New research shows that common casino giveaways, such as free rooms and dining credits, are less profitable and lead to unhealthy competition between casinos than some alternatives such as free travel or parking.
The research was conducted by Seul Ki Lee, an assistant professor at Temple University’s School of Tourism and Hospitality Management, and examined monthly promotional allowance and expenditure data from 11 casinos in Atlantic City.
The most popular offers were free rooms, food, drinks, gaming credits and cash. The idea of these promotions is that they force players to stay at the casino in order to make use of them.
However, the research found that casinos could see additional bets of $8.45 from every dollar spent on travel and parking promotions compared a return of just $2.51 on every dollar spent on room, food and drink giveaways.
It is also thought that travel promotions could create additional demand through consumer spill-over for the entire casino market.
Lee said that travel promotions “aren’t necessarily creating new demand for the market as a whole, but casino operators are reluctant to pursue promotions that would benefit the entire system rather than them exclusively.”
It has been suggested that a third-party agency coordinates joint-promotion travel and parking programs across multiple casinos.