Simply, a machine’s payback is the amount a machine will return to the player over the life of the machine, calculated a

28.08.2009, All right, the country’s in a recession and the economy is in a funk. Tourism to Las Vegas has dropped off, as has the convention business, and those who come here spend less money.

by David Stratton gamingtoday.com

But that’s not the entire story.

The satisfaction of casino customers has reached an all-time low, and, according to experts, this is mostly the result of "short-sighted" policies and campaigns implemented by casino operators.

The notion of shrinking visitor satisfaction isn’t a new one. A year ago, the Las Vegas Convention & Visitors Authority (LVCVA) reported in its annual Visitor Profile study that visitor satisfaction had reached an all-time low.

Earlier this year, the Vega$AT Index Survey conducted by Clear Seas Research revealed that visitors rated their satisfaction level as "mediocre at best," while foreign visitors to Las Vegas were actually less satisfied than their domestic counterparts.

Most recently, at last month’s Casino Marketing Conference in Las Vegas, Gaming Strategies + Insights released survey results that suggest even Las Vegas "locals" are losing interest in their neighborhood casinos.

Specifically, Las Vegas locals in the past 18 months have cut in half their average number of trips to their neighborhood casinos, according to Glenn Goulet of Gaming Strategies.

And the reason isn’t just economics. About 44 percent of players said they have the same gaming budget as a year ago, a number that was down just 3 percent.

In addition, only 43 percent said their gaming budget was less, just 5 percent more than a year ago.

What was probably the most telling – and the most troubling – result of the Gaming Strategies poll was the answer to the question of "how fairly" the player felt he was treated in the casino.

About 69 percent of respondents said they were treated fairly, a startling drop-off from the 88 percent who responded positively a year ago.

While many of the survey results were disappointing, especially for casino operators, some of the reasons for the poll results should be even more disconcerting.

The casinos themselves have exacerbated the problems of the recession by implementing campaigns and policies that actually deter business, frustrate patrons and drive customers away.

"Casinos are far more interested in getting the money as quickly as possible, to satisfy Wall Street projections or make interest payments on overvalued loans," said Michael Meczka, president of Los Angeles-based MM/R/C Inc. and a 30-year member of the American Marketing Association. "Casinos no longer care about providing a great time, every time."

In his presentation at last month’s Casino Marketing Conference, Meczka said that today’s casino marketers are constantly asking each other, "How can we extract more revenue from our customers?" rather than the questions they should be asking: "How can we provide service?" or "How can we give our customers what they expect?"

Meczka said the casinos’ "short sighted" solutions to the burning desire of getting deeper into the customer’s pocket include the following:

• Reduce playing time by speeding up the games (electronic and table)

• Increase the number of coins required to play

• Remove the popular 3 and 5 coin max games

• Eliminate the slot machine’s "arm" and replace with a button (increased speed, less playing time)

• Shorten the video reel spin cycle to reduce playing time

• Increase the hold percentage by 1 percent, which decreases the playing time by 17.5 percent

• Use table games with high holds and multiple side bets, as well as the lowest pay tables in order to force players to lose quicker and more often.

Meczka said the "short sighted" result the casinos are seeking is to "get the money fast … and get the player out of here."

The "success" of these policies, however, will eventually doom the casinos, Meczka said. "Ultimately, customers will have less satisfaction with the casino experience," he said, adding that customers will eventually reduce their frequency of visits, cut back on the amount spent and, eventually, stop coming to the casino altogether.

Next week, we’ll examine some of the specific measures successful marketers are using to generate new business and retain existing customers, as well as some of the marketing and advertising campaigns that have actually worked during the current recession.

Question? Comment? E-mail me at: David Stratton

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