Abstract
A direct mail offer, common to the casino industry, is analyzed using performance data obtained from the player database of a Las Vegas Strip hotel casino. These free-play offers, fueled by technological advances in player tracking systems, attempt to encourage repeat patronage by offering cash awards and free room nights. Despite compulsory play requirements, these popular offers fail to generate a statistically significant increase in individual trip slot volume. This result held across two levels of the offer, i.e., both $50 and $100 cash offers. Once offer costs are considered, the free-play campaign is found to produce negative cash flows. Related long-term issues, such as the inducement of increased visitation and polygamous loyalty, are also addressed. These unique results enrich both the casino marketing and direct marketing literature bases. Most importantly, this paper represents the only empirical study of a popular play incentive, increasing its practical value to casino operators.
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