The effect FreePlay has on a machines coin-in/hold%
Any Ideas?
Apologies to the rest of the forum if I'm out of line here, but I handle issues like this for a living. PM me if you want to talk in more detail and I'll introduce myself properly.
From the point of view of the slot department, $20 free play loaded into the machine by a customer should be treated EXACTLY the same as a $20 bill loaded into the machine by that same customer. In each case, something of value is exchanged for $20 worth of machine credits.
The casino marketing department should consider free play (that is actually used) to be a straight marketing expense that is equivalent to the face value of the free play. The casnio then recaptures some of that value when the patron actually uses it; in the same way that a $20 bill run through a slot machine that returns 90% turns into $2 for the casino and $18 for the player, $20 in free play transforms into $18 for the player and $2 for the casino.
If you treat free play as equivalent to other forms of coin-in, then your hold figures won't be distorted. if you do interdepartmental bookkeeping, then free play is debited as a promotional expense, and the offsetting credit is to the slot department as coin-in. That will create the accurate assessment that the excess coin-out is equated to promotional expense. It's not unlike the portion of the bar tab that goes to comped drinks; if F&B didn't record this as a promotional expense, the profit figures for that department would be distorted.
1. Money in.
2. Money out.
3. Total amount bet.
4. Total amount won.
5. Return percentage.
6. Free play given out.
Quote: WizardIt would help if we had some numbers, for the sake of example, to chew on. For example, what of these can you tell us:
1. Money in.
2. Money out.
3. Total amount bet.
4. Total amount won.
5. Return percentage.
6. Free play given out.
Here are some numbers from one section of our casino ( it had a bad day for us good for the players LOL)
the section holds 340 machines..video reels , video poker , stepper reel games, mult-game ( IGT's Game King)
The denominations run from Penny to 5 Dollar...
Coin -In 419,510.13
Gross Drop 136,716.36
Attendant paid out/Voucher out 131,423.14
Net Win 5,293.22
PBT ( FreePlay) used 8,671
Statistical Net win ( net win + PBT used) 13,964.22
Actual Hold% ( It uses statisitcal net win divided by Coin-In) 3.32%
Par 5.50%
As you can see if we had held par the net win would of been 23,073
I just wonder how much that 8,671 in PBT used effected the coin in...
If you play the freeplay to the end..(i.e. downloading 20$ in PBT and playing it to zero) on say a penny video reel that has a 9% hold pct. how much coin-in does that generate?
The Marketing Department with its hosts and mailers is the one that cares about the FreePlay. Its like those old jukebox quarters with nail polish on them: they are "bar quarters" used to get the evening started to to comp a good drinker to some music, they are not income to the juke box. If an actual twenty dollar bill had been given to a player, would the casino book it as two dollars? Its a marketing expense, just as a bus charter to bring the gambler to the casino.
Why are the slot figures being adjusted for the free play but not for the bus charter?
Quote: FleaStiffI would admit that the Slot Department doesn't much care about anything except the twenty dollar bill being inserted into the machine. If the person earned the bill, stole it, found it, was given it as a gift or whatever, its just twenty dollars into the machine, that is all it is.
The Marketing Department with its hosts and mailers is the one that cares about the FreePlay. Its like those old jukebox quarters with nail polish on them: they are "bar quarters" used to get the evening started to to comp a good drinker to some music, they are not income to the juke box. If an actual twenty dollar bill had been given to a player, would the casino book it as two dollars? Its a marketing expense, just as a bus charter to bring the gambler to the casino.
Why are the slot figures being adjusted for the free play but not for the bus charter?
I agree it is a marketing expense ..It's given to a player to get them into the casino,,hoping they spend more than the say.. $20 in FreePlay they have been given.
What I need is some math to figure out how that "invisible" 20$ ( The machine sees freeplay as $$ put into the machine does'nt know it really was'nt a "real $20 bill)
affects the coin-in..and hold% ...and the eventual "win" for that machine. I report to the GM and trying to explain to him why the Hold % & win per day is down is getting trying.
Quote: pacman720
Coin -In 419,510.13
Gross Drop 136,716.36
Attendant paid out/Voucher out 131,423.14
Net Win 5,293.22
PBT ( FreePlay) used 8,671
Statistical Net win ( net win + PBT used) 13,964.22
Actual Hold% ( It uses statisitcal net win divided by Coin-In) 3.32%
Par 5.50%
What is the difference between the coin-in and the gross drop? In other words, what does each term mean?
Quote: WizardWhat is the difference between the coin-in and the gross drop? In other words, what does each term mean?
Coin-in, a.k.a. total handle, is the reported meter values across all machines. Coin-out is not reported, but you can calculate it as coin-in - net win = 414216.91.
Gross drop = cash + vouchers in.
Gross drop - (cash/voucher out) also equals net win, which you can see from lines 2-4.
Quote: pacman720Here are some numbers from one section of our casino ( it had a bad day for us good for the players LOL)
the section holds 340 machines..video reels , video poker , stepper reel games, mult-game ( IGT's Game King)
The denominations run from Penny to 5 Dollar...
Coin -In 419,510.13
Gross Drop 136,716.36
Attendant paid out/Voucher out 131,423.14
Net Win 5,293.22
PBT ( FreePlay) used 8,671
Statistical Net win ( net win + PBT used) 13,964.22
Actual Hold% ( It uses statisitcal net win divided by Coin-In) 3.32%
Par 5.50%
As you can see if we had held par the net win would of been 23,073
I just wonder how much that 8,671 in PBT used effected the coin in...
If you play the freeplay to the end..(i.e. downloading 20$ in PBT and playing it to zero) on say a penny video reel that has a 9% hold pct. how much coin-in does that generate?
Presumably PBT vouchers or meter-credits aren't distinguished in your aggregates above from cashless vouchers or cash. So if Gross Drop includes PBT, then PBT/Drop = 6.34%. 6.34% * coin-in = 26606.71. In other words, if you assume equal playthrough rates on cash, vouchers, and PBT (which may not be the case, but your back-office system should be able to give you actual numbers) then the 8,671 in PBT generates 26,606 in coin in.
I don't think your statistical net win figure is the right thing to use. Actual hold should just be net win / coin in, but I'm assuming drop includes PBT already and therefore net win already accounts for the results of any PBT play. That would put the actual hold% for the day at 1.26%, so you're right - you had a bad day by about 18k.
This is OASIS, right? I'm pretty sure OASIS lets you break things down in more detail than just the aggregate numbers, but I'd have to look at your reports to see. Again, send me a private message if you want to talk in more details.
Quote: MathExtremistPresumably PBT vouchers or meter-credits aren't distinguished in your aggregates above from cashless vouchers or cash. So if Gross Drop includes PBT, then PBT/Drop = 6.34%. 6.34% * coin-in = 26606.71. In other words, if you assume equal playthrough rates on cash, vouchers, and PBT (which may not be the case, but your back-office system should be able to give you actual numbers) then the 8,671 in PBT generates 26,606 in coin in.
I don't think your statistical net win figure is the right thing to use. Actual hold should just be net win / coin in, but I'm assuming drop includes PBT already and therefore net win already accounts for the results of any PBT play. That would put the actual hold% for the day at 1.26%, so you're right - you had a bad day by about 18k.
This is OASIS, right? I'm pretty sure OASIS lets you break things down in more detail than just the aggregate numbers, but I'd have to look at your reports to see. Again, send me a private message if you want to talk in more details.
I myself do calculate the REAL hold % by dividing coin-in by the net win...
We dont use PBT vouchers ..it's put onto their Players Card Account and the download it to whatever machine they want to play..but if they download 20$ in PBT the machines meters and the Oasis System sees it as a 20$ bill..which we know isnt in the validator box.
The gross drop doesnt include the PBT,,,it's just the physical bills and slot tickets taken from the validator drop boxes...
Can you PM me...somehow I cant seem to figure out how to use PM's on this board.
Quote: WizardWhat is the difference between the coin-in and the gross drop? In other words, what does each term mean?
Coin -in is the actual play on the machines..
Gross Drop is the actual slot tickets and cash removed from the drop boxes on each machine.
Quote: pacman720
Can you PM me...somehow I cant seem to figure out how to use PM's on this board.
PM sent. Right now, you have to click PM at the top and then manually type in the addressee's handle.
Two UI/admin suggestions for making PMs easier:
1) Add a "PM author" button to the bottom of each post, next to reply/quote/flag.
2) Add a "PM this user" button to each user's profile.
Are you trying to determine how much the coin-in is artificially inflated by PBT play? If so then I think the closest you can come is just a ratio of PBT "drop" to adjusted (gross+pbt) drop.
For the figures you provided, 136,716 gross drop + $8,671 PBT = $145,387 adjusted drop. The PBT is 5.96% of the adjusted drop. Since your coin in was 419,510 I think you can legitimately contribute 5.96% (or 25,002 of coin in) of this to PBT play.
The reason I think this is the closest you can come is that there is NO way to distinguish PBT play and results from cash play on Oasis.
Mark
| Item | Amount |
|---|---|
| Expected rollover on free play | 3 |
| Expected house edge | 5.500% |
| Expected win on free play | 1430.72 |
| Net cost of free play | 7240.29 |
| Adj. money out | 124182.86 |
| Adj. money bet | 393497.13 |
| Adj. net win | 12533.51 |
| Adj. hold % | 3.185% |
What I think is important is that marketing get charged 83.5% of the free play given out. I get that figure from assuming a 3x rollover, and a 5.5% theoretical house edge.
Again, I would confer with MathExtremist. He knows this kind of accounting better than I do. This is the first time I've ever dabbled in it.
Just to clarify things, by saying "83.5 percent of the free play given out" what you really mean is 83.5 percent of the free play that is actually activated by the recipient and utilized in the slot machine.Quote: WizardWhat I think is important is that marketing get charged 83.5% of the free play given out. I get that figure from assuming a 3x rollover, and a 5.5% theoretical house edge.
I've several times received promotional mailings or promotional emails wherein the casino informs me that some amount of free play has already been added to my card account. That doesn't mean I intend to go to the casino and actually utilize it.
Quote: FleaStiffJust to clarify things, by saying "83.5 percent of the free play given out" what you really mean is 83.5 percent of the free play that is actually activated by the recipient and utilized in the slot machine.
I've several times received promotional mailings or promotional emails wherein the casino informs me that some amount of free play has already been added to my card account. That doesn't mean I intend to go to the casino and actually utilize it.
No. I mean 83.5% of the free play actually used. Unused free play can be ignored.
Quote: WizardNo. I mean 83.5% of the free play actually used. Unused free play can be ignored.
Depending upon the amount of free play that is out there, but unused, you need to account for this as a future liability on your balance sheet.
As an extreme example, suppose you sent $1,000 in free play to each of your 1,000 largest slot players. That's a $1 million unrealized liability that needs to be accounted for somplace. If you just ignore it, you may be in for an unpleasant surprise one day. It's probably ok to recognize it as the theoretical value of the free play, and not the actual free play (e.g. $835K vs. $1 million).
Quote: WizardI estimate that free play will get rolled over 3 times. I get this from the ratio of money bet to coin in, which is actually 2.89, but I rounded up.
What values did you use for money bet and coin in here? Money bet is coin in, unless you are using the terminology differently.
Mark
Quote: pacman720Here are some numbers from one section of our casino ( it had a bad day for us good for the players LOL)
the section holds 340 machines..video reels , video poker , stepper reel games, mult-game ( IGT's Game King)
The denominations run from Penny to 5 Dollar...
Coin -In 419,510.13
Gross Drop 136,716.36
Attendant paid out/Voucher out 131,423.14
Net Win 5,293.22
PBT ( FreePlay) used 8,671
Statistical Net win ( net win + PBT used) 13,964.22
Actual Hold% ( It uses statisitcal net win divided by Coin-In) 3.32%
Par 5.50%
As you can see if we had held par the net win would of been 23,073
I just wonder how much that 8,671 in PBT used effected the coin in...
If you play the freeplay to the end..(i.e. downloading 20$ in PBT and playing it to zero) on say a penny video reel that has a 9% hold pct. how much coin-in does that generate?
First of all, a little disclosure: I've spend about 25 years in table games, so slots isn't my bag. However, I work with a lot of slot guys and they've come to me with this problem before.
The thing about "free play" on slots is that its cost can be pretty close to full value, or even more if your casino is busy and you include the oportunity cost of the occupied seat.
To use a table game example, lets look at the cost of a bet on roulette. The value of a $1 on a single number is Bet*Return*Pw + Bet*Loss*Pl ($1 * 35 * 1/38 + $1 * -1 * 37/38 = 0.0526).
In table games we have something called match play coupons where the player must post a wager equal to the coupon. If he wins, the player is paid for both the actual bet and the coupon value. If we look at the value of the coupon without considering the matched bet, then the equation for the value of the coupon is simply Bet*Return*Pw ($1*35*1/38 =0.921). In the slot world they make so much money that if this were a Free Play they would also take your coupon and turn it into real money!! How generous those slot people are! The value of the Roulette bet Free Play is now $1*36*1/38 = 0.947.
All but one wager on a 00 roulette table has the same house edge of 5.26%. A single number and Even bet have this same edge. But if we were to apply the Free Play to the Even Bet we go from 0.47 to 0.947 if the original Free Play is turned into cash. As a player I like that, but as a casino guy I wouldn't advise on it.
For a slot machine with multiple payouts, I assume the return would be the sum of all Bet*(Return*Pw+Pw) for each possible payout (exclude the loss). The cost should simple be 1 - PAR. PAR sheets typically calculate a little different that I've shown in the Roulette example, so remember that this calculation assumes only gained credits, not the ones you get back (e.g. 800 credit retun on a par sheet, is actually a gain of 799).
In any case, the cost is usully close to full value of the Free Play. In your case, the performance was not that much off: FreePay * (1-PAR) / Coin-In = 1.95%. The adjusted PAR is 5.5% - 1.95% = 3.55%. Your Markeing Dept. should be on the hook for $8,194 or 1.95%.
IMO, if the marketing department gives away $100,000 in free play it all gets downloaded and used I'd say the charge to the marketing department is zero. The cost to the casino is zero (unless it's used in a net win tax calculation). While the free play certainly erodes the hold percentage of the slots it should only increase the casino's actual win. Certainly free play is not given out to replace money that would normally come out of a customer's pocket. If a player normally plays $100 of their own cash and you give them $25 in free play they are not going to play $75 of their own money and $25 in free play. They are going to play the $100 out of their pocket and your $25 free play. In addition the hope is that you have got another trip out of the customer either because the free play offer was strong enough to move them or they end up frequenting your casino instead of another one because they feel they are getting more play value for their money.
Mark
Quote: marksolbergIf a player normally plays $100 of their own cash and you give them $25 in free play they are not going to play $75 of their own money and $25 in free play. They are going to play the $100 out of their pocket and your $25 free play. In addition the hope is that you have got another trip out of the customer either because the free play offer was strong enough to move them or they end up frequenting your casino instead of another one because they feel they are getting more play value for their money.
Mark
I think this would be true if every player played for an infinite (or relatively long) period of time and played only on machines that would otherwise be unoccupied. The hold in that casino would be 100%. I think the closer a casino operates to capacity, the more free play hurts that casino. Players that win large jackpots will not stay until their bankrolls are depleted, nor will those that have played long enough or have won what they deem to be a sufficient amount.
I don't think there is any value in determining what the effect is on the coin-in, because it would vary too much when looking at short time periods. The only thing to do is to figure out how much the cost of the free play is and the % it represent of the PAR %. Make the adjustment and compare the win% to that total. Typical game vlititlity should still be there, but at least you are comparing apples to apples.
It is a Loyalty based promotion...get the customer to make one more discretionary visit to my casino instead of another one that they may frequent.
It really hit home this weekend when a player came up to me and told me that she had hit $5,000 ..just using the FreePlay she'd had been given.
I really do'nt think there is a concrete formula to realize eaxctly how freeplay impacts the coin-in and such...
I still am going to search for the elusive "Holy Grail" of Slot Directors...lol
Quote: pacman720I thank everyone who has replied to my original post...as stated I'm not looking to "charge back" Marketing for the FreePlay used...I just want to make the Marketing Director realize what the effect all the FreePlay has on my machines coin-in and hold% and therefore Win per Unit ..( which is all the GM really cares about) .l
If you're looking for actual results (vs. theoretical numbers) then you need actual FreePlay statistics first. If you can't get those from your accounting system then you'll have to settle for estimation and averages by using numbers like expected PAR and average playthrough (turnover) ratio.
To me, the easiest way to get the GM numbers he'd want is to compare your win/day before you started the promotion vs. during. Did it go up or down when you gave the players FreePlay? Just skip the analysis of coin-in and hold%, and jump straight to the goal which is to review how win/day moves under marketing promotions. Win/day is the actual number you're tracking anyway. Hold% is a derivative of that number -- not the other way around.
I know someone who was recently cut off by her favorite casino and no longer gets free rooms, free meals or free play on the slots. I understand casinos do have to cut costs from time to time. I do know that she had not gone gambling for awhile, but she has now resumed her slot machine play and the casino having been so cheap has lost her play. So its not just the cost of providing FreePlay but the cost of NOT providing FreePlay. Not providing it surely affects your coin in and hold figures. Nothing affects a casino's bottom line more than a player who will no longer set foot in the place!Quote: pacman720...I just want to make the Marketing Director realize what the effect all the FreePlay has on my machines coin-in and hold% and therefore Win per Unit ..( which is all the GM really cares about)
Quote: MathExtremistTo me, the easiest way to get the GM numbers he'd want is to compare your win/day before you started the promotion vs. during. Did it go up or down when you gave the players FreePlay? Just skip the analysis of coin-in and hold%, and jump straight to the goal which is to review how win/day moves under marketing promotions. Win/day is the actual number you're tracking anyway. Hold% is a derivative of that number -- not the other way around.
Trouble is we Direct Mail FreePlay to Players every month based on Play in the previous 3 Month Period...so It's kind of hard to track that as they can use the FreePlay Monday-Thursday on any given week during that month. On top of that the Marketing Department uses FreePlay in some of their monthly and weekly promotions (i.e. Monday Night Football Promo)...all this on top of they earn Freeplay points they can redeem at the machine ( instead of cash-back) ...so as you see there are numerous ways to recieve or earn FreePlay..thus making each one difficult to track the results.
Hmm...I'm not sure I agree with this. If she hit the jackpot on her quarter instead of yours would it really have made a difference? Either way, she has probably played enough to be in the red even with the jackpot. I know when I hit a royal flush using freeplay it was just as if I had been playing my own money.Quote: pacman720
It really hit home this weekend when a player came up to me and told me that she had hit $5,000 ..just using the FreePlay she'd had been given.
Besides, aren't you guys supposed to love winners? :)
no winners=no players
Quote: FleaStiffI know someone who was recently cut off by her favorite casino and no longer gets free rooms, free meals or free play on the slots. I understand casinos do have to cut costs from time to time. I do know that she had not gone gambling for awhile, but she has now resumed her slot machine play and the casino having been so cheap has lost her play. So its not just the cost of providing FreePlay but the cost of NOT providing FreePlay. Not providing it surely affects your coin in and hold figures. Nothing affects a casino's bottom line more than a player who will no longer set foot in the place!
There's another perspective on this--Stations in Vegas used to award fairly generous free play to "frequent flyer" locals---I got $30-50 a week for my .25 and $1 video poker action. It amounted to a good 1% or more rebate at times. I talked to one of the slot managers at Green Valley Ranch and he said that they consistently recovered over 90% of the free play that actually got run through the machines. I was amazed when he said this, but then I started observing how people used that free play. First of all, most of them used it on slots--even though there were plenty of excellent video poker games available--and they used it playing high denominations, or a large amount of lines, so that the free play was burned through in a couple of dozen spins (or less). Then, if they had any credits won, they would cycle those through the machines, too. And since they were playing slots, just about everybody lost. I was amazed at this, as I had a totally different mindset--I would take the family along, tell them to grab a table in the restaurant, and run the free play through a VP machine ONCE, with the goal of cashing out as close to the free play amount as I could manage, then spending the money on a buffet or coffee shop meal for the clan. (What I found kind of ironic was that I won far in excess of expectation, including three quarter royals in the space of a month, all with five minutes' worth of play at a time.)
So the bean-counters bemoan the "cost" of free play, but it really turns out to be an extremely cheap loss leader. And of course, also to be factored in are the people who come down to use their free play, lose it all, and then KEEP PLAYING. If any one such person goes to the casino because of the free play, when they otherwise would not have, that's a HUGE gain for the casino. If the Vegas casinos would resume giving out generous free play, whichever ones did that would experience a boom in business, and in profits.
And in my casino I've noticed a huge trend of regulars who had migrated from VP to video slots..have migrated back to VP ..they get more time on device with VP ..
