Inside Asian Gaming

INSIDE ASIAN GAMING | August 2011 16 other hand, casual gamers, first time visitors and those avid players who do not use their reward cards begin to sense that the casino is tightening up their games. They see less value from their gaming budget and in turn reduce their levels of visitation or simply go elsewhere. This problem is exacerbated by the fact that only a small percentage of a casino’s customers actually receive free play offers. Typically, a casino will have a carded win rate of 40%-60%. However, that carded revenue is not being generated by 50% of the casino’s customers. In all likelihood it is being generated by less than 20% of all the customers that play in the casino. Thus the higher slot hold negatively impacts most of the casino’s customers since they do not receive free play offers. Furthermore, casinos promotions often ebb and flow. Marketing may increase the volume of free play promotions during slow periods and decrease them during peak demand periods. In such situations, the slot director may not recognize nor care to react to the reduction in free play volume and lower his slot hold. The net result is that even past recipients of free play offers sense that the slot machines got tighter and their gaming experiences are soured. How and when to use free play are decisions that that should not be left to Marketing alone. The use of free play must involve senior leadership, Accounting, Slots as well as Marketing. Free play must first be grounded in a sound player reinvestment strategyandbepartofthecasino’sslotpricing strategy. Once strategies are formulated, free play tactics can be created along with accounting rules and measurement tools. Free play is an invaluable tool for a casino. However, as its use proliferates, issues will continue to arise that were never anticipated when programmers first began writing their software. eliminated. Neither the controller nor cage manager need be involved; nor does the slot director or even the general manager. Marketing can now simply create a promotion, issue amemo to the players’club and conduct the promotion. Revenue audit would simply record the issuance of the free play in the contra revenue account along with all other free play promotions. The problem is that under the electronic free play scenario, Marketing is free to create as many free play offers as it sees fit. Multiple free play offers can be easily layered on top of one another, blurring any analyst’s ability to measure the effects of a particular promotion. Marketing could create one promotion where every hotel guest gets $20 in free play and another one where every new member gets $10 in free play and a third where buying a meal in a restaurant earns another $10 in free play. These new members can then redeem $40 in free play without ever having demonstrated any gaming worth. Worse, measuring the effects of any one promotion is virtually impossible. Furthermore, without a traditional promotions development process where a promotion is proposed, approved, implemented and measured, anyone with permission to create a free play promotion can do so. When free play is not accounted for as an expense on the income statement then Marketing is free to create an endless stream of offers with no consequence to their budget. After all, it’s free play, which means it must be free. Free play and slot hold Free play in all its permutations can have a profound effect on the casino’s slot hold. When marketing floods its database with free play offers, it artificially increases slot handle and decreases slot hold (because free play does not increase slot drop). When this happens, the inclination of the slot director, who is accountable for monitoring slot floor hold, is to gradually increase the hold percentage of the casino’s machines until the floor returns to its configured par. What happens is that frequent gamers who are members of the rewards program and are the recipients of most of the free play offers are incentivized to come into the casino and continue to receive sufficient gaming value, even if the slot hold has increased. On the The problem is that under the electronic free play scenario, Marketing is free to create as many free play offers as it sees fit. Multiple free play offers can be easily layered on top of one another, blurring any analyst’s ability to measure the effects of a particular promotion. Feature