CASINO COMPS DURING THE RECESSION

Many clients have asked me how this recession has affected casino comps. The answer is tricky because not all casino comps have been affected the same way. Also, not all casinos share the same philosophy about comping in the first place. Let me explain.

Las Vegas and Atlantic City, the two largest gambling destinations, have been hit the hardest by the recession. These two cities rely on people from outside the immediate area to come to town and stay overnight. During bad times, fewer people travel to resort areas. Casinos that draw from the nearby population, that is, casinos on Indian reservations, center city casinos and riverboat casinos, are experiencing a smaller downturn. They do not have to attract players from out of state, let's say, to survive.

To combat this problem, some casinos in both Las Vegas and Atlantic City will increase all their comps to attract more people. But some casinos will increase their comps only on slot machines. They feel the table game players expect less comps than slot players. It is easier and more effective to advertise greater slot comps. Certain casinos in Atlantic City gave away as much as 5X slot dollars during October and November. That is, if you earn $100 in one day, they will give you $500.

This appears great on the surface, but the casinos don't give something away without getting something back. If you play a $1 machine it may be set to a 96% return. Let's say for the next 30 days you get 5X slot dollars. All the casino has to do is lower the return to 95%. This makes up for the increased slot dollars and you'll never know it.

Some casinos take a totally different approach during bad times. They will tighten their belts and reduce the comps, no matter what the game. This is easily achieved by lowering the theoretical win on table games, which in turn lowers the amount of the comp.

Some casinos, like those in the Caribbean islands, rely more on seasons to succeed. The Bahamas, Puerto Rico and others are completely booked from November to April. During this period even the best players are comped less because casinos will be filed with paying people no matter what. In other words, the demand during this period is so great a recession doesn't matter.

However, April through November, especially the summer months, the comps are more liberal in the Caribbean. This is because the demand is not there. During this time Caribbean casinos run package trips, including airfare, and you don't even have to gamble. This is because they make enough money during their peak period without much comping to carry the off-peak period with liberal comping.

Keep track of the different comps. Most casinos advertise when they increase slot dollars, but you may not know about other promotions or giveaways during slow economic times unless you ask. If you need to, go to a casino host, or customer service and the marketing department for information about special promotions. They want your business, especially during tough times. Make them stretch to get it.