Quote:
Originally Posted by dilanesp
You are ignoring that variance is huge in gambling. You have to bet a LOT of money to hit the convergence point.
Slots have so much churn that they are a special case, although reducing takeout isn't the only way to increase Time On Device. They also use bonus rounds.
But for most forms of gambling, the casual player takes a LONG time to bet enough where the main causal factor isn't short term luck. Hence, the need to discriminate and charge them higher takeout while charging less to players who care.
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Not ignoring it at all. By virtue of you stating slots having a lot of churn and are a special case, you've just proved my point. They are the closest casino game to compare parimutuel wagering with because a slot machine operates off a straight takeout model also.
My point was all customers care, even if they don't consciously know it. But if we are to assume your premise that not all customers care and therefore should be treated differently, then ponder this.
If it's necessary to lower the effective takeout rate for "customers who care" why is it not the right thing to do for everyone? If the "customers who care" will bet more because of their lower effective takeout, wouldn't everyone bet more if the takeout were lower? After all, if the "customers who care" aren't going to bet more, then why bother charging them less?
The data I presented on our panel in Tucson showed that our customers churn rate was over 42% (a factor of 3x) higher when factoring rebates (which is how the industry currently lowers effective takeout).
Many people seem to forget we are in the churn business. Putting more money in the customer's hands will always increase churn rates. Optimizing that number to maximize revenue is the challenge, and it's not an easy solve, especially when everyone isn't doing it at the same time. That's why Bill was suggesting that tracks band together to do it.
