Acres Manufacturing position paper questions free play incentives

September 13, 2023 1:39 PM
Photo: Shutterstock
  • Rege Behe, CDC Gaming Reports
September 13, 2023 1:39 PM
  • Rege Behe, CDC Gaming Reports

Acres Manufacturing Company Wednesday released a new position paper that indicates outdated casino management systems have a $37 billion impact annually on player loyalty investments. The position paper is based on surveys of approximately 200 casinos in the United States.

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“The casino industry’s continued reliance on free play to incentivize player loyalty is impacting industry slot profitability by more than $37 billion every year, with smaller casinos typically bearing a larger relative percentage of this impact,” said Acres Manufacturing’s Noah Acres in a statement. “The industry’s strategy of using free play to buy loyalty is completely misaligned with player preferences, as the potential to win is what truly drives loyalty, not free play.”

Acres adds that leveraging the company’s Foundation HQ CMS to replace free play yields “a gamified loyalty experience delivered in real-time. As players spend their own money, casinos can exponentially grow revenues and profitability by modernizing their loyalty programs to eliminate massively scale and entertain new players rather than giving away expensive and underappreciated free play entitlements.”

Highlights of the position paper include:

  • Many loyalty programs provide player reinvestment rates approaching or even exceeding 100% when exploited optimally, only maintaining profitability through breakage caused by unredeemed rewards, or players that do not take full advantage of the program.
  • Casinos’ net reinvestment in player loyalty conservatively hovers above 35%, approximately $25 billion, with free play being the largest single cost contributor.
  • Free play takes up a significant portion of available play time, diminishing profitability on novice or time-limited players.
  • Including the time value of free play, net reinvestment rises to over 50%, or more than $37 billion.
  • If free play is eliminated without an impact to loyalty, profitability of slot machine operations would more than double.

The new position paper is available here.

Acres will feature the capabilities and benefits of its Foundation HQ CMS technology at Booth 4211 at the Global Gaming Expo, October 10-13, 2023, at the Venetian Expo in Las Vegas.