“ Free play is vital ... That being said , the devil ’ s in the details , and how you use it and optimize it into your programming is just as vital in terms of generating success or not .”
— Jake Joyce , Senior Vice President of Marketing , Live ! Casino Hotel Philadelphia
“ Free play is vital ,” says Jake Joyce , senior vice president of marketing for Live ! Casino Hotel Philadelphia . “ I got into the industry in the early 2000s , when it was first taking off , and it ’ s been one of the greatest tools to develop loyalty in our industry , in our sector .
“ That being said , the devil ’ s in the details , and how you use it and optimize it into your programming is just as vital in terms of generating success or not .”
Buddy Frank , owner of consultancy Slot Strategies and formerly a longtime executive who headed slot operations at several Reno casinos before retiring as slot operations VP at California ’ s Pechanga Casino , agrees that the way free play is used is a determining factor in its success .
“ The ‘ pro ’ is that free play is the single most productive tool in the history of casino marketing ; the ‘ con ’ is that careless , unmonitored awarding of free play is an exorbitant expense and a colossal waste of money ,” Frank says .
“ You could also call it ‘ good free play vs . bad free play .’ With the excellent analytical tools available today , like QCI and Gaming Analytics , operators can fine-tune their use of free play to gain the maximum returns in profitability and customer satisfaction . This requires strict and timely monitoring of play patterns and careful analysis of free play redemption .”
BOUNCING BACK
Free play is a much more effective tool than its forebears , “ bounce-back ” coupons — so named because players would be required to bounce back to the casinos to redeem the rewards . “ Essentially , you would you would go to a casino , you would come home , then you open up the mail and get a check for $ 18.42 ,” recalls Andrew Klebanow , principal of Klebanow Consulting and a 40-year industry veteran .
“ This would stake you on your next visit , and the amount could change based on coin handle . Customers would come in with their casino check , go to the cage , take their money , and theoretically go play slot machines . But casino managers were always wondering , ‘ Gee , is my money walking out the door as opposed to going back into my slot machines ?’”
In many cases , that money did walk out the door . Advantage players in the early days would often go on “ coupon runs ” to collect their cash , not necessarily reinvesting it in casino play . Casinos would eventually verify this through careful examination of data , aided by the latest technology . But even in the early days of player tracking in the 1980s and early 1990s , operators figured out the pitfalls of coin coupons through simple observance .
“ They would employ people to stand by the casino cage and watch customers ,” says Klebanow . “ They saw some money walk out of the building , and other people would sit down and play slot machines . So , over the course of the 1980s and into the 1990s , casino managers were clamoring for slot
manufacturers to come up with a way they could award non-negotiable slot credits instead of cash . The problem was that back then , machines were not talking to each other or to the central casino management system in a standard manner .”
That problem , of course , was solved by the SAS protocols first introduced in 2004 , and most recently updated in 2018 . With machines and systems able to communicate with each other , the free play system was enabled , and free play could be added to the credit meters of machines from any manufacturer .
The advantages for operators were immediate . Not only were free-play rewards guaranteed to stay in the casino , but as a promotional expense , it was much cheaper than the more traditional rewards .
“ I could give you a complimentary meal ,” says Klebanow , “ but I ’ ve looked at hundreds upon hundreds of income statements for casinos over my career , and less than 10 percent of those casinos have a food and beverage department that is operating profitably . Even if you go back to the days of cashback , if I gave you a dollar in cashback , it was cheaper than a dollar in comps . The cashback cost me a dollar . A dollar in comps costs me $ 1.20 or $ 1.30 , because my food and beverage department is not operating profitably .”
Joyce adds that cashback remains an option even for casinos that depend on free play . “ Cashback has a higher perceived value ,” he says . “ You use it very strategically . There ’ s no breakage usually in cashback like there is in free slot play . It ’ s also harder to tie cashback promotions to time-based , play-based incentives and other triggers , versus free slot play .
“ Historically , though , when you give people more free slot play , they come in — they become more loyal . I think that has changed over time . Now , data science has become better . We ’ ve become more personalized , down to using your app and your phone and seeing your behavior , and what engages you with our brand . We all have largely the same slot machines on the floor , so how do we use our marketing tools to differentiate ourselves and our experience ?
“( Free play ) is just one piece of the pie , but it may not be as big as it was a decade ago .”
In jurisdictions like Pennsylvania , where Joyce markets the Live ! casino , regulation has made free play a more attractive piece of the marketing pie . Since the free-play expense is deducted from gross slot win , the state ’ s casinos , with an effective 54 percent slot revenue tax , can remain competitive with neighboring New Jersey , where the tax rate is 8 percent .
“ I ’ m not sure we could survive if it was any other way ,” Joyce says . “ I do not think we would be able to compete with Atlantic City . We have a 50-plus percent tax rate , and I can see the bridge outside my window to my right towards New Jersey . It ’ s a less than a one-hour drive , and I ’ m paying 8 percent tax . So , my reinvestment capabilities are so much greater ( with free play ).”
MARCH 2025 www . ggbmagazine . com 19