Freeplay Accounting

Does the casino actually set aside money to pay for freeplay? Or is it just made up to bring in people and they are just taking a Loss?

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Does the casino actually set aside money to pay for freeplay? Or is it just made up to bring in people and they are just taking a Loss?
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I am not 100% certain. It's possible it depends on gambling regulations in a particular market.

For example I know in NYS racinos, the amount of freeplay allowed to be handed out is dictated by gambling regulations. That However may be because the freeplay is handed out by the NYS lottery and not the actual casino.

BTW, the gambling regs for the racinos don't actually prohibit the casino from handing out more than the max cap but that the overage has to be strictly laid out in reporting requirements and is on The casinos dime.

I would hazard a guess that the racinos all make certain to land inside the target range rather than lay cash out their own pocket.

Freeplay money won at NYS racinos is reimbursed by the lottery.

That doesn't answer your question directly about regular casinos but it may give some insight into how freeplay accounting works.

I think most casinos budget an amount through the player marketing department. That is what we did. We would budget an amount, for example maybe $100,000 a month and then divide that up based on play criteria.

The interesting part to me was always how the casinos tried to determine the cost of the freeplay to them. Everybody seemed to use a different method and I never saw one that I agreed with.