Question of the Day - 22 April 2024

Everyone knows that a "comp" stands for "complimentary," meaning "free" -- items and services given out by casinos to encourage players to gamble. But as this question amply demonstrates, "comp" also stands for "complicated." 

When it comes to four-walled restaurants and shows (located within the casino property, but not directly owned/operated by the casino itself), the deal on player comps can vary and sometimes widely. In the end, though, yes, a Caesars host can comp you to Peter Luger's or Adele and not to worry, Caesars isn't paying retail. 

How much less than retail is where it can get complicated, especially in the accounting. 

In general, it's easier to get a comp to a restaurant that the casino company owns than it is to a four-walled restaurant and the comp will usually be more generous. A host is much happier to comp you to a buffet or cafe than to a four-walled restaurant. 

Still, they're both soft comps, meaning they don't involve hard costs for the casino. A $500 comp to Peter Luger's doesn't cost Caesars or Luger's anywhere near $500, given the big markup on food and beverage. Similarly, Caesars holds back a certain number of tickets to Lady Gaga for its high rollers and though the tickets might be worth $800 each at face value and the company isn't collecting its share of the gate for the comps it issues, neither is it picking up a hard $1,600 charge for two. 

As for how the deal works, there might be several varieties. 

In the most common one, the casino and restaurant negotiate an agreement on how many complimentary meals the casino can offer to players. Similarly, the casino might reimburse the restaurant for the cost of the complimentary meals provided to players, either partially or in full.

The restaurant might also receive some compensation, both blue sky and monetary, through increased patronage from players who visit for the first time specifically to redeem their comps.

Similarly, comps can provide some value in terms of promotion and exposure for the restaurant. Players who redeem their comps at a restaurant might be more likely to return on their own dime if they have a memorable experience. 

In addition, our frugal friends and penny-counting advantage players tend to be averse to spending more than the value of the comp. (We like to tell the story about going to the Bacchanal Buffet with Jean and Brad Scott. The buffet at the time was $49.99 and the comp for three was for $150. When Jean was done with the transaction, she said, "I hate wasting three cents of a comp.") High rollers, by contrast, might not be so strict; say they have a comp for $1,000 at a restaurant and wind up spending $1,300; saving 70% on a great meal, most won't mind coming out of pocket for the other 30%. Which accrues to the restaurant's bottom line. 

Suffice it to say that comps make the casino world go round and soft comps, in particular, always appear to be worth more, and sometimes much more, than the face value on the comp ticket, whether it's a four-walled or casino-owned restaurant or show.