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Free play is a dangerous thing in the wrong hands

Max Rubin chronicles the problems Las Vegas created for itself in his “tell all” book entitled Comp City about how to get casino comps. In a nutshell, players were comped based on buy-in - not play - leading to tremendous losses in the industry because players figured out all they had to do was buy-in at exorbitant levels, not play at all if they so desired, then cash out – the comps would roll in.

Most of us in the gaming industry are aware of the bus tour disaster created several years ago in Atlantic City when the casinos found themselves in a war, fueled by one upping the competition for bus tour business. The result was more comp was being issued than play was netting for the casinos from that very important segment of business for that market.

Those are stories of misuse of incentive marketing which you would think today’s marketers would learn from, but all one has to do is look around to see it hasn’t stopped – It has just taken a new form in Free Play abuse.

It seems to happen most in highly competitive markets and starts with just one rogue casino marketing executive who doesn’t understand that Free Play is NOT FREE. We are seeing it in parts of Oklahoma as this is being written, have seen it gone wild in parts of California in the recent past and witnessed the same kind of abuse in Minnesota, to name a few markets.

So, that one casino marketer begins sending excessive incentive coupons in the direct mail program for free play, rooms, etc. in a tight market. This casino marketer doesn’t understand he or she is driving the hold down and thus deteriorating the win at his own casino, and fueling an insane war. As a competing marketer the temptation naturally is to answer with even richer and more frequent offers as you see part of your business exiting to the property buying business. Pretty soon, every property in the market place is on board, every property is experiencing deteriorated win and the worst part is, (unless you are a player in the area,) we are subsidizing totally free play to many players. Yes…..totally free play.

Think about it: A guest who plays at moderate value who has 4 or 5 casinos within an hour’s drive of their home can get into the direct mail incentive program at all the casinos and due to over incentivizing can literally play free for however long it takes the casinos to figure out the mess they have made.

Is there an easy answer? Yes – Hold your ground. Sooner or later the stake holders at the casino that started the whole mess will see diminishing profits, call in a consultant to figure it out and the casino management team will be looking for a job. The easy answer though isn’t always the practical answer, especially if you are interested in keeping your job. It’s hard to convince the stake holders of your casino to stay the course when everyone sees play moving.

At the end of the day though, you do have other avenues, besides direct mail, within your club to combat defection by building real loyalty through other channels.

Our company, SMP Communication is a gaming agency that has been involved in Casino Loyalty Program planning and strategy for over a decade. We have a successful track record with over 35 casinos and we are available to help you in your efforts to combat the insanity, and provide analytics to strengthen your position in the market place and with your stakeholders.

For more on the subject read FREE PLAY – IS IT FREE?. Recommended reading: Max Rubin Comp City

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