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Player Club Myths that Can Cost You Money
(Originally Published in Global Gaming Business)
By Jeffrey Compton
Publisher, CDC Gaming Reports
email

Gambling has been around since the dawn of time.  Legal casinos have been operating in America for over seventy years.  However, players clubs (or slot clubs) are a relatively new development that followed the tremendous growth in slots, beginning with the legalization of Atlantic City gaming in 1976.

Unlike Table Game Management, or Race and Sport Book Operation or Casino Floor Design, I have yet to see a complete college course devoted to Player Club Management.  Many of the decisions made when establishing or operating a club are based on anecdotal knowledge at best or a best guess at worst. It can be a very perplexing process.

Hopefully as more issues of Global Gaming Business (and this column) appear, I and others in the field will be able to transmit a few useful insights on the subject. This first column addresses the most common (and expensive) myths and misconceptions regarding players clubs.

Cashback is King!

Although the vast majority of players club in the United States offer cashback benefits (i.e. same-day cash rebates directly based on play), very few players choose one casino over another based on cashback percentages. To further the point, I recently listed the top ten cashback paying casinos in the country, and only two of them were the leading casinos in their market (based on number of players vs. number of machines) – and in those instances active players, familiar with the area, told me that those properties’ success were based on other factors: machine inventory, quantity and quality of comps, customer service levels, etc. 

Usually, the best cashback strategy is to be a couple of beats behind the market average.  If you want to shine in any area, then consider high-end reels.  Based on my market research, this group appears to be the most cashback conscience.

A Secret Comp System lets the Casino be in Control

I know plenty of casino executives who love to write comps but hate to tell the players any particulars about the comping system, such as how are free rooms or meals are earned or how many unredeemed comp dollars a player still has.  This reluctance is based on the theory that the less players know, the more the casino can control who gets what comps.  Looks great on paper, but it does not work that way.  By consistently questioning the hosts (who are hired to be friendly and open) many players know more about a closed comp system than the Marketing Director.  What’s worse, the customers who know the most (and thus get the most) are usually not sought-after reel players, but low-hold video poker sharpies, who consider the information hunt part of the game.   The unsophisticated slot player is next door at the casino where he knows he can get a comp without embarrassment.

The Players Club Booth Staff are Entry-level Positions

To casino management, the players club booth is a small part of a big casino, but to your players, especially your active players, the booth is where they interact with casino management.  They go to the booth to get comps, find out about promotions, ask questions about the casino, etc.  This is not the place to put the $6/hour help, many of whom have worked in the casino for less than 60 days.  The Mirage organization always puts their best look forward in their player clubs’ booth, staffing them with host-level employees. The players appreciate it and respond accordingly.

The More Modernization, the Better!

Kiosks, bonusing, cash-on-the-card, point-of-sale redemption, comping at the machine, ticket-in, ticket-out; every year, especially during gaming trade shows, we are bombarded with the latest and greatest labor saving innovations.  While a few innovations will probably be universally accepted, especially point-of-sale redemption and ticket-in ticket-out, others are very dependent on a casino’s specific market demographic.  For example, complicated bonusing systems do not work with tourists who visit only twice a year.  Comping at the machine schemes are usually wasted on an elderly audience, many of whom have a VCR at home blinking “12:00”.

More importantly, no casino should ever downplay the importance of face-to-face contact: especially in a local environment.  Casinos attract a higher number of single people than many other forms of entertainment, and I think the reason is these folks like to go somewhere that is both exciting and friendly.

That Players Club Setup Works for Them, so It Will Work for Us!

New casinos, or older ones setting up their first club, sometimes cut research corners by just mirroring someone else’s club.  It might be from a casino next door, or one from across the country (that is usually owned by the same company).

Of course, just because two casinos are owed by the same company or are in the same area does not mean that they cater to the same exact market – and even minor market differences can be crucial to your players club setup. The much more common mistake, however, is assuming that it is the players club features you “borrowed” are a positive factor in that casino’s market success.  There are several great casinos with crummy clubs, but other factors including machine inventory, customer service, well-trained hosts, generous direct mail etc. more than make up the difference.

The Players Club is for Slot Players Only

As an industry, we have done a fine job creating clubs that address every slot player type and market. But we still reward table games players based on a model (theoretical per trip) created years ago for Las Vegas tourists.  Too many casinos’ systems totally overlook the consistent small-stakes player who does not earn enough comps on any one trip even though his annual action adds up to very decent sum.  True, most casinos should avoid paying cashback to table players, but we still have not found the correct comping model for many properties’ table action.

And that is only six myths.  I look forward to address these and others in upcoming months.

Read more articles from the CDC Team

 

Ken AdamsJeffrey ComptonDave NewtonJohn StoneJohn Yeomanson
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