Do Promotional Allowances Actually Increase Profits for Casinos?

Casinos often give free items to customers to attract new guests to the property or to reward their loyal guests. These free items are classified as promotional allowances or complimentaries. Casino management and marketing personnel believe that these expenses are necessary to maintain customers and to also increase the property\u27s net income. Two OLS regression models are run to determine if promotional allowances do increase earnings before income, taxes and depreciation. The results will help management better understand the effect of offering complimentaries to their customers