Understanding Comps

Why Are Players Seeing Deflated Casino Offers?

Caesars Atlantic City
Written by Joshua

December 2020 casino offers have driven a lot of conversation in various forums and in my inbox lately. Most prominently the feedback I’ve seen (being East Coast-based I’m in a lot of casino groups that focus here) is around a significant drop in Caesars-owned Atlantic City properties.

When the merger was in progress I predicted that offers could be on the chopping block, given Eldorado’s history of slashing offers as a cost-cutting maneuver once they took over properties. That was the case when they bought Tropicana in Atlantic City, for instance, and many players (myself included) saw their offers cut in half or more.

December is the first month where Caesars doesn’t own Bally’s, and while Caesars Rewards is going to be phased out on that property over the next few weeks (some card functions will still be accepted through year’s end, from what I’ve seen of reporting), that, plus Tropicana aiming to be fully on the Caesars Rewards system by year’s end, may mean this could be the first month where all of these changes, and any comp calculation changes by Eldorado for this market, are fully baked in.

But we’re also in a period where a massive wave of restrictions have been rolling out nationwide as COVID infections rise, and New Jersey is among the more restrictive, including closure of indoor dining and drinking after a certain hour. These restrictions impact the ability for casinos to operate profitably, and giving away big offers when they can’t book all their rooms or restaurant seats, let alone have all the slots and table spots in operation, may just not feel like the best move.

Casinos have seen pretty strong results despite the headwinds they’ve been facing – markets like the Las Vegas strip, which are more dependent on tourists, have seen the largest hit due to travel slowdowns, but locals markets have been quite resilient as people are still willing to drive themselves to a local casino and spend a couple of hours. This means casinos may find themselves less needing to lean on big offers to drive people in.

So it could be coincidence that the offers were cut now, but it could also be the first month where Eldorado got to those offers. It’s going to take a couple of months for all this to shake out and see whether this was temporary to constrain cost during a second round of restrictions, or whether this was a permanent change by Eldorado to work on their $500 million in cost savings post merger.

Why do I think it might not be Eldorado alone? Other players, including Mlife players in Ohio and Massachusetts, have mentioned their offers have been heavily slashed too. (My Springfield offer was not slashed for December; I’ve only visited once since they reopened so perhaps I’ve just been lucky.) If Mlife is taking similar actions this could be more about cost management during a difficult time than a permanent change to the offer structure.

These restrictions are likely to be around as long as we’re all forced to stay indoors due to the colder weather, so my guess is by around March or April we’ll begin to see whether these changes are permanent or temporary. Of course, if they rebound sooner that’ll tell us sooner, but my guess is these changes aren’t one-offs and will likely make it through a couple of cycles to see how it hits player turnout and the bottom line.

About the author

Joshua

My name is Joshua, and I’m a 30-something who works in tech as a marketer by day, and dabbles in casinos periodically during off-times. Know Your Slots will reflect my interests in understanding the various ways you can play slots, games that give you a potential edge, casino promotions and systems and how you can get the most out of it.

2 Comments

  • Hi Joshua, first of all thanks for the wonderful, entertaining website. My subject of this post has to do with payout programming. I frequent a couple of non-gambling game sites, where you wager credits that are replenished by the sites or that you can purchase from the sites. I noticed on one particular site that when I wager large amounts of units I don’t get very many line hits, yet when I wager the lower end of the scale I get many line hits containing multiples of the original wager. I can wager 5000 units and frequently get 25000-80000 returns on a spin. Yet When I up the wager to 50000, I can go thru 2M without more than a hit or two of insignificant return. I assume this is so that I must buy credits, which ultimately supports the website business. Now my question. Wouldn’t it be possible for a casino slot machine to be programmed to have more payouts at the lower wager amounts and less frequent wins at the high end? The high end wins would be commensurate with the wager but at a lower frequency than the lower wager hits. The RTP could be different for each wager, but kept in balance so as to meet the requirements of the casino. Thank you.

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