Casino comps harder to come by - Tuesday 3rd of March 2009

With the recession eating away at profits, casinos cut back in 2008 on the free hotel rooms and other promotional giveaways they use to lure customers to the gaming floor.

Promotional expenses — the gaming industry’s so-called “comps” — dipped nearly 5 percent to $1.55 billion compared to $1.63 billion in 2007, according to year-end figures released Thursday by the New Jersey Casino Control Commission.

It was the second straight year promotional spending fell — not surprising, since casino revenue declined in 2007 and 2008 due to the faltering economy and extra competition from slot parlors in surrounding states.

The downward trend has continued into 2009. January’s promotional spending declined 3.2 percent, to $115.4 million, compared to the same period in 2008, figures show.

Spending was down at seven of the 11 casinos last month. Borgata Hotel Casino & Spa, Trump Taj Mahal Casino Resort, Harrah’s Resort and the Atlantic City Hilton Casino Resort increased their promotional expenses.

While the figures are down overall, one gaming analyst blamed the drop in promotional spending on lower business volumes, not a conscious decision by casinos to suddenly get cheaper with giveaways.

“Lower volume results in lower complimentary levels,” said Harvey Perkins, senior vice president of Spectrum Gaming Group, a casino consulting firm based in Linwood. “This may not be a conscious effort. This is a natural mathematical occurrence.”

Comps include such things as hotel rooms, meals, travel, entertainment, cash and slot machine credits that are given to customers free of charge or at discounted prices. Casinos shower their high rollers with penthouse suites and other lavish gifts but also spread the freebies around with lower-end gamblers to gain their loyalty.

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