Do players get the point(s)?

May 8, 2006 1:37 AM

Growing up in the idyllic suburbs of St. Louis, our family shared a driveway with a gruff but lovable widow named Betty Burrochio. Her husband had been in the cigarette, candy, and pinball machine leasing business. Mr. Burrochio mostly serviced seedy bars, disreputable auto-shops, tattoo parlors, emphysema clinics and elementary schools.

From a kid’s perspective, Betty’s basement was a Tim Burton-esque mechanical fantasy land full of springs, levers, and sharply edged metal coin boxes. When our family moved away, Betty gave us a then not-so-vintage 1969 D. Gottlieb & Co. Spin-A-Card pinball machine as a housewarming gift. A gambling themed slot machine, a fascination with mechanics, was there some career premonition occurring?

In 1975, an advent in pinball technology by D. Gottlieb & Co. with their Spirit of ’76 machine was made by utilizing a microprocessor for the first time. No longer would high scores of 2,000 or 3,000 points inspire pinball wizardry awe amongst friends and enemies alike.

Sure 1976 brought some great things to the good ol’ U.S. of A, a bi-centennial for a nation still in its socio-political adolescence, Liberace poured into a Nudie designed red, white, and blue rhinestone encrusted hot-pants ensemble (actually, not so great), and the introduction of Billy Beer would be just a year away; yet, the golden age of pinball machine high scoring was over.

In the contemporary period, just as with sensible numbers for pinball high scores and reasonable slot credits not found on multi-line penny machines, slot club card point distributions have gotten out of control.

Colorado casinos’ point allotment scenarios have become inflated and point worth allocation has deflated. Some casinos in the Colorado market boast of "2X POINTS EVERYDAY" for an entire month. If one had dessert after every meal, it would no longer be a treat, but an expected course (i.e., an entitlement). Rarely is any long-term good derived from excess.

Some other casino marketing sins have included not providing differentiating point rewards for dissimilar machine types and denominations. If a $1 video poker machine has a 2% hold and a $1 stepper reel has a 4.7% hold, $1 coin-in units should not be rewarded equally with the same number of award points. The casino is holding less from the video poker player, and thus the casino should not logically reward the player as much. More economically minded operators offer a ratio of ½ point re-investment for video poker (to a whole slot point).

It might be beneficial to briefly visit some of the primary issues that serve as stumbling blocks in determining true worth with point multiplier promotions:

When is the promotional offer valid?

Not all casinos measure a slot "play" day with the same parameters; therefore, an offer good only on weekdays might end at 3 p.m. on Thursday if the accounting purposed game day determines weekends to begin at the end of the gaming day (i.e., end of day shift Thursday at 15:00 hours).

Are the points truly multiplied?

Some casinos evaluate play with adjusted and non-adjusted points.

If a casino offers 5X points, one must be sure that this means that both hard comps, soft comps, cash back, and other re-investments are being covered. If an actual earned (non-adjusted) point is only 1X multiplied for cash back and 3X cash back for hard comp (e.g., gift shop, spa), but 5X for soft comp (e.g., f&b hotel), the point multiplier is not universally 5X.

Keeping up with the Fitzgeralds or Bullwhackers.

A dollar (in relation to exchange rate, inflation, and other factors) will buy you X amount of goods and services in an open market. A point at one casino does not necessarily equal the point value at another. In terms of individual casino reinvestment, one point at Casino A may get you a nickel back and a cherry soda while one point at Casino B may score you a c-note in cash back and use of a private jet for the day (no, not really, that would be one big point and the value is exaggerated for exemplary purposes).

When and how did the gamer earn the points?

Does the player only come in when there is a multiplier greater than 2X? Is this customer who only plays when at a point advantage playing enough decisions to compensate?

Is the player in a special age bracket or in a special club or grouping that provides him with automatically bonused points?

If two brothers, ages 49 and 50, play the exact same amount of coin in (all things being equal), why is the brother who is older by one year (i.e., in the 50 < age bracket) worth extra points (i.e., extra re-investment by the casino)?

What is the point liability for a casino and for a player?

Since most casinos require a minimum number of points for the lowest redemption level (e.g., 1,000 points for $5 cash back), what are all of the players "owed" by the casino who have less than 1,000 points?

Should casino marketing allow for the acceptance of other properties coupons and/or offers and/or provide for other forms of reciprocity?

Since it is realized that all points are not created equally and that cash back of $20 on an X theoretical player may be 90% of one casino’s re-investment plan, while it may be 10% of another casino’s re-investment plan, truly understanding the competitive market and the respective re-investment schedules is paramount.

Skimming through a local Colorado gaming oriented weekly newspaper, two diametrically opposed offers pop out. One property is offering 5X points on all penny games while another casino is presenting 3X points on $5 slots. Let’s be logical. While there is no disclaimer that video poker and traditional slot games are going to be rewarded differently, one of these promotions is asking for fiscal trouble for the operator. Which one?

Without boring you with the math involved, the answer is the casino with the $5 slots. In fact, that casino with the penny slot multiplier could increase its bonus to 12X and still outperform the casino with the $5 slots.

As one may deduce, casino slot club points and their true value is a surprisingly complex topic that is sometimes misunderstood and/or misinterpreted by operators and players alike. Before a casino or a player engages in or takes advantage of a loyalty point multiplying battle, it is a worthwhile exercise to sit down and perform some simple math to figure out expected and true value (besides, your high school algebra teacher with the gigantic bun in her hair would be proud).