Slot machine players are among the most valuable players in today’s casinos, both online and offline. Casinos know it, too. They reward slot players with cash back or free play along with meals, free or discounted rooms and other comps.
In fact, modern player rewards systems that track how much you play evolved from the “slot clubs” that sprang up in the early 1980s, starting with the 24K Club at the Golden Nugget in Atlantic City.
Casinos had been comping table players for decades, relying on the pit crew to estimate how much a customer was playing. That’s not practical on slots, with many more players, so the Golden Nugget introduced a loyalty card.
The amount of information gathered, sophistication of player ratings systems and diversity of comps has been growing ever since. Video poker players are valuable, too, but they receive much less in casino comps than slot players.
It’s common for rating systems to award slot players twice as many points per dollars played than video poker players, meaning slot players accumulate comps twice as fast. In some casinos, the difference is even greater – up to 10 times the comps for slot vs. video poker players. And some casinos don’t award comps at all on the highest-paying video poker games.
That didn’t used to be the case. In the early days of player rewards for electronic games, video poker players earned points and comps at the same rate as slot players.
Why the change?
It has to do with the relative payback percentage of slot and video poker games and the amount of profit the players are expected to generate for the casino.
Let’s do a little arithmetic.
Assume one player is playing 9-6 Double Double Bonus Poker, which returns 99 percent with expert play, betting $1.25 per hand – five coins per hand on a 25-cent machine.
Now assume another player is betting 3 cents per line on a 40-line, 1-cent video slot returning 90 percent to players. That’s $1.20 per hand – just to put two players on about the same betting track at a realistic level.
If each makes 500 players per hour, then the video poker player bets $625 per hour and the slot player bets $600.
What are the average losses?
With a 99 percent return, the video poker player’s average loss is $6.25 per hour. There’ll be winning sessions, even big wins when a royal flush or four Aces with a low-card kicker turn up, and there’ll be sessions with bigger losses, but the average will be $6.25.
The penny slot player getting a 90-percent return sees an average loss of $60 per hour. There are winning sessions on the slots, too, with the occasional jackpot, but the average loss given a nearly equivalent amount of play is nearly 10 times that of the video poker player.
There’s much greater incentive for the casino to tempt the slot player into coming back, so the slot player gets more in player rewards.
Given this explanation, one slot player replied, “But I DON’T bet that much on penny slots. I bet one coin per line. So my bets are only a third of those my husband makes on video poker, but I still get more comps than he does. I’m not complaining, but he sometimes gets a little confounded by it all.”
Let’s run the numbers for slots again, but this time with 1-cent per line bet on a 40-line slot at 500 spins per hour.
Now the total wager is only $200 per hour, but with a 90-percent payback, the average loss is $20 per hour. That’s still more than three times as high as the $6.25 per house loss for a 9-6 Double Double Bonus Poker player betting $625 per hour.
Casinos sometimes offer multiple point days and those can not only boost your comps, they can boost the effective payback of the game you play.
If applied equally to video poker and slots, those multi-point days sometimes could turn some video poker games profitable for players, but can’t do the same on the slots. For many years, video poker zeroed in on multiple-points days to gain an advantage.
That’s led casinos not only to accumulate comps at different rates for slot and video poker play, but to offer different multiples on points.
Let’s create an example of how that can work. Assume a player rewards club is set up so you’re given one point for every $4 in play, and for every 100 points you accumulate, you can redeem for $1. That means $400 in play brings $1 in cash or free play, so you’re getting back 0.25 percent of your bets.
Normally, that would increase the effective payback percentage of 9-6 Double Double Bonus Poker to 99.25 percent – a thinner shave than the casino really likes. The effective rate on a 90-percent penny slot would rise only to 90.25 percent. That’s well worth it to the casino to raise a little goodwill.
What if the casino was having a 5x points day, where you were given points at five times the normal rate.
That would raise the effective payback on the slot for that day to 91.25 percent. Casino operators still get a healthy profit, and the promotional value can generate enough extra play that the casino makes more money overall than on single-points days.
Even on higher-paying slots returning 95 percent and some do online or on dollar level offline, the effective return of 96.25 percent with 5x points still generates profit for the casino.
But on 9-6 Double Double Bonus Poker, those 5x points on a club that normally returns 0.25 percent turn a 99 percent return into a 100.25-percent profit opportunity for players.
On video poker games with higher paybacks the profit opportunity would be even greater as 9-6 Jacks or Better would jump from 99.5 percent to 100.75 or Not So Ugly Deuces Wild from 99.7 to 100.95.
So casinos adjust rewards on a couple of fronts. It might require $8 in play instead of $4 to earn a point on video poker, reducing the basic club return from 0.25 percent to 0.125 percent. It might limit multiple points days to 2x or 3x on video poker while offering higher multipliers on the slots. And it might offer greatly reduced or no comps on video poker games paying 99 percent or more.
By doing that, the operators assure themselves that the greatest rewards will go to the players who generate the most profit for the casino: The slot players. And it prevents turning marginally profitable video poker games into losing propositions for the operator.
From an operator’s perspective, that’s how it must be, with more comps to slot players than video poker players because they are more valuable to the casino.