Katherine A. Spilde

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

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

How Changes in the House Advantages of Reel Slots Affect Game Performance

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.

A Deeper Look Into the Relationship Between House Advantage and Reel Slot Performance

In two-game pairings of otherwise identical reel slot machines, the games with greater pars outperformed those with lesser pars. This finding held across five pairings, three casinos, three gaming markets, three game titles, three differences in pars, and five bank locations. These findings help clarify an important and polarizing issue within the literature and among casino operators. Many believe that increasing pars would be perceived as increasing prices, potentially driving customers to competitors. This concern takes on an exaggerated importance for operators catering to a frequently visiting, highly involved clientele. Over time, many believe such players would detect the increased pars, leading to an unwanted exodus of play. To the contrary, the findings did not support the ability of players to detect even egregious increases in the pars, suggesting a considerable insensitivity to changes in the obfuscated price. With pay tables featuring identical awards, there was no rational justification for playing the games with the greater pars. In spite of this clear disincentive, the games with the greater pars produced more theoretical win than their paired counterparts in each of five, two-game pairings. This suggested that an opportunity to increase operating profits may be available to those willing to buck conventional wisdom.

Gravity Models and Casino Gaming: A Review, Critique, and Modification

Results from an international field study conducted on three different casino floors indicated significantly elevated win levels on reel slots with increased house advantages. This work extended that of Lucas and Spilde, which found the same. Our study expanded their work by dramatically increasing the difference in the pars of paired slot titles, which were otherwise identical games. Still, the high par games outperformed their low par counterparts in the all-important metric of T-win. In addition, like Lucas and Spilde, the results of time series regression analyses failed to indicate signs that players were detecting a difference in the pars of the paired games. Specifically, there was no evidence of play migration from the high par game to the low par game. This result provided a valuable addition to the literature, replicating an outcome that refuted a popular operating theory. Moreover, the result was reproduced with considerably expanded differences in pars. Overall, the results supported the ideas that (a) players could not detect the egregious differences in the pars of otherwise identical games and (b) operators may be able recognize material gains in revenues from increasing pars. Both of these outcomes challenged the inveterate wisdom of the industry.