The Value of Value – Casino
Will casinos learn from the recession?
Why, on earth, would a casino risk its loyal customers by lowering payback enough to generate anger? A percentage point or two in slot hold will not overcome the loss of customers. Most casino professionals realize this. Some do not.
You’ve read in this space that casinos have not lowered slot payback percentages by much in response to the recession, but that there have been instances around the industry where they in fact did start tightening up the games.
We’ve also got reports from many players that there are a lot of casinos removing their full-pay video poker machines in response to the hard economic times.
Have these slot managers not learned anything?
As we’ve said in explaining why most of the top casinos have not tightened their slots, these moves simply don’t make sense with regard to the current economic situation. Any casino slot manager who is lowering payback percentages, or removing the best-returning video poker pay tables, has not grasped one of the main factors that has led to declines in their revenues, and it is a simple truism:
Players like value.
Players want some value for their wagering dollars. They want a fair shake, and they want to know they have a chance of leaving a casino with wallets that are heavier than when they arrived. Players love the idea of stretching their gambling dollars. They don’t even mind losing, as long as they feel they’ve gotten a decent dose of entertainment for what they’ve spent.
Lowering payback percentages goes against this grain. As our readers’ letters reveal so clearly, going through one’s money at a slot machine quickly, on anything approaching a consistent basis, has a guaranteed effect: frustration that turns into anger. That anger is inevitably directed at the house. Players who lose consistently at a particular casino do not become loyal customers, regardless of how nice the surroundings in that casino. They leave and do not come back.
Why, on earth, would a casino risk its loyal customers by lowering payback enough to generate that anger? A percentage point or two in slot hold will not overcome the loss of customers. Most casino professionals realize this. Some do not.
For those who do not, I’ll repeat that truism, which every casino official should repeat to himself or herself every day: Players like value.
The irony here is that casinos used to be all about value. Twenty years ago, value was how the vast majority of gaming halls got players in the door. Cheap rooms, cheap food, freebies—they gave the house away to get players into their casinos. Once in the casinos, players were given a fair deal, particularly in the locals casinos—good odds on craps and liberal blackjack rules were matched on the slot floor with high paybacks and full-pay video poker.
However, for the decade leading up to the Great Recession, the large casinos became all about luxury. Room rates shot through the roof; high-priced restaurants and ultra-lounges sprang up. Casinos spent billions to create palaces of excess where people would spend money away from the casino, forgetting that the casino was the reason they were there in the first place.
There was a recession in the early 1990s, you know. Casinos were deemed recession-proof because they kept churning right along. But that was before the luxury trend took hold—by and large, casinos thrived during that downturn because they were still about value. The more recent recession found the big-spenders who weren’t necessarily gamblers abandoning the palaces that had been built for them, and guess what? Rooms meant to go for $400 are being given away for $99.
The smart casino operators are bringing value back to the casino—bringing back the gamblers who will happily turn their money over to a casino offering a fair shake. High payback and full-pay video poker are appearing where they have never been seen. Heck, I found 9/6 Jacks-or-better video poker last week at the Atlantic City Hilton, a place I had played for decades without seeing this variety of full-pay machine.
You know what? I’ll go back there.
As I’ve reported before, there has not been a wholesale lowering of payback percentages on slot floors in response to the recession. But there have been some instances of this stupid practice. Message to casinos: Read the above credo. Give us value.
This Just In…
Want to play slots in some real luxury? The Greenbrier in White Sulphur Springs, West Virginia is expected to have its new casino open by this month. The 130-year-old mountain resort, historically a favorite of kings and presidents, has added a 320-machine casino, situated underneath its famous front-lawn flower bed. Perks include free nightly champagne for guests. And some killer views outside.
When to quit? Success at the slots depends on a visit from Lady Luck, more so than most casino games. This is why one of the hardest decisions on slot floor is when to quit playing. Some experts say to stop, or at least take a break, after you hit a big jackpot. That’s fine, but should you quit playing simply because you’re ahead? Not necessarily. The simplest answer on when to quit is this: Quit when it’s not fun anymore to play. If you’re ahead or even, you’re probably having fun. Even if you’re down, the fun of the gamble is often still there if you have a healthy reserve. It’s when you lose and begin to chase the losses, or feel frustration, that it’s a good idea to quit. Slots are supposed to be fun. If they’re not fun anymore, don’t play.
Winning doesn’t mean you’ll lose next. Many people quit playing after a jackpot simply because they figure the machine is “done paying out.” That’s not necessarily true. Every result on a slot machine is independent of every other result. You have the same chance of winning on the spin after a jackpot that you had on the jackpot spin. That even includes the top jackpot. By law, that top prize must be possible on every spin. It’s not a bad idea to take a break after a big jackpot, just to split the session up. However, winning doesn’t mean you’re going to lose next. You may indeed, but then again, you might just win again.
Will casinos learn from the recession.