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October 01, 2007
Gaming | Technology
Bill Geoghegan - Bill@LGTConsulting.com

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© 2008 Hospitality Upgrade. No reproduction without written permission.

Imagine getting $5 just to give a casino your name and contact information.  Getting the name and contact information about a casino player is so important to the casino that they are willing to pay for that data.

A primary marketing tool for casinos is free money.  This is not about big contests or drawings, but rather about small amounts of credits that may be used to place or supplement a bet.  In some cases, this is in the form of a coupon that matches a bet made by the player.  For example, such a coupon may be used to double the value of what the casino considers an even-money bet, such as a black jack play, red/black in roulette or the pass line in craps.  All even-money bets include some small percentage for the casino. The even money is a payoff equal to the amount bet. The coupon has a maximum value, such as $5, and can only be used in conjunction with a real money bet of the same value.  A black jack bet of $5 with a $5 coupon can result in a win of $10. 

It is not uncommon for these types of coupons to be included as part of a package given to a new member of the casino’s loyalty club.  When a player signs up and gets a player identification card, they are often given a book of coupons which includes some free play and other incentives, such as a two-for-one buffet or discounted t-shirts.  The objective of the casino is to capture contact information about the player and use that information to market to that person in the future.

Then imagine getting $10 just to let the casino know that you are there playing again.  Often, the same kind of incentive is given to registered players through a direct mail campaign to entice the player to return to the casino.  Free money is part of that offer.  For example, locals-oriented casinos in Las Vegas often send out weekly mailers to their registered players, including coupons for matching play at table games, or giving players some amount of free money on the slot machines.  The players that have to travel to the destination are marketed with special offers at times when the hotel occupancy might otherwise be soft, and one of the more common enticements is some free money on each day of their stay.

For many years, tour operators and casinos have arranged bus trips and airplane charters to draw players to the casinos.  Part of the incentive for a player to join these junkets was the lure of receiving free money to play at that casino. The cost of the bus trip would be typically given to the player, making the trip free, and allowing the player to use that fare to play at the casino.  Again, coupons were offered for table play, but in many cases, the player was greeted at the casino with a roll of quarters to play at the slot machines.  The only caveat was that the player must remain in that casino until the bus departed.  Spot checks of the players made sure that they didn’t wander away with the stake they had been given, but some people would spend the money on lunch or other things rather than play in the casino. 

For table play, it is relatively easy to process the coupons. They are simply placed in the drop box with all of the cash, and a the daily soft count process (the count of all money that is not coins or tokens) would establish the accounting necessary to trace the value of that particular program.  The coins given to a slot player were virtually impossible to track. 
Over the years, technology available on the slot machines has made it easier to offer the “free money” to a player and to ensure that it is used for casino play.  Originally, the only way to get a credit on a slot machine was to put coins into the coin hopper.  In fact, each pull or spin was paid off immediately. If you put in a coin and lost, you had to put in another coin for the next play.  If you won, the coins would drop into the coin tray immediately.  Eventually, a device that could read and validate a bill was added to the slot machine.  Since the amount of the bill represented far more than a single play, it was necessary to keep credits on the slot machine.  The combination of bill validation and the ability to hold credits on the slot machine meant that it was no longer necessary to pay off each play, and winnings could be added to the amount held on behalf of the player. This had many benefits. The play was much faster, people got less tired of playing, and there were far fewer coin jams.  Jackpots could be paid immediately rather than waiting for a slot attendant. 

The next great technology advancement was the ability to pay the credits in the form of a ticket which could be cashed in or used to get credits in another slot machine.  A preprinted coupon could also be used like a ticket, allowing marketing departments to track the success of a specific campaign and identify the individuals that used that coupon.

The ability to keep credits on the machine was supplemented by the ability to download credits to the machine from a central server.  After all, the central server held the true value of the printed ticket, so the free money could be credited to the slot machine once a player inserted his or her player card the same way.   The use of a PIN would ensure that only the owner of the card could get the free money.  This concept is often referred to as “bonusing” by the casinos.

In addition to the various bonusing offers that go along with player marketing, there are many casinos that enhance the player’s incentive to play and their gaming experience with random jackpots that are paid at various times when a player inserts his card in a slot machine.  Perhaps one of the most successful of these promotions has been used by Station Casinos properties for the past few years.  A random jackpot is guaranteed to pay out before it hits $150,000 to a player with a valid card inserted into the slot machine.  In addition, every player in every affiliated casino who is playing (with the card inserted) will receive a $50 credit to their machine at the same time that the $150,000 jackpot hits.  All the Station Casinos locations have big signs in front of the casino displaying the current jackpot amount.  The psychology of this is obvious, as is the result.  People will be more likely to insert their card while playing to make sure that they are eligible for the jackpot or bonus.  Even the person playing a few pennies in a machine can win, as long as their card is inserted.  The casino gets more and more crowded as the jackpot approaches its maximum value. One lucky player will win, but the big winner is the casino.  The bonus or jackpot increases the volume of play significantly, and the casino has incentivized the player to use his player card for the duration of all of the play. 

This ability to identify and track the value of a player is so great that virtually all casinos are willing to give away free money in some form to get you to register and use your card while you play.

Bill Geoghegan is a consultant in Las Vegas. He can be reached for comment at Bill@LGTConsulting.com.

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