The Impact of Free-Play: A Longitudinal Study of Trip-Level Visitation and Wagering Behavior

Abstract

The aim of this study was to understand the impacts of changes in free-play (FP) award values on visitation frequency and gaming revenue. With costly and perpetual FP campaigns well established in many markets, a critical issue for operators centers on the potential consequences of walking back offer values, especially when nearby competitors do not. The results of experimentally manipulated FP offers suggested that widely held industry beliefs about their ability to influence visitation are equivocal. Additional outcomes related to the economic impact of FP awards across the experimental groups also questioned the sensitivity of loyalty club members to reductions in FP offers. Working from a common offer tier of 600 loyalty club members, subjects were randomly assigned to one of six groups, each comprised of 100 subjects. Daily group-level outcomes were produced by aggregating player performance data over a 191-day sample period, collected from the records of a tribal casino operating in a competitive repeater market. This longitudinal design allowed for the measurement of multiple levels of FP offers on visitation behavior and gaming value, over a meaningful duration. Our findings fill gaps in the literature related to the impacts of FP on visitation frequency and the ability to drive own-money wagering. Our results also add to literature within the domains of operant conditioning, goal gradient theory, and a growing stream of research on FP efficacy. There are also connections to the house money effect, reverse house money effect, and the endowment effect.