Comps for non-gamblers?

Sep 2, 2003 9:17 AM

Mandalay Resort Group announced last week that it is tracking guest spending beyond the casino in order to determine whether it should reward big spenders who don’t gamble much.

Mandalay owns and operates Circus Circus, Excalibur, Luxor, and its flagship resort, Mandalay Bay, as well as other properties.

Most "player reward programs" or slot clubs, as they used to be called, track members’ gambling habits to determine whether they qualify for freebies such as free rooms, shows, meals, and the like.

Mandalay said it has a new software program that will track guests spending habits to get an idea of who their best customers are.

Details of the program are to be revealed in a conference call scheduled for Tuesday, Sept. 2.

Analysts say that rewarding customers who spend a bundle makes sense since gambling revenue is no longer the sole source of income for casinos.

During the past decade, revenues for major casino companies have been moving steadily from gambling to non-gambling sources.

This trend has been fueled by the competition among casino operators for the best chefs, the hottest nightclubs, the fanciest spas and the trendiest shopping boutiques.

"We have diversified within the travel and tourism business," said Keith Schwer, a professor of economics at UNLV. "We have a portfolio of things to offer people coming here other than gambling."

Ten years ago, 61 percent of revenues generated in Nevada casinos came from gambling. Last year, that figure was 56.7 percent.

The trend is even more pronounced on the Strip, where this year casinos are expected to generate only 42 percent of their income from gamblers.

Not all casino operators have embraced the move toward non-gambling revenue. Harrah’s Entertainment, for instance, reports that 89 percent of its revenues last year came from gambling.

"We have opted to build strong relationships with players instead of building billion-dollar edifices," said company spokesman Gary Thompson.

That "strong relationship" includes free rooms to players, among other things. Thompson said that on any given day during the week, more than half of Harrah’s guest rooms are "comped," that is, free to the guest, in the expectation that they came to town to gamble in the casino.