Harrah’s unveils new marketing program

By Liz Benston (contact)

Wednesday, May 26, 2004 | 10:47 a.m.

Harrah's Entertainment Inc. has introduced a pilot program in its East Chicago, Ind., casino that allows employees to market to customers while they are gambling, such as by intercepting gamblers on a losing streak to offer them a free meal or other perks, the company's top executive said Tuesday.

The program, called "Marketing at Slots," is part of a broader effort to cater to customers in real-time based on their current gambling activity, Chief Executive Gary Loveman said.

The effort is possible through recent technology that combines marketing information from the company's "Total Rewards" slot player loyalty club with real-time data on gambling wins and losses to obtain a detailed profile of each Total Rewards member, he said.

Loveman's comments came during the opening of the Gaming Technology Summit conference, which runs through today at Green Valley Ranch Station Casino in Henderson.

The program, which is expected to be rolled out nationwide, is the latest in a series of technology advancements for a company that derives a significant chunk of its profit from high-technology marketing efforts.

Harrah's now has 28 million members in its Total Rewards program, which rewards gamblers with freebies and other perks based on their gambling activity. That program uses a sophisticated customer database to comp players based on their projected behavior over time rather than having the company reward customers after a gambling session, Loveman said.

"Every customer based on their (gambling activity) gets treated differently," Loveman said. "This is a very controversial notion" and is different from the retail industry, where customers are generally treated the same regardless of what they spend in a store, he said.

Harrah's broke with the casino industry when it decided to cultivate its own "coinless" slot machine technology rather than adopt a system created by International Game Technology, the No. 1 slot maker in the United States. Coinless systems allow players to gamble with paper vouchers rather than bills or coins. The company is still completing a rollout of the system, which will allow the company to track customer play and spit out marketing offers right from the machine.

Almost one half of revenue at the company's Harrah's and Rio properties in Las Vegas is now generated by Total Rewards cardholders, while about $1.2 billion in revenue last year came from Total Rewards members who are gambling at a Harrah's casino other than their usual Harrah's property closer to home, he said.

The "Marketing at Slots" program raises questions about whether Harrah's will offer adequate training about problem gambling to employees who intercept gamblers on the casino floor, said Carol O'Hare, executive director of the Nevada Council on Problem Gambling. More aggressive marketing techniques should be approached with problem gambling concerns in mind, she said.

"Responsible gambling is a business philosophy that has to be part of everything you do. It's not a department," she said.

Harrah's spokesman David Strow said the pilot program, like any new marketing initiative at the company, is reviewed prior to introduction to ensure that it doesn't conflict with the company's responsible gambling policy.

"Responsible gaming is a particularly important issue for this company and we have publicly committed ourselves to the promotion of responsible gaming," Strow said.

The program, which will likely be rolled out to other casinos in the second half of this year, didn't raise any red flags at the company, he added.

The program may actually help problem gambling efforts because the slot machine technology is able to identify people who have voluntarily excluded themselves from Harrah's casinos because of a gambling problem. The system alerts employees to remove the customer from the casino, he said.