A recent study conducted by Anthony Lucas, a researcher at the University of Nevada, Las Vegas (UNLV), indicates that the effectiveness of casino free-play promotions may be decreasing among certain player groups.
Lucas, a professor at UNLV’s Harrah College of Hospitality, found that reducing free-play incentives resulted in minimal changes in both visitation frequency and spending per visit.
Free-play campaigns, which offer gamblers complimentary credits to encourage visits, have become a prevalent strategy in the gaming industry. However, Lucas' research suggests that these incentives may no longer be as effective as once believed.
The study analysed performance data from a tribal casino in the Western United States over multiple years. Initially, 400 participants received $15 in free-play each week. In the second year, the participants were divided into four groups, each receiving different amounts of free-play ranging from $0 to $15. The study aimed to observe changes in visitation frequency and spending per visit.
The results showed no significant decline in spending per visit after reducing the free-play awards.
Lucas said: "There was no decline in spend per trip after reducing the awards."
The study did note a 20% decrease in visitation for the group that received no free-play, but no significant change for those receiving $5, $10 or $15.
This research challenges the conventional belief that free-play is essential for sustaining player engagement.
Lucas pointed out: "This work doesn’t show that free-play is bad, more that it’s evolved into a place where it’s not achieving its stated aims."
Casinos typically invest millions annually in free-play promotions to boost visitation and spending. The study suggests that reallocating these funds to other areas, such as customer service and facility enhancements, might be more beneficial.
Lucas added: "The data shows that you could do so many other things with that money with minimal-to-no consequence."
Lucas, with 40 years of experience in the gaming industry, continues to contribute his expertise in casino operations, marketing and financial analysis. His latest findings add to the ongoing discussion about the efficiency of traditional marketing strategies in the gaming sector.
In September 2023, UNLV partnered with Boyd Gaming to establish the Boyd Innovation Lab within the Black Fire Innovation Building. This collaboration aimed to advance technological advancements in Southern Nevada's hospitality sector. Boyd Gaming's innovation team worked with UNLV students and faculty to develop new technologies and ideas.
