Casino Player Rating Systems in Australia

Introduction | The Adelaide Casino Complimentary Policy | Terminology | Other Australian Casinos | Complimentary Policy Profitability | Analysis of Rounds per Hour on Blackjack | Rounds Per Hour (per player) | Hard Versus Soft Comps | Rating Efficiency Levels | Conclusion |

Definitions

a. Hard comps: A complimentary where the actual cost to the company of the reimbursement is equal to the retail cost and due to a payment being made to a non affiliated third party.

b. Soft comp: A complimentary where the actual cost to the company of the reimbursement is not equal to the retail cost but equals a wholesale or partial cost plus a labour component. Soft comps may vary from being a 100% soft comp. (no real cost) to a hard comp in situations where 100% utilisation of the facility occurs.

Implications

The real profitability of operating a premium player program may be distorted by the manner in which complimentary costs are handled in accounting terms. If the retail cost of every complimentary (hard or soft) is accrued against the program then that process may negatively impact on the program if the provision of soft complimentaries is a marketing tool.

For example, if a premium player visits the facility and is provided restaurant meals at his/her request at full retail cost against their complimentary value, then the value of other complimentaries which may be extended will be reduced. This may alter a player’s perception of the Casino if their play levels have not altered, yet the perceived level of service has declined through the reduction in complimentaries. This is especially true for the marginal premium player whose average bet level ranges between $50 to $100 per decision.

During peak periods all complimentaries must be considered at retail value.

This duplicity of costs suggests that an optimal scenario would be to offer distinct programs based on seasonality/special events with greater soft comps being offered in the off season as an incentive to attract gaming activity, thereby potentially increasing the total complex profit both through the increase in trade and through the correct treatment of soft complimentaries as an item which does not impact upon the profitability of the program.