Impacts of Increased Free-play on Casino Revenue and Visitation

Abstract

This research seeks to measure the impact of increased promotional incentives on casino revenue and visitation frequency. Free-play has become the primary casino marketing expense in many of the world’s casinos, yet little is known about the efficacy of offers, or how customers respond to changes in existing offer levels. This randomized controlled trial featured a within-subjects design, with patronage data collected in year-over-over sample periods of 180 days each. Paired-samples t tests were employed to measure customer responses to increases in the par level of their free-play offers. A preponderance of results indicated that considerable increases in free-play awards failed to produce significant changes in both the player’s own-money losses and visitation frequency. The outcomes failed to support the notion of operant conditioning, but were generally in line with reactance theory. This was the first longitudinal study to experimentally examine the effects of increases in free-play offers on revenue and visitation data, in a within-subjects design. Analysis of actual performance data added to the value and utility of this research. Casino marketers are provided with critical insight on the ability of increased free-play awards to affect targeted behaviors. Few studies have experimentally manipulated these offers, leaving casino marketers with a paucity of rigorous research on their primary play incentive. Additionally, the changes in behavior were measured from an established/baseline offer level, rather than no offer. This design provides management with results applicable to potential revisions of existing free-play campaigns.