Do casinos want lucky players stay away?

Sep 8, 2009 5:06 PM
Winning Strategies by Elliot Frome |

There really is no nice way to say this, but just because you own a business, even one that perhaps appears successful, doesn’t mean you’re making smart business decisions.

Many years ago, an international furniture store opened up an outlet near me. A few months later, I read an article in the local paper talking about how well the store was doing. It did so well they were out of stock on many items because the demand far outweighed the supply.

While they were all patting themselves on the back, all I could do was think how if I were the CEO of this company, I’d be looking for guys to fire. Clearly they underestimated the demand, and didn’t prepare for it. How many customers were lost because they came to the store to buy something and found out that they had an empty warehouse?

This past week I received an e-mail from a reader (an LV local) who told me how he had his cash-back eliminated by a casino. When he asked why, he was told that he had hit too many jackpots recently.

From the e-mail exchange we had, I think we came to the conclusion that the casino’s decision was based on the results of his play and not on his play itself. In last week’s column, I told my readers that while casinos may have the ability to track the skill of players, I did not believe any were doing so. That does not mean I feel the casinos are not tracking how players are doing from a win/loss standpoint.

I WAS a little surprised to find that casinos have been cutting back on cash/comps, however, based on relatively short term results.

I’d really like to know what the casinos are thinking when they do this type of stuff? From a business standpoint, this makes absolutely no sense, and all the more so, in the current economic environment.

As was relayed to me in his e-mail, when he used to receive his cash-back, he used to go with at least one other person and sometimes three or four other people to the casino to claim it. So, even if the one person is this ‘lucky’ and they don’t want to give him cash-back, they are giving up the potential play of several other people!

Frequently, they would go to a restaurant in this casino as well. All that revenue is now gone! Do the casinos honestly believe if they eliminate this type of comp, the players will just keep showing up? I can’t even say this is short-sighted.

As "no-sighted" as this appears, it is not even the really disturbing part. More disturbing is the casino made this decision (or so it appears) based on the RESULTS the player attained and not the quality of play. So, if a really bad player gets lucky and hits a few royals, he may be cut off. But, an expert player who plays perfectly, but has a slow period will keep getting his checks? What logic is there in this? Why don’t you just randomly pick people to give comps/cash back to?

While I don’t necessarily agree with the idea of subjectively giving back these types of rewards, if they’re going to do it, have it make business sense. Rather than tracking only results, track the actual play of each player. If I were a casino, the first player I want to give money to is a bad player who gets lucky. I want to make SURE they are coming back to return all they won. Why would you want to give this type of person ANY reason to stay away? They are more likely to stay a poor player than they are a lucky one.

This is not to say I would want to keep an expert player away. If the games being played are still below 100%, the more even the expert player plays, the more likely he will lose money (even if it is below the level of the poor player).

Also, at this time, I don’t know any casino really able to track how often a player shops in the casino stores, too, and use ALL of the information they have at their disposal to retain their best customers. This would seem to make far more sense than telling a player who got lucky last month to stay away.

Question? Comment? E-mail me at: Elliot Frome