According to a new scientific research study, reducing free play offers to players has minimal impact on customers returning to a casino.
However, the abolition of free play incentives could prove problematic for casino operators, according to the study.
The study, published in the UNLV Gaming Research and Review Journal, suggests that reducing the number of free casino games given to guests resulted in little to no change in visit numbers or spending per visit. It didn’t matter if the free play rewards were reduced by $5 or $10, customers continued to come back to the casino.
Only when free play was completely abolished did loyal customers begin to change their behavior, but even then only minimally.
“Our results suggest that, short of completely eliminating (free spins) bonuses, there may be scope for significant reductions without causing significant business losses,” the study concludes.
“This work does not show that free play is bad”
Casinos rely on repeat customers to drive their business, and there is a general consensus in the industry that one of the most important ways to attract these players is to give them free spins.
In many gambling jurisdictions, casino operators spend millions of dollars annually on advertising spend, which is an industry term for giving away free games. If this model no longer produces results, or comparable results can be achieved without the cost, it is possible that casino operators will start to reduce their spending.
Co-authors of the study are Anthony Lucas, a professor of casino management at UNLV and a former casino manager in Las Vegas, and Katherine Spilde, a professor at San Diego State University and director of the Sycuan Institute of Tribal Gaming College.
“This work does not show that free play is bad,” Lucas said in a statement. “Rather, that it has evolved to the point where it no longer achieves its stated goals, and I am no longer so sure about the returns.”
Lucas theorized that casinos need to ask themselves, “How can we do it differently? How can we do it better?”
The investigation was conducted over several years at an unidentified tribal casino in the “Western United States.”
The study involved 400 casino visitors. In the first year, participants were given $15 a week to play with. In the second year, players were divided into four equal-sized groups, with each group given a different amount to play with, ranging from $0 to $15.
Key findings from the study included a 20 percent drop in visits in the group that had free play eliminated. Visitation patterns did not change in the groups that received any amount of free play – $5, $10, or $15.
“I don’t think there’s anyone in the (casino) industry who would have predicted this,” Lucas said.
Improving the overall guest experience
Lucas said casino operators could use the study’s findings to improve the overall experience of their guests.
“It’s difficult for casino owners to make changes because corporations are inherently risk-averse,” he said. “The data shows there are so many other things you could do with that money with minimal or no consequences. You could improve customer service and the physical environment — those are things that also impact footfall and spending.”
The study refutes the common belief in the casino industry that free play is the main reason for repeat customers, Lucas said. Other factors such as convenience, location, security and the ambience of a casino are just as important.
However, it is unlikely that free play will be displaced as the preferred method by casino operators any time soon.
“You don’t always go to the same place on vacation or eat at the same restaurant. Gambling is the same,” he said. “You probably don’t go to the same casino every time, but if they can get you to come more often, that’s great. And that’s what they do with loyalty programs where you can play for free.”
Contact David Danzis at [email protected]. Follow AC_Danzis on X.
