Casino Comps: How The Comp System Works

by John Grochowski

Brand loyalty is as important to casinos as it is to any company selling laundry detergent, fast food, financial services or anything else.

How do casinos get you to come back again and again? After all, every operator has access to the same games, though they may choose versions with higher or lower house edges.

One tool for encouraging brand loyalty is the player rewards system. It’s through these systems that casinos reward players with a percentage of their play in cash or free play, or award comps such as meals, free or discounted hotel rooms, show tickets, gift shop discounts and more.

It starts with the player. If you want comps, you must start by enrolling in the casino’s player rewards club. To give you rewards, the casino needs to know who you are and how much you wager. So when you enroll, you are given a plastic card with your membership number and a magnetic stripe.

When you play electronic games such as slots or video poker, you slide your card into a magnetic reader and it tracks your bets.

At table games, you typically give your card to the dealer, who either runs it through a reader or gives to a supervisor to run through a reader in the pit. Your buy-ins are keyed into a computer, and the dealer and supervisor put their heads together to enter your average bet. When you leave, the amount you cash out also is recorded.

It’s less precise than on slots, where it’s easy to track your exact wagers, but casinos are continually looking for ways to make the tracking more precise. Casinos can get an exact count on your bets on tables that use electronic betting pads instead of chips, such as Rapid Roulette.

Once casinos know how much you’ve wagered and how long you’ve played, they can calculate an average loss. On that basis, they decide how much to offer you in comps.

Actual wins and losses are less important in comps formulas than expected averages. Operators understand that you’re going to win sometimes and lose more than the average sometimes, but the more you play the closer you’ll come to the averages determined by the odds of the game.

The goal is to encourage you to come back for more, so comps will be awarded even if you’ve had a big win.

HOW COMPS WORK: THE BASICS

On a table game, your average bet, the length of time you play and the number of bets per hour yield an approximate total wager.

If you bet a flat $10 a hand, entering your average bet is easy. If you vary your bets, then the dealer and pit supervisor put their heads together to estimate your average bet.

Assume you’re playing blackjack at a full seven-player table, playing an average of 60 hands per hour. If your average bet is $10, your average total is $600 per hour. If you play for three hours, you risk $1,800.

Next, the house edge is applied to that total to calculate a theoretical loss. If the house assumes it has a 1.5 percent edge against an average blackjack player, then your theoretical loss is 1.5 percent of $1,800, or $27 for your three-hour session.

Casino operators base comps on that theoretical loss. A percentage of it is rebated to players as meals, rooms and so on. Bigger bettors and those with longer play and a bigger theoretical loss get more comps.

The situation is only slightly different on the slots, where the casino has an accurate count of your bet size, number of plays and total wager. If your wagers total $1,000 on a penny slot that returns 90 percent, your theoretical loss is $100. As on tables, your comps are based on that theoretical loss rather than actual wins and losses.

On slots, the most common reward is cash back or free play. In most modern casino management systems, you can enter a PIN to redeem for free play at the machine you’re playing. In casinos that give cash, you can redeem at a club booth.

SLOT POINTS

Some player rewards clubs tell you their formula for awarding points while others keep the information private.

If the casino makes its formula public, you can follow along your progress toward rewards.

Formulas vary. Let’s walk through an example.

Imagine that it takes $4 worth of wagers to earn one club point, and that 100 points are worth $1 in cash back, free play and comps.

That mean it takes $400 in play to earn $1. Divide $1 by $400, then multiply by 100 to convert to percent, and you get 0.25 percent.

In this instance, 0.25 percent of your play is rebated to you in rewards, effectively turning a 99-percent game into a 99.25-percent game.

That’s not a set number. Some clubs give as little as 0.1 percent. At the top end, rare clubs have been seen with a 1 percent reward rate. But the biggest cluster is around 0.2 percent.

With some video poker games, adding 0.25 percent into the return on the game would push the total past 100 percent. Most clubs adjust for the higher paybacks on video poker by cutting the reward rate and giving fewer comps for the same amount of play to video poker players vs. slot players.

Similarly, most table games have lower house edges than slots, and it takes more play on tables to get the same reward level as a slot player.

EXTRA REWARDS

In modern clubs, rewards you can redeem at the games or at club booths are just part of the picture.

Clubs also try to attract repeat visits by using direct mail, email, instant messaging and club apps to offer cash, free play, tournaments, rooms, meals, gift items and other comps. Offers often are tailored to you preferences, according to data casinos have gathered.

Systems have become increasingly sophisticated, employing customer management software. The most sophisticated systems not only track your wagers as you play, but encourage you to use player reward cards throughout the property, including the hotel, gift shops and even golf courses.

That gives the casino important data about its customers and enables operators to tailor promotions. Golfers might be offered a golf weekend package including rooms, show-goers might see an offer for show tickets and rooms and those who eat at fine-dining restaurants might be invited to a gourmet dining weekend.

All offers are based on your value to the casino. The amount you spend on games is the prime driver, but some clubs also consider the amount you spend in restaurants, hotels, spas and other amenities.

Players who are serious about evaluating rewards programs include not only their redemptions in the casinos, but also what they receive later. A club in which a given amount of play not only brings you $25 in free play on the day of visit but also brings an offer for another $25 when you return has more value than a club that doesn’t follow your initial redemption with another offer.

But that’s up to you. Rewards are part of a casino’s overall attraction, along with the game mix, wagering minimums and maximums, restaurants and other amenities. Comps are an extra to consider in evaluating which casino has the mix that’s best for you.

John Grochowski has been covering casinos and casino games for nearly 40 years. He is the author of six books and
his work appears in newspapers, magazines and websites around the world.

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