To Comp or Not To Comp

          This past week I read a new story about how the Las Vegas Sands was greatly reducing their comps program.  (see:  When I first read the title, I shuddered a bit.  Over the past couple of years while Las Vegas has struggled, I have received numerous e-mails from readers (mostly locals) who have watched their comps all but disappear.  It seemed to be happening yet again!

          Comps are the casinos ‘frequent shopper’ reward program.  Many years ago, if you spent enough hours gambling at a high enough denomination, the casino was eager to throw you a buffet, a room, show tickets or any other freebie that they could.  Back then, it was fairly subjective.  There were no electronic cards to throw into the machines, so most slot and video poker Players were not offered any comps.  At the tables, you’d ask to be rated.  You wouldn’t get a reward you didn’t want.  The pit boss would ask you if you’d like a room for the night.  Or you’d casually mention that you were hungry and he’d hand you a ticket for the buffet.

          The idea was to keep the Player happy and in the casino!  The casinos considered the profit center to be the casino itself.  Most of the rest existed only to serve the Player for the rare times he didn’t want to gamble.  Also, comps were an incredible marketing tool.  You appear to be giving the Player something worth far more than the actual cost.  After all, how much does it REALLY cost to feed one more person at the buffet?  How much does it cost to give two tickets to a show that isn’t sold out?  Most of all, you hand the guy a room with a sign in it that says the suite goes for $500 a night, when in reality that is the rack rate and it hasn’t been rented out at the price EVER, and it was going to be empty that night, anyhow.

          Until the huge boom in Las Vegas of the 1990’s, Las Vegas was known as a place where a relatively low-roller could get comped pretty nicely.  Just being a $5 blackjack Player could get you some free stuff.  Here on the East Coast in places like Atlantic City and Connecticut, $5 won’t even get you a place at the table, with minimums frequently being $15 - $25!  Also, as the technology changed, the whole concept of comps changed as well.  Players were given ‘Player reward’ cards to put into the machines and were awarded points based specifically on how much they played.  These points where then directly translated into casino cash that could be spent for items in the casino – from food to shows to rooms to stuff in the gift shop.  Some casinos went further and started giving ‘cashback’ – they sent actual checks to Players that could be used in the casino for a limited amount of time.  This became a critical part of cultivating regular Players – especially locals who could come back in the timeframe allotted. 

          As we all know, in 2008 the economy collapsed.  Many casinos, looking for ways to cut costs began cutting comps and cashback.  Many Players reacted very negatively to this – which should be no surprise.  Cutting out these items was akin to taking money right out of their pockets.  The buffet comp that cost the casino $5, but was worth $10 to the Player wound up costing many of these casinos far more than the $5.  Local players starting shopping around for better deals.  If Casino A wasn’t going to give them a free meal, maybe Casino B would!  Some of the casinos that catered to locals have been hurt by the economy, but some of it has been their own poor decision making in this regard.  They thought that their Players would stay loyal to them even if they didn’t reciprocate.  They were wrong – very wrong.

          So, that brings me back to the case of the Las Vegas Sands cutting back on its comps.  I think we’d all agree that the Venetian is not really trying to attract the locals.  It is a big beautiful place, but it was built to attract the tourists.  The hotel was not built as a place for the casual Player to crash for a few hours before hitting the tables again.  It was built to be a luxury hotel that people would WANT to stay at so they could say they stayed there.  If giving away rooms for free means that people who are willing to pay don’t have rooms, then reducing these comps makes a bit more sense.  

          As the article did not make it very clear as to exactly what they are reducing - are they all but eliminating a ‘reward’ program for the average Player? – I can’t exactly condone their actions.  At the same time, it’s not in the same category as when one of the off-strip properties catering to locals decides that the couple that plays 2-3 hours most every night will no longer get a free buffet every couple of weeks.

          Tell me what you think!