Why do casinos make it so easy to spend so much time taking advantage of their free services and amenities? The obvious answer is always so that you will spend more time gambling but that is not the only reason why casinos love you. There is indeed a psychology behind the operational methods of the gambling industry but one should always remember that consumers have a choice, especially in regions served by many casinos.
The joyous relationship between casino and patron equates to slightly expensive entertainment for most of us. It’s not quite as bad as the naysayers would have us believe but not nearly as good as our hopes and dreams teach us to want it to be. As long as you gamble modestly you can spend a few hours in a casino and lose no more money than you would if you paid for an expensive concert and a nice dinner.
Although the casino’s business is to take your money, it is in the casino’s best interest to not impoverish you. They walk a fine line between providing entertainment and simply making it easy for you to give them your money. It is this customer-focused attitude that has transformed the modern casino into an entertainment venue more than anything else. They have more good reasons to love their customers than the mere fact that we give them money.
Here are a few of the best business case reasons casinos love their customers.
Whether you are on the Las Vegas Strip or driving through Oklahoma where the wind comes sweeping down the plain, the more casinos you see the more choices you have. Casinos don’t compete on price because a $5 slot game costs the same wherever you play it. The casinos compete on ambience, sensation, and quality of service. Although gambling critics argue that giving players more choices is illusory, to the corporations running the casinos greater choice in gambling location means they have to work harder to win your money.
Through the years gambling industry journalists have published articles about “where the loosest slots are” and “which blackjack tables are the best”. These articles usually compare metropolitan markets to metropolitan markets. Should you gamble in Reno or Las Vegas? Is Atlantic City less expensive than Oklahoma City? These are important questions for consumers who are planning their vacations but once you reach your chosen market you’re left to your own resources, or to checking out player reviews on travel sites, to decide which casinos you want to visit.
This is where happy customers come in. When someone posts a review on a travel site saying they had a great time at such-and-such casino, hundreds if not thousands of people will read that review. The casino benefits from increased visibility and heightened player interest. You are more likely to visit a casino where several players claim they had a great time and won money than you are to visit a casino where players complain about never winning.
Casino operators are just like any other businesses when it comes to online reviews: they love happy customers who tell other people about their great experiences. Now some online reviews may seem suspicious but there are several very popular sites where the reviews are written by members whose profiles are easy to check out. These are exactly the kinds of reviews that all businesses want to see.
Not only do happy customers post online reviews about casinos, they tell their friends and family about the casinos where they had good times. And those good times translate into word of mouth referrals that drive millions of visitors to casinos every year.
Word of mouth marketing has been very important to the gambling industry because many jurisdictions around the world regulate or limit the types of promotions casinos may use to market themselves. Even in the online world gambling-specific advertising is limited to certain types of Websites whereas the casinos promote themselves as resort destinations with many entertainment options in general advertising.
Under US law the Federal Communications Commission, guided by two court cases decided in the 1990s, allows the advertising of casinos and state lotteries within the states that allow those forms of gambling. Advertising markets are therefore restricted by geography and local competition squeezes out most out-of-state competition. Hence, word of mouth marketing remains not only viable for most land based casinos but also necessary.
Casinos may not incentivize word of mouth marketing but they definitely love you for spreading the good word about how much you enjoyed your visit.
There are worse jobs to be found than working for a casino. Although the work may seem glamorous to the patrons many casino employees tell stories about rude and insensitive customers and customers who have less than perfect hygiene. But the hours can be long, especially for employees who must stand on their feet.
No matter how good the pay the majority of casino jobs fall into that midrange of moderate pay positions. Regardless of how popular and profitable casinos are they only have to pay as much as they need to in order to hire and retain good employees. Competition for good employees between casinos helps the employees find the best possible jobs but competition for good jobs among workers helps the casinos keep payroll costs under control.
That is where you, the player, come into the picture. Happy players are more likely to tip casino workers, thus increasing those employees’ incomes. The casinos don’t require tipping but they make it easy for you to do so, and in some promotional literature may even explain how best to tip employees. When you tip casino employees you help the casinos keep their payroll costs under control and their employees happy. So why shouldn’t they love you for sharing some of your wins with the employees? The employees are not allowed to gamble where they work.
At some casinos you don’t ever have to gamble in order to have a good time. The competitive nature of the gambling industry has led casinos to invest billions of dollars in theaters, swanky bars, concert venues, and other forms of entertainment to keep the public coming by for more fun and excitement.
As long as you are on the premises and having a good time the casinos will be happy because the more people that potential customers see visiting a casino the more potential customers will choose to gamble there. People are the best people magnet and casino operators know this.
While it’s true everyone loves to have a good time and unwind, the casino business is all about bringing people in to play. When you think about it, the casino doesn’t keep that much money from what the gamblers put into the games. All the prizes are paid out of the bets. The casino keeps a percentage of what is played, the “house edge” as we like to call it, and they pay their costs of operations out of that percentage.
So if the casino’s expected percentage from slot games is about 15% (and this will vary by month and by market), the more slot players they bring in the more money they make. If they need to have 5 people on site just to bring in 1 new gambler the casinos will do whatever they can to get those 5 people on site, even if that means hosting free concerts (which some do).
So the next time you take in the free entertainment at a local casino, don’t allow yourself to feel guilty for not gambling. Your just being there helps the casino look popular and player-friendly and they make sure people see the cars in the parking lot. They also love to show visitors pictures of happy, excited people walking around their venues.
You may complain to the manager of a small casino with a couple hundred slot machines and never see anything change. That may only be because your suggestions or requests are too expensive or impractical for a small operation to implement.
However, the larger casinos do solicit feedback both informally and formally. They are constantly looking for signs of customer stress, satisfaction, and interest in new games and services. You can even find land based casino employees responding to online criticisms and complaints, or compliments, just as you find many other business operators responding to the feedback.
In a competitive industry every business has to grow and respond to its clientele’s needs and interests. Casino employees are human and may not want to be the person you dump on when you are really unhappy but when you bring problems to their attention or make great suggestions they, like any other good business, will try to act on that feedback.
Customer feedback is important to every business. When you operate in a vacuum of feedback you have to make assumptions about what people want, appreciate, and dislike. You only find out too late when the customers stop showing up that they were unhappy with something. Hence, don’t be afraid to leave some feedback with a casino. They may not budget a million dollars to take action right away but someone usually reviews all those comments and looks for the priority issues. Your voice may be small in the crowd but you still play an important part and the casinos love you for sharing the good and the bad in as polite and professional a manner as possible.
When you finally get that jackpot someone may make a comment about how you’re sticking to the man or getting back some of what the casino took from you. Of course, as noted above, the majority of money that casinos handle goes right back to the players. The casino isn’t paying you that $5000 so much as it’s taking the money from other players (or even you) and paying it to you.
Big winners show everyone that casinos are willing to play fairly. Now it’s also true that the larger the win the more likely the casino will perform some due diligence. It’s not only unfair to them to pay a cheater a large jackpot it’s unfair to all the other players who are abiding by the rules.
But by and large casinos love to talk up their big winners because they want their customers to know they have a fair and reasonable chance to win that kind of money (“reasonable” being proportionate to the risks and payback ratios associated with the games). If there were no big winners in a casino who would want to play there? In fact, in the late 1990s one casino in Albuquerque, NM was closed down by its tribal authority after the casino failed to attract enough players to pay a large jackpot.
Big winners translate into free advertising and more word of mouth promotion for casinos. People talk about big winners and naturally the big winners share their stories with friends and family. It’s okay to win big in a casino as long as you do it honestly. They look good in the public eye when they pay out large prizes.
Some people scoff at casinos’ customer loyalty programs. Modern customer tracking systems were first developed in the 1980s and used to build sophisticated loyalty programs through which players can earn free gifts, food, even money to play with. Casinos love it when players sign up for these programs because not only does that mean the players are more likely to keep coming back, it also means the casinos can track the players’ habits and analyze that data.
A casino needs to know how well its players are doing so that it can plan for the future and make adjustments in the ways it does business. But some casino employees also admit openly that the casinos use customer loyalty systems to identify players who win often. They may offer free drinks and other incentives to keep the players spending money so they don’t walk out with all their winnings.
So while casinos do love big winners as noted above, they also love loyal customers who allow the casinos to watch how they play. Who gets to keep the money is a type of cat and mouse game casinos play with their customers. As long as they violate no laws and the customers are happy with the perks they earn the system works well enough. And yet privacy advocates are already raising concerns about how much data the casinos collect about their customers.
The day may come when the casino customer loyalty program operates very differently from the way it operates today. Even so, casinos love their loyal customers.
High rollers usually open lines of credit with casinos but the majority of players bring the cash they gamble with, or withdraw it from ATM machines or through the casino cashiers. By and large any business would prefer to sell its goods and services to customers who pay cash on the barrel. Offering credit is a competitive practice and a very risky one, because the casinos may not be able to collect on the debts that gamblers run up.
Anyone can apply for a line of credit at a casino. If you are turned down it is only because you don’t match the profile of a safe credit risk, not necessarily because they don’t think you will lose so much money. It costs a business to manage an accounts receivable portfolio, especially if it has to take some of those accounts into collection activities.
When you walk into the casino with your bankroll in hand their accounting requirements are very minimal. They do track how much money you play on their games and how much you win but they don’t have to worry about the overhead of helping you get credit or collecting on that debt if you use the line of credit.
You do not have to use your line of credit if you don’t want to. And you can also settle the debt as quickly as possible so you don’t have to worry about carrying a debt balance going forward. But if you can prove the ability to pay it does behoove the casino to offer you a line of credit that you do use and subsequently fail to cover through winnings.
It will be less of a financial burden for you if you just limit your gambling to whatever funds you can carry with you, safely, without digging into the monthly household budget.
It’s true that casinos pay extra special attention to high rollers, gamblers with large lines of credit or who can wire large sums of money to the casinos. These customers, when they are regular players, often lose a lot of money. Some high rollers lose millions of dollars at casinos every year. These are the uber wealthy patrons for whom $2 million is nothing.
Their losses help to make the casinos profitable in more than one way. Not only do straight losses beef up the casinos’ bank accounts, they also improve the casinos’ cash flow. Cash flow is critical to a business that depends on cash and carry customers. Without a constant inflow of money many casinos would go out of business quickly because there are days when they pay more to players than they take in. People would stop playing at a casino that cannot pay its winners.
If casinos earn interest on their bank accounts or invest excess cash derived from what is called “float” they can make even more money. High rollers who lose big help make these kinds of revenue streams possible and worth investing in. “Float” is money that you have temporary control over. The most well known industry that utilizes float is the insurance industry, where customers pay premiums for months or years before they file claims on their policies. Any business model that produces large inflows and outflows of cash may be compatible with float-based investments. Casinos therefore make good candidates for this kind of money management strategy if they can attract enough big losers (preferably high rollers with the ability to pay off large loans).
Some experts in gambling talk a good game but they don’t actually gamble. These may be the people who are trying to get everyone else to stop gambling and so they look for all the flaws in gambling systems and the biases that are built into the games that casinos offer.
The general public understands that the casinos are making money off these games. And yet we go back and gamble year after year after year because we love the challenge. That enjoyment of the challenge is important in the psychology of gambling, just as it is important in the psychology of competitive sports.
Although casinos do not like it when they catch customers counting cards successfully enough to have reversed the house edge, they do appreciate customers who know the games well enough to keep playing them and even to teach other people how to play them. Expert gamblers are great advocates for the gambling industry and gambling as a pastime. The best experts don’t make outrageous promises and they explain in detail how casinos make their money. Nonetheless, a successful casino is most likely to attract a cadre of core “experts” who simply prefer to play there. Those players may recommend their favorite casinos to their audiences, which sometimes run to the thousands of people who buy their books, read their Websites, or see them give presentations.
The expert gambler is more often the casino’s friend and good patron than polite adversary. Expert gamblers like to have fun, too, and they love a good show, good food, and good conversation. Casino operators and employees also appreciate the incidental promotion that expert gamblers provide to their businesses.
While it is popular and easy to portray casinos as money grubbing heartless businesses that prey upon the average consumer, the real story is more complicated than that. Every business that makes a profit can be criticized for something. As long as the customers are treated fairly and understand what they are paying for most businesses play an important role in our society and economy, and that includes casinos, which create jobs, bring additional revenue into local economies, and offer entertainment to local and visiting patrons.
In return for our business the best casinos try to create a great, fun experience for us. Sure, it would be great if everyone could win all the time, but that would hardly feel like a challenge. People enjoy taking risks and casinos offer one of the least physically dangerous ways for people to enjoy risk. The casinos in return appreciate loyal, generous customers who make their business operations successful. There may be billionaire investors who act like they don’t care about your life behind the largest commercial casinos but most North American casinos are operated by Native American tribes who invest their profits in their communities. These casinos help foster better relations all around, and they also help attract interest to Native American interests and issues. There is a lot going on in the relationship between casino and customer, and this fascinating dynamic will be going strong for the foreseeable future.
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