Former Harrah's Entertainment marketing executive Dennis Conrad recalls the Stone Age of player tracking: "Player tracking as we know it today was not that extensive and very difficult in those days. Table games was (and still is mostly) a manual process that wasn't bad at tracking the very high end. Slot tracking technology was just starting to be implemented and there were many bugs in the early years.
"Some properties transitioned to the (very expensive) slot tracking systems by first gathering manual information from employees on the floor and then inputting it into the system, until they became convinced of the business case for buying the technology," Conrad continues. "I remember some of the early discussions and issues from those years -- reinvestment was much higher for table players than slot players, who always complained about what they earned (they still do). That has changed certainly since then as the technology has evolved and the information has been accepted as to just how valuable (and reliable) slot players are."
In his seminal book, Comp City, author Max Rubin traces the beginning of player tracking to none other than Howard Hughes. In the late 1960s, as a response to the flood of junket players expecting freebies, Hughes and his MBAs instituted a two-pronged set of criteria for player tracking: How high was your line of credit and how many markers did you receive from the house? If you reached a certain threshold in markers taken out, your stay was comped. This pen-and-ink method of player tracking was soon augmented by the rating of players. The bigger the 'whale,' the higher the letter grade assigned him and the greater the likelihood that his next stay would be on the house. (Incidentally, until 1983, markers were unenforceable under Nevada law. Welsh on a marker now and the Clark County District Attorney is empowered to come after you.)
According to Rubin, in the early 1980s, Caesars Palace shifted the paradigm, predicating comps on estimated player winnings, plus a requirement of four hours of play a day over, say, a three-day span. "Hilton, the Desert Inn, and other premium Vegas joints quickly jumped on the bandwagon, and it didn't take long for Atlantic City to follow suit," Rubin writes. The comp-awarding responsibility was kicked upstairs, to the marketing department, ending the (still) longed-for good old days when pit bosses had the discretion of handing out comps. (You should see how Las Vegas Review-Journal readers endlessly pine for this golden era.) [Ed: And plenty Las Vegas Advisor readers, if you check out any of our numerous past Reader Polls on on the subject.]
"The inherent weakness of the system was (and is) that someone – the floorman – had to observe the play and accurately record the data that the marketing people used," Rubin resumes. "The original player-tracking methods were cumbersome and time-consuming, and since a sizeable percentage of the floormen in Las Vegas at that time were functionally illiterate and couldn't make heads or tails of the paperwork, it didn't get done properly."
It was worse than that. According to Bill Zender, who instituted player tracking at the Maxim in the early 1980s, table play was recorded on sheets of paper which not only covered multiple players but might not even have their names, just "Man with red hat," for instance. These forms were called "walk sheets." "The next thing everybody went to was a walk-slip," which recorded individual play and was input into a database at the end of the shift.
"When we went to player tracking we had to be very careful," Zender recalls, "because a lot of players were getting over-comped." His method, if approached with a request for a comp, was to square the house's theoretical win with the player's average bet, and then give the player 50 percent of theoretical win in comps. Systemization of comping was gradually being set into place.
Rubin explains the standard player-ratings equation as average bet X hours played X house edge = rating. Rated players were handed VIP cards (i.e., walk slips), upon which the floorman recorded your buy-in, average bet, playing time, and winnings/losses. This information then went to the almighty marketing department, where your comp eligibility was determined.
Not surprisingly, the 1980s saw the rise of computer-generated tracking. "Bill Harrah generally gets the credit for the earliest effort at slot reward systems in the 1970s at Harrah's Reno." This was before the advent of the magnetic-stripe card but "there was some kind of ticketing device. It was manually processed." It recorded time spent playing "and they earned tickets for coupon redemption. It was electronic of some form at Steve Wynn's Golden Nugget in Atlantic City [which] is usually recognized as the first effort at a formal slot tracking programs (tickets spitting out from the machines)," Dennis Conrad recalls.
What Bill Harrah began was a phenomenon which was raised to an art form by a then-obscure Harvard professor, Gary Loveman. He approached Harrah's Entertainment in 1997 with Total Gold (now Total Rewards), which simplified the player-rating process by equating one credit with every $5 spent on slots and $10 on video poker – earning him the eternal enmity of video poker players.
This made the earning of comps a lockstep – and slower – process, as it took 100 reward credits to get one measly dollar of comps. Computer algorithms determined a player's value, partly by crunching travel patterns and spending habits into the Total Gold formula. Despite the downside of this mechanization of the comping process for some gamblers, it proved highly successful with customers and an effective marketing tool for Harrah's, particularly as it incentivized regional players to rack up credits that could be redeemed at the company's Las Vegas properties.
What's more, Loveman had flipped the casino hierarchy on its head, elevating the lowly slot player and diminishing the value of the high roller. You no longer had to be a "whale" to be recognized for comping privileges, especially as slot play became the dominant force in the casino. In the near future, with the graying of the slot audience and the resurgent popularity of table games, these paradigms may have to be revised yet again.
