Estimating the Effect of Casino Loyalty Program Offers on Slot Machine Play

Document Type

Article

Publication Date

1-1-2017

Publication Title

Cornell Hospitality Quarterly

Volume

58

Issue

3

First page number:

263

Last page number:

271

Abstract

Annual investment in casino free-play campaigns is usually great, yet little is known about its ability to generate increased gaming expenditures/behavioral loyalty. A method and model are advanced to estimate the impact of these costly and notoriously difficult-to-measure programs, providing critical business intelligence for use in the management of these ongoing campaigns. Actual slot machine performance data from two tribal casinos were examined, allowing for an empirical test of a critical link within an existing theoretical model of customer responses to loyalty programs. Using data from two 365-day samples, our model successfully explains the variation in slot wagering at both donor casinos. One resort’s free-play campaign shows signs of success while the other’s indicates a need to retool its $15 million annual campaign. Although the theoretical linkage of customer responses to loyalty programs (LPs) is well established in the broader context, yet its applicability to casino LPs remains questionable given the mixed support from this study and the results of extant free-play research. © 2017, © The Author(s) 2017.

Language

english

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