How patrons value casino promotional offers: A conjoint study

Abstract

Casinos rely extensively on free slot play (FSP) offers for incentivizing patron visitation. However, there has been a lack of understanding its influence on driving patron visitation and patrons’ valuation of FSP compared to other casino promotional offers. This study conducted a conjoint analysis on patrons’ valuations of FSP compared to other promotional offerings at a casino resort. Moreover, this study investigated the roles inter-casino competition and visitation frequency have on patrons’ perceived valuation of FSP through a hierarchical Bayes model. The results show that competition plays a significant negative role on patrons’ valuation of FSP, while competition held insignificant influence on patrons’ valuation of food and beverage (F&B) comp offers. Additionally, patrons who visited the casino more frequently valued FSP greater, while less active patrons valued F&B comp offers more. Using the study’s results, casinos can increase their margins through increased efficiencies with their promotional offering mix.

Senior leadership succession and market share: An econometric case study on Native American casinos

“…Additionally, as expected, Unit Win positively effects market share as casinos who get more out of their slot units on the floor can expect a greater share of their market. Even though FSP has long been considered a trip driver (Legg and Hancer, 2020), the percentage of FSP in the market had an insignificant effect on the market share. This may be due to Connecticut being a more mature market coupled with FSP already being saturated in the market.…”

“…Another endogenous factor within the Bertrand Market are promotional offers (i.e., coupons), specifically free slot play 3 (FSP) which the Connecticut casinos have widely relied on to drive visitation (Legg and Hancer, 2020). FSP are discounts that lower the entry price for patrons to gamble.…”

“…FSP are discounts that lower the entry price for patrons to gamble. Legg and Hancer (2020) pointed out that within the previous decade, redemptions of FSP exceeded US$100 million annually at both Connecticut properties. With FSP having potential influence on revenues, we also test FSP coupons effect within the model.…”

“…3Free slot play (FSP) coupons are broadly leveraged promotional offers for incentivizing to visitation to casinos (Legg and Hancer, 2020). FSP coupons are redeemable only on slot machines.…”

Casino-induced satisfaction of needs and casino customer loyalty: the moderating role of subjective norms and perceived gaming value

“…Lucas and Nemati (2020) found that perceived gaming value from promotional offers (e.g., free-play awards) is greater than the perceived value of potential outcomes derived from additional wagers. Legg and Hancer (2020) found inter-casino competition (frequency of visit) negatively (positively) influenced the perceived gaming value of free slot plays. In other words, people will sense a higher level of perceived gaming value if they feel justified (underpinned by fairness theory) or happy (underpinned by utilitarian theory) that the money they spend could earn them enough benefits in return.…”