Originally Published:Sunday, October 16, 2011
“Atlantic City’s casinos are being more generous in their customer reinvestment dollars. However, they are forced to do this to remain competitive,” said Harvey Perkins, executive vice president of Spectrum Gaming Group, a New Jersey-based casino consulting firm. “So the cost of getting a customer in 2011 is more expensive than it was in 2010.”
Perkins noted that through the first six months of 2011, it cost casinos 36.6 cents out of every dollar in gaming revenue to comp their customers, compared with 33.6 cents for the same period in 2010. Statistics show that gaming revenue was down 7 percent during that time.
“It’s more, but it’s more in a bad way, because total gaming revenue is declining. The casinos are spending more to get less,” Perkins said of the comps.
Casinos are in a quandary because they risk offending or losing their customers if they scale back the perks to save money. Perkins said customers have developed a sense of “self-entitlement,” viewing comps as an absolute reward for their business.
“There’s an old axiom, which is, ‘What you give a customer today, make sure it doesn’t have a negative effect when you take it away,’” he said.