Evaluating the Impact of a New Casino Loyalty Program on Gaming Volume

Using two years secondary data gathered from a Las Vegas hotel and casino, the effectiveness of a new casino loyalty program is examined on both daily slot coin-in and table game drop. Based on a theoretical model advanced to estimate the effects of a new loyalty program, simultaneous multiple regression analysis with Autoregressive Moving Average (ARMA) terms is used to analyze the data. The results indicate that the loyalty variable significantly increases slot coin-in at a rate of $302,455 per day, while table game drop is not significantly affected by the introduction of the new loyalty program. The coin-in increase of $302,455 also can be converted to $9,366.43 in estimated slot profit per day on days with the new loyalty program. Additionally, the variables representing special event days, such as table game, poker and slot tournaments, are found to have positive and significant relationships with either table game drop or slot coin-in. This study is the first attempt to estimate the gaming contributions of a loyalty program on casino\u27s profitability. With the findings and model developed in this study, operators can examine whether loyalty programs produce sufficient returns on investment. Furthermore, this study adds a valuable piece to the limited literature base associated with the effects of loyalty programs on gaming business volumes or profitability