tanner) in the Financial Times: “Books with sexy titles and decidedly unsexy topics – like, say, data – have a tendency to disappoint. But What Stays in Vegas is an engrossing, story-packed takedown of the data industry.

It begins, far from America’s gambling capital, in communist East Germany. The author, Adam Tanner, now a fellow at Harvard’s Institute for Quantitative Social Science, was in the late 1980s a travel writer taking notes on Dresden. What he did not realise was that the Stasi was busy taking notes on him – 50 pages in all – which he found when the files were opened after reunification. The secret police knew where he had stopped to consult a map, to whom he asked questions and when he looked in on a hotel.
Today, Tanner explains: “Thanks to meticulous data gathering from both public documents and commercial records, companies . . . know far more about typical consumers than the feared East German secret police recorded about me.”
Shining a light on how businesses outside the tech sector have become data addicts, Tanner focuses on Las Vegas casinos, which spotted the value in data decades ago. He was given access to Caesar’s Entertainment, one of the world’s largest casino operators. When chief executive Gary Loveman joined in the late 1990s, the former Harvard Business School professor bet the company’s future on harvesting personal data from its loyalty scheme. Rather than wooing the “whales” who spent the most, the company would use the data to decide which freebies were worth giving away to lure in mid-spenders who came back often – a strategy credited with helping the business grow.
The real revelations come when Tanner examines the data brokers’ “Cheez Whiz”. Like the maker of a popular processed dairy spread, he argues, data brokers blend ingredients from a range of sources, such as public records, marketing lists and commercial records, to create a detailed picture of your identity – and you will never quite be able to pin down the origin of any component…
The Big Data rush has gone into overdrive since the global economic crisis as marketers from different industries have sought new methods to grab the limited consumer spending available. Tanner argues that while users have in theory given permission for much of this information to be made public in bits and pieces, increasingly industrial-scale aggregation often feels like an invasion of privacy.
Privacy policies are so long and obtuse (one study Tanner quotes found that it would take a person more than a month, working full-time, to read all the privacy statements they come across in a year), people are unwittingly littering their data all over the internet. Anyway, marketers can intuit what we are like from the people we are connected to online. And as the data brokers’ lists are usually private, there is no way to check the compilers have got their facts right…”