Politics and religion are generally off-limit topics in friendly gatherings because they’re bound to spark disagreements. Maybe talking about whether to offer free slot play should be added to that list.
“Never have so many played so much and understood so little,” Michael Meczka, president of MMRC Inc., a casino consulting firm based in Los Angeles, said in a panel discussion Tuesday at the annual National Indian Gaming Association conference. “That not only applies to players, but to casino operators.”
Buddy Frank, a longtime casino slot executive now working as a consultant with Buddy Frank Slot Strategies and as a contributor to CDC Gaming, contended that free play is a good tool when used properly, but emphasized the need for proper use. Daryl Boykin, a former poker manager at Suncoast Casino who recently completed a doctorate in hospitality administration and management at the University of Nevada Las Vegas, said free play “gives away a lot of profit” if casinos use it in calculating a player’s theoretical loss.
The three spoke Tuesday at Free Play: More Science Than Art, a panel moderated by Michael May, vice president of table operations, poker and OTB at Pechanga Resort and Casino.
Meczka urged casinos to do a better job at knowing and understanding what customers want, saying that free play is not necessarily the final determination. Comps of hotel rooms and food can be more enticing than free play.
“Give them a good gamble,” he advised. That includes solid games that offer players more time on their favorite machines while staying within their budget – meaning reducing the casino take from slots.
“Whatever happened to low-hold games?” he asked, noting common holds of 12 percent to 14 percent on penny slots. Frank, however, doubted that casino executives would agree to a significant reduction in slot hold.
A 2015 study by the Association of Gaming Equipment Manufacturers showed that slot hold had increased steadily nationwide since 1996.
Frank likened free play to a store running a sale, with the end goal of increasing traffic.
“Some customers like free play,” he said. “(But casinos) have to have the discipline not to just give it out willy-nilly. Give it to the right people to increase visits.
“If the customer’s totally unprofitable, you don’t need them in there. Free play is a terrific tool if it’s given to those customers you can accurately track. If your free-play offer got you more visitation than before, you’ve got a winner. If it didn’t, you shouldn’t do it.”
He said technology can help casinos track how individual players use free play.
“Take free play away from those who don’t deserve it,” he said.
Boykin, Frank, Meczka and May all agreed that casinos must improve their tracking of table game players.
Boykin noted that the casino hold on table games is “very thin” compared with slots, although the advent of side bets with a higher house advantage than the standard game has helped.
Frank pointed out that Aqueduct Casino in New York, which has 6,000 slots and electronic games and attracts 10 million visitors a year, is the most profitable casino in the country despite having a slot hold of only 4 percent. While commercial casinos have had a difficult time reducing slot hold and suffering temporary revenue losses with an eye to potential greater future profitability, Frank praised tribal casino operations, saying, “God bless Native American casinos for having a long-term generational view.”
Meczka said casinos have made several mistakes in creating a players’ sense of “entitlement” to free play.
“No industry, with the possible exception of selling marijuana, has the profit margins of a casino,” Meczka said. “We discounted our product before we knew what it was worth. We’re giving it away, and we shouldn’t, because it can be very, very difficult to re-establish its value (afterward).”
