Free slot play costing casinos $37B in annual lost profits, according to Acres study

Free slot play costs casinos $37 billion in annual lost profits, according to a new study released by casino loyalty and technology developer Acres Manufacturing Company. The new position paper is part of Acres' ongoing series exploring "the expensive realities of current casino loyalty technology."

The paper claims there is a $37 billion annual impact player from loyalty reinvestment on casinos’ profitability as a result of "existing, antiquated legacy Casino Management System technologies."

"With 166 patents issued and hundreds more pending, Acres created its Foundation hardware and Foundation HQ CMS specifically to address this opportunity," says the company. The new position paper, informed by a survey of nearly 200 U.S. casinos, is available here alongside earlier installments analyzing the state of current CMS offerings.

Key highlights of Acres’ CMS loyalty program reinvestment position paper include:

• The casino survey found that many loyalty programs provide player reinvestment rates "approaching or even exceeding" 100% when exploited optimally, only maintaining profitability through breakage caused by unredeemed rewards or players that do not take full advantage of the program
• Casinos’ net reinvestment in player loyalty conservatively hovers above 35% – or roughly $25 billion – with free play being the largest single-cost contributor
• Free play takes up a significant portion of available play time, "eviscerating profitability on novice or time-limited players"
• Including the time value of free play, net reinvestment balloons to over 50%, or more than $37 billion
• If free play was eliminated without an impact on loyalty, profitability of slot machine operations would more than double 

“The casino industry’s continued reliance on free play to incentivize player loyalty is impacting industry slot profitability by more than $37 billion every year, with smaller casinos typically bearing a larger relative percentage of this impact. The industry’s strategy of using free play to buy loyalty is completely misaligned with player preferences, as the potential to win is what truly drives loyalty, not free play,” said Acres Manufacturing Company's Noah Acres.

"By leveraging our Foundation HQ CMS to replace free play with a gamified loyalty experience delivered in real-time as players spend their own money, casinos can exponentially grow revenues and profitability by modernizing their loyalty programs to eliminate massively scale and entertain new players rather than giving away expensive and underappreciated free play entitlements."

Acres notes that as the company's series of position papers highlights, Foundation HQ’s modern technology "can empower casino operators of all sizes to significantly increase revenue and lower costs" by helping to scale enrollment and rethink player reinvestment strategies, thereby making player loyalty "significantly more profitable."  

Acres will highlight the capabilities of its Foundation HQ CMS technology at the 23rd annual Global Gaming Expo, to be held October 10-13, 2023, at the Venetian Expo in Las Vegas (Booth #4211).

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