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Fontainebleau Quietly Kicks Gamblers in Nadular Region

by Ohio Digital News

Our friends at Fontainebleau are making some changes to their loyalty club. Shocker, not in a good way.

The struggling but drop-dead gorgeous resort sent Fontainebleau Rewards members an e-mail that started with the phrase, “For added simplicity and transparency…” It’s well known anything that follows that phrase tends to be bad news.

For example, “For added simplicity and transparency, while you only have a tumor in one testicle, we’re removing both, just to be on the safe side.”

Genus: Opuntia snarkycium.

Anyway, here’s the rest of the message from Fontainebleau: “For added simplicity and transparency, we are making some changes to Fontainebleau Rewards. Beginning on May 1, 2024, at 8 a.m., you will earn Play Points to accumulate as slot free credits based on the following calculation methods: Slots, 1 Play Point for every $5 of coin-in; Video poker, 1 Play Point for every $10 of coin-in.”

Free play is awesome, and one of the perks of loyalty. Casinos aren’t obligated to give players anything back, but free play is a way to keep guests returning again and again.

That said, it’s useful to compare the changes to the original calculation methods.

Previously, calculations were made thusly: Players earned two points for every $1 of rated play on both slots and video poker.

“Rated play,” according to the Fontainebleau Web site, “is determined by average bet, game type and length of play.” Also known as “theo,” or “theoretical” loss. Players tell us they previously earned a point for $4-5. So, it’s been a little fluid.

We are not a math person, but according to our calculations, the new program is roughly 900% worse for slots players and 1,900% worse for video poker players.

That’s right. For $1,000 of coin-in, video players get $1 in free play.

On the bright side, Fontainebleau assures, “The redemption value of Play Points will remain unchanged: 100 Play Points = $1 Slot Free Credit.”

So, the subtext.

It’s a little awkward.

This tightening of the belt means a couple of things.

It means Fontainebleau made a major miscalculation when it opened, namely that its loyalty club was “too generous.” This shouldn’t come as a huge surprise as Fontainebleau has never operated a casino before.

What it also means is the struggle is real, and Fontainebleau is making moves to try and bolster its revenue. That’s due to pressure from the top, Jeffrey Soffer,  Chairman and Chief Executive Officer of Fontainebleau Development. Soffer, in turn, is getting pressure from Koch Industries, the folks who helped pay for the resort, in addition to a $2.2 billion construction loan.

The change in the loyalty club seems to be a painful but necessary adjustment, and it gives the appearance of increasing revenue (give back less for play, margins are higher). The problem is such loyalty club incentives are what build, well, loyalty. Perks and freebies are an integral part of casino marketing. Trimming down the perks is a short-term solution to a much bigger problem.

Multiple problems, really: Fontainebleau is in a challenging location (there’s no foot traffic), the company has no casino database to speak of, and also has no hotel partner (hotel partners come with massive marketing databases).

Along with the firing and resignations of a dozen top executives, Fontainebleau is getting a reality check, with few signs there’s a plan to overcome those seemingly insurmountable obstacles to success.

Hint: It’s not effective outdoor advertising, all due respect.

Fontainebleau recently hired a president, Maurice Wooden (formerly of Wynn Resorts), who is unlikely to be licensed by gaming regulators, and Fontainebleau has also been sued by Wynn Resorts for poaching.

The drama is glorious.

We are a huge fan of Fontainebleau, but have had little luck gambling there. The restaurants have been hit-and-miss. Don’s Prime, for example, is one of the best steakhouses in the world. Mother Wolf was a disappointment (destination bread, but the restaurant seems to give its pasta a gentle kiss of warm water, pushing the acceptable limits of “al dente”). We have about 87 restaurants left to try at Fontainebleau, so stay tuned.

Fontainebleau’s art is amazing, the bars are spectacular, as are the views from the resort’s south-facing rooms.

Fontainebleau appears to falling into the belt-tightening trap. Odd, given the fact it doesn’t have to start servicing its debt until mid-2025. (The first two interest payments were pre-paid.)

We will forever be grateful Fontainebleau opened after sitting unfinished for 16 or so years.

We’re rooting for Fontainebleau to slay. Cutting perks for players isn’t the way we’d recommend, but we are a layperson, so we’ll see how this plays out.

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