## What is a Casino Comp?

A casino comp. What is it? In it’s most basic form, a casino comp is a complimentary service or product provided to those who patronize a casino property.

A casino is willing to give you back part of your theoretical loss, or their win for your gaming (or action).

Complimentary items or services are given out by casinos to encourage players to gamble. Some comps like free drinks require little play and are not based on your specific action. Though, as with most things in life there is extreme variability with regard to the type of free drinks casinos will provide. These variations include newly imposed limits on free drinks at bar top games (requiring a voucher) or the more lenient options when playing in high limit areas. Other comp items can include dining, concert tickets, rooms, pool cabanas, retail (shopping) and numerous other things.

How do casinos calculate comps? A player’s value to a casino, is based on how much they will lose. (or how much the casino will win) But, it’s not the actual loss that is used for the initial calculations, instead it’s the theoretical loss otherwise known as the theo. This is not to say that your actual loss is not taken into account, but for this initial and basic explanation it’s best to concentrate on the theo.

Every game in a casino has an advantage for the casino. This casino advantage or house edge is the mathematical advantage that a given game has over the player. This advantage assures that casino (or house) a percentage return over time. This percentage return is often referred to as the win for a casino. The Wizard of Odds memorializes this quite well with : “The house edge is defined as the ratio of the average loss to the initial bet. ” So, if one was going to wager \$100 on a hand of baccarat (with an assumed 1% house edge) on average that player is going to lose \$1 per \$100 wagered.

If you ever needed confirmation of how casinos referred to their business model, let’s take a quick glance at one of the monthly gross revenue reports from the New Jersey Division of Gaming Enforcement. Yep, it’s even referred to as the CASINO WIN in the reports.

Of course, in any gaming scenario there are a lot of assumptions. For instance, one assumption is that a player will play perfectly. This is the case when someone is playing games such as blackjack or video poker. These games have proper strategies that have to be followed to insure the calculated house edge. While it is fine to say a video poker game is a 99% game (1% house edge) or that a particular blackjack game has a 0.30% house edge; if the player is not playing properly (or perfect strategy) that actual edge can be significantly different.

My point though, is not to focus on the minutae of good versus bad games or even whether one is playing a game properly. Instead I am trying to get you to think about how a casino thinks with regard to giving out comps. In addition, there are many variables that come into play with regard to how casinos reward players. Players also need to understand that with regard to gaming risk there are multiple factors in addition to house edge, such as the measure of the volatility for a given game. Much of that conversation is beyond the scope of the average recreational player.

The average recreational player often makes decisions on what to play based on many factors that are not always based on the best game. For example, a player might consider playing a video poker game with a higher house edge because it is located at a bar with easy access to free drinks. Or, another player might decide to play a blackjack game with a higher house edge (worse rules) due to the low minimum bet. A good comparison of house edge of many casino games can be found at Wizard of Odds. (Just remember, all of these numbers assume that one is playing “perfectly,” which is easier in a game like baccarat than a game like blackjack.)

Let’s take a totally conceptual scenario of a casino and a card game like baccarat. A casino might expect to win approximately 1% (the standard bets of Banker and Player carry a house edge of 1.06% and 1.24% respectively) at baccarat over the long term. The casino will also make an assumption about hands per hour. If this conceptual casino used 1% for the house edge and 70 hands per hour, then 4 hours of play at \$100 average would look like this :

• \$100 average bet
• Total Action \$100 x 70 hand/hour x 4 hours = \$28,000 (in casino action)
• \$28,000 x 1% = \$280 (casino theoretical win)

So if the estimated casino win (based on the house edge being used for a given game) is \$280, what do you deserve in comps? Well, a very generous casino might give you back 40% or around \$110, a less generous casino around 20% or around \$50. How you use and redeem your comp, or even receive the comp can vary and is specific to a given casino loyalty program. Back before all of the automated tracking systems most comps were issued on paper. This is still the case for many special comps. (Something that will be the topic of future conversations.)

Now this is a very rough and conceptual example, but you can start to get the idea of how a given casino is valuing your play (action). Obviously, if you are playing a game like double zero roulette with a house edge of just over 5.25% you should be getting a LOT more back in comps. But, you will also be losing (in the long run) a lot more. Are there ways to optimize this comp earning? Of course there are, and this will also be a focus and continuous topic of conversation in future posts.

This example is just to start making you think about how there is a process behind what casinos provide in complimentary items. This scenario is not meant to be specific to any casino property. In future articles, I will be talking about the specifics of earning comps in different programs such as Total Rewards. I will also be distinguishing between the many different types of comps that include but are not limited to discretionary, marketing (which often includes comp room offers) and earned redeemable comps (much like earned redeemable frequent flyer miles in airline programs).