Comparing Loyalty Program Tiering Strategies: An investigation from the gaming industry

Loyalty programs are popular marketing strategies developed for the purpose of attracting, maintaining, and enhancing customer relationships. Due to the explosive worldwide growth of, and increased competition within, the casino industry has compelled contemporary casino marketers to rely more heavily on loyalty programs to increase guest allegiance and the frequency of repeat visits from their customers. Despite the widespread usage of loyalty programs across various gaming businesses in Las Vegas, its effectiveness has not quite been validated. The purpose of this study is to examine customers’ behavioral loyalty within the Las Vegas gaming industry and examine the effectiveness of a specific loyalty program using secondary data obtained from a Las Vegas casino hotel. Specifically, this study segmented loyalty program members to investigate the effectiveness of a casino loyalty program’s tiering strategy on members’ purchase behavior. Further, this study employed Recency-Frequency-Monetary (RFM) analysis to examine two different types of tiering strategies

Session 2-3-F: Gaming Applications of a Forgotten Distribution

Introduction The bonus game has become a very important part of the slot machine, as indicated by a large number of patent applications and patents (Bennett, 2000; Slomiany and Grupp, 2000; Vancurra, 2000; Baerlocher et al, 2002; Jaffe et al, 2002; Cannon and Donovan, 2003; Dickerson, 2005). Therefore, probability distributions suitable for developing games are very much in need. In this study, we illustrate how a forgotten discrete probability distribution, viz. the negative hypergeometric distribution, can be used to develop bonus games for slot machines, and also to analyze existing bonus games. The mean and the variance for this distribution were not readily available. However, these measures were recently computed using a new technique (Jones, 2013) and are available at present. The mean of the probability distribution is needed to compute to the house advantage or par of a slot game, and the variance is needed for calculating the variance of the slot game payout distribution. The variance of a slot game significantly impacts the ‘time on device’ that a player gets (Lucas et al, 2007; Lucas and Singh, 2008) from the slot game, and therefore is an important parameter of a slot game

Estimating the Ability of Gamblers to Detect Differences in the Payback Percentages of Reel Slot Machines: A Closer Look at the Slot Player Experience

The results of play on 60 different computer simulated reel slots challenge the widely held theory that frequent slot players are able to detect changes in a slot machine\u27s house advantage as slight as 1 to 2%. These findings affect the formulation of critical and capital-intensive customer retention strategies and brand positioning campaigns within the gaming industry. An overwhelming majority of 10,000 virtual players were not able to reject the hypothesis of equal payback percentages after playing both a 3% game and a 12% game (i.e., a 400% increase in the house advantage). This result held across three levels of pay table variance and five levels of trials or spins. The differences in house advantages examined herein ranged from 33% to 400%, across the various 2-game comparisons. The results also fail to support those who argue or fear that frequent slot players are able to detect changes in the house advantage over time. Profits from slot operations are critical to the success of most casino resorts, making this research into the slot player experience a valuable contribution to both the literature and casino management

Foreign Exchange Rate Effect on International Gaming Demand: An examination from an Upscale Las Vegas Casino

Las Vegas has developed into one of the world’s top tourist destinations, and the international market has become a vital stream of the city’s revenue. The objective of this study was to understand the foreign exchange rate as a determinant for international gaming demand in the Las Vegas gaming industry. This study applied the econometric modeling method of panel data analysis to secondary data originated from a Las Vegas Strip casino property. This study attempted to validate the foreign exchange effect through empirical investigation. Results of this study showed that foreign exchange rate has an impact on international gaming demand

Estimating the Indirect Effect of Sports Books on Other In-House Gaming Volumes

Using data from a repeater market hotel in Las Vegas, Nevada, the relationship between sports book and slot machine revenues is examined. Daily sports book write and daily slot handle are compared over a 250 day period. Though many industry leaders theorize that sports book gamblers also wager in slot banks, the results of this Autoregressive Integrated Moving Average (ARIMA) analysis fail to demonstrate a statistically significant relationship between sports book write and slot coin-in at the 0.05 alpha cutoff. This study advances literature currently available by establishing the lack of such a relationship and disputing the generally accepted assumption that sports books produce a substantial indirect contribution to slot revenues. While the sports book does generate a fairly constant direct profit for the casino, the absolute value of that profit is minimal and the results of the study show there is no indirect profit contribution from sports books to slot machines. Given these results, casino management may want to consider that a sports book is not an optimal use of casino floor space

Simulating the Effect of Pay Table Standard Deviation on Pulls Per Losing Player at the Single-visit Level

While holding par constant, changes in the standard deviation of the pay table produced an inverse effect on pulls per losing player (PPLP), across six different virtual slot machines. This result establishes the standard deviation of a game as a crucial determinant of a slot player\u27s experience. Three different single-trip scenarios were examined via computer simulation, with 50,000 players engaging each game. For example, virtual players began with 100 units, terminating play at bankruptcy or 200 units. As players focus on the outcome of single visits, understanding the determinants of PPLP (or time on device) will help management engineer desirable customer experiences at the trip level. In part, this can be achieved by altering the product mix to better match the expectations of the clientele. Given the remarkable bankruptcy rate of the trip simulations, proxies for value such as PPLP serve as crucial evaluation standards in the satisfaction process

Duct Lifetimes at Mid Latitudes

The power spectrum analysis of the occurrence rate of whistlers observed at Varanasi (geom. lat. 14o 55' N) shows periodicity of the order 70-80 min which has been interpreted as the lifetimes of the ducts trapping and guiding the whistlers. This is also corroborated by the dispersion analysis of the recorded whistlers. The observations clearly favour the existence of large numbers of ducts simultaneously. The analysis shows that these whistlers had propagated in the magnetosphere along higher L-values (L = 2.1-2.7)