How Business Intelligence Can Boost Casino Profitability
Much of the exciting potential of Business Intelligence (“BI”) to quickly boost profits remains untapped by a large percentage of casinos. A Gambling and Gaming Expo (“G2E”) Survey found that 25 percent of the industry experts surveyed felt that the industry’s use of Player databases was ineffective due to data “being analyzed inadequately.” Only 16 percent of those interviewed indicated that the industry was “very effective” in the use of player databases. This implies that while casinos may have some of the tools in place, without the staff or expertise to create meaningful information from vast amounts of data, they may not be experiencing the revenue enhancement potential available to them. While larger operations like Seminole Gaming, which operates 11,000 slot machines and 7 casinos, can afford a Business Intelligence team, smaller casinos can look to outsourced BI as an affordable alternative.
The multi-million dollar gains in profit achieved by Seminole Gaming through its BI efforts are discussed by Ralph Thomas, Vice President of Strategic Analytics and Database Marketing in his article Baseline. Thomas describes how a model built in a practice training session ultimately led to over a million dollars of incremental profit. Another million dollar boost to Seminole Gaming’s profits resulted from using response models to optimize their direct mail campaigns. The BI team also utilized market basket analysis to optimize its slots operations. Thomas explains
“When Seminole Gaming embarked on this project, we didn’t know what we’d find. It turns out we found very surprising associations on the slot floor. These associations cannot be revealed here, but we can say that the methodology behind slot decisions has been fundamentally altered thanks to the findings from this model.”
How can smaller establishments in the casino entertainment industry reap the immediate rewards of analytics without substantial outlays for technology and BI staff? Outsourcing provides an opportunity to harness the power of BI to achieve greater profit per marketing dollar spent. Many smaller casinos still bet on management’s intuition, lagging spreadsheets, or conclusions about customer behavior derived from controlled experiments with participants who may not be representative of customers served by their casino. Yet the right tools and expertise needed to turn vast numbers of transactions from multiple systems into meaningful insights and actionable dashboards are just as accessible to them as they are to the larger operations in Las Vegas and elsewhere.
Casino analytic and consulting firms can provide the expertise and affordable BI software packages your business needs to take its operations, casino player development and marketing conversion results to the next level in a more cost-effective, efficient way. The profit boost offered by more sophisticated analytics can be realized quickly with the right tools and methodology.
References
Singh, A. and Cardno, A. (2008). Let’s Talk Turkey: Applying Retail Market Basket Analysis to Gaming. Casino Enterprise Management Retrieved from http://www.casinoenterprisemanagement.com/articles/december-2008/lets-talk-turkey-applying-retail-market-basket-analysis-gaming
Thomas, R. (2012) Analytics Tools Predict Customer Behavior. Baseline. Retrieved from http://www.baselinemag.com/c/a/Business-Intelligence/Analytics-Tool-Predicts-Customer-Behavior-644695/
Volume 9: The Evolution of Casino Marketing and Technologies. (2010) G2E Future Watch Series. Retrieved from http://www.americangaming.org/sites/default/files/uploads/docs/futurewatch/futurewatch_vol_9_exec_summ.pdf