The gaming industry, renowned for its rapid evolution and innovation, is constantly seeking strategies to attract and retain players. One such strategy, free-play promotions, has long been considered a staple in the casino marketing toolkit. However, a recent study by Anthony Lucas, a researcher at the University of Nevada, Las Vegas (UNLV), suggests that these promotions may not be as effective as previously thought. In this blog post, we will explore the findings of Lucas’s study, discuss the implications for the gaming industry, and provide actionable insights for casinos looking to optimize their marketing efforts.

Free-play promotions have become a ubiquitous feature in casinos worldwide. These campaigns offer players complimentary credits to encourage visits and increase spending. The logic behind this strategy is simple – give players a taste of the action for free, and they’ll be more likely to stay longer and spend more. But is this really the case?

Anthony Lucas, a professor at UNLV’s Harrah College of Hospitality, conducted an in-depth study to determine the effectiveness of free-play promotions. The study analyzed performance data from a tribal casino in the Western United States over several years. Initially, 400 participants received $15 in free-play each week. In the second year, the participants were divided into four groups, each receiving different amounts of free-play ranging from $0 to $15. The aim was to observe changes in visitation frequency and spending per visit.

The results of the study were eye-opening. Despite the reduction in free-play incentives, there was minimal change in both visitation frequency and spending per visit. Specifically, the study found no significant decline in spending per visit after reducing the free-play awards. One of the most surprising findings was that spending per visit remained consistent regardless of the amount of free-play received. Lucas noted, “There was no decline in spend per trip after reducing the awards.” This challenges the conventional wisdom that free-play is essential for driving spending within the casino.

While spending per visit remained steady, the study did note a 20% decrease in visitation for the group that received no free-play. However, there was no significant change in visitation for those receiving $5, $10, or $15. This suggests that while completely eliminating free-play incentives may deter some visitors, reducing the amount does not significantly impact overall visitation rates. Lucas’s research challenges the long-held belief that free-play promotions are critical for maintaining player engagement. Casinos typically invest millions annually in these promotions, but the study suggests that reallocating these funds to other areas could be more beneficial.

Given the study’s findings, casinos might consider redirecting their marketing budgets towards enhancements that could offer better returns. For instance, investing in customer service improvements or facility upgrades could provide a more substantial impact on player satisfaction and loyalty.

“This work doesn’t show that free-play is bad, more that it’s evolved into a place where it’s not achieving its stated aims,” Lucas pointed out. With the changing dynamics of player preferences and behaviors, it’s crucial for casinos to adapt and innovate their marketing strategies. With 40 years of experience in the gaming industry, Anthony Lucas continues to contribute his expertise in casino operations, marketing, and financial analysis. His latest findings add a valuable perspective to the ongoing discussion about the efficiency of traditional marketing strategies in the gaming sector.

In September 2023, UNLV partnered with Boyd Gaming to establish the Boyd Innovation Lab within the Black Fire Innovation Building. This collaboration aims to advance technological advancements in Southern Nevada’s hospitality sector. Boyd Gaming’s innovation team works with UNLV students and faculty to develop new technologies and ideas, further enhancing the industry’s growth and development.

The findings from Lucas’s study underscore the need for casinos to continually assess and refine their marketing strategies. While free-play promotions have been a reliable tool in the past, it’s clear that their impact is waning. Casinos must stay ahead of industry trends and adapt to the evolving preferences of their players. To remain competitive, casinos should explore new marketing avenues that resonate with modern players. This could include personalized marketing campaigns, leveraging data analytics to understand player behavior, and implementing innovative technologies to enhance the overall gaming experience.

Casinos can also focus on building a strong community of enthusiasts by fostering engagement through social media platforms, hosting exclusive events, and offering loyalty programs that provide real value to players. By creating a sense of belonging and excitement, casinos can drive long-term loyalty and repeat visits.

Anthony Lucas’s study highlights a critical shift in the effectiveness of traditional casino marketing strategies, particularly free-play promotions. While these incentives have been a staple in the industry, their impact on player engagement and spending is diminishing. For casinos, this presents an opportunity to reevaluate their marketing budgets and invest in areas that offer greater returns.

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