Theoretical loss (theo) has for decades been the casino industry’s standard to evaluate a player’s revenue generating value to a property.
Described as a “misleading and flawed metric” by Noah Acres of Acres Manufacturing, theo has been rendered obsolete thanks to the development of “Player Budget” and Foundation HQ, the new generation casino management system available on Acres’ Foundation platform.
Foundation is the first-of-its-kind casino management system that generates real-time data from slot machines and a direct interface to the credit meter on any slot machine.
Acres sums it up this way: “The only accurate way to predict a player’s ability to spend is to determine how much of their own money they are willing to risk. That is exactly what Player Budget does”.
“The amount of “coin-in” that a player goes through does not directly correlate to the player’s wallet size,” Acres explained. “Our Player Budget cuts through all that. This is where theo becomes misleading. Theo mistakes the churn of coin-in for player value, when in fact player value has very little to do with the churn of coin-in.
“What Foundation HQ does with Player Budget is to identify the very best players by benchmarking their largest in-session loss. The player is showing us exactly how much they are willing to spend. With this information, marketers can maximize efficiency in their direct marketing efforts.”
The impact of Player Budget is significant to properties wishing to maximize the efficiency of their marketing. Acres estimates that casinos in the United States spend over $25-billion each year to market to slot players based upon the flawed theo algorithm and its inability to identify precisely how much each player is willing to spend.
“Player Budget transcends the entire notion of tier-based marketing,” Acres continued. “Today, casinos separate players into tiers, and more or less distribute identical offers amongst those tiers.
“We are building a platform on which every player has their own identified value, and this sets the parameters for marketers building their offers. Many players today know how to exploit the loyalty program without spending much real money. Player Budget enables casinos to reduce marketing costs to ‘dud’ players and redeploy them to more lucrative players.
“With Foundation HQ and Player Budget, we are giving casinos the tools to determine what each player’s value is, and more tools to maximize the chances of earning that player’s value on the current trip and future trips.”
The key, Acres revealed, is the ability of the company’s Foundation platform, which includes in-game hardware that can process real-time data, explaining, “Every slot meter movement is reported in real-time. These granular measurements allow us to identify player value and profit potential and build predictive models that show how a player will behave over time”.
Acres Manufacturing’s Foundation HQ CMS, which will be deployed in April, enhances the capabilities of Player Budget by personalizing gaming experiences to maximize player entertainment and loyalty.
While Player Budget is available now, bonuses, free play, and mobile enrollment are among some of the features of Foundation HQ that will be layered in over this year and 2025.
“Through Player Budget we are building and are able to deploy an entire platform for providing data, marketing analytics, and experiences for players,” Acres concluded. “We are developing bonuses and different games guests can play to modify their gaming experience.”
