Katherine A. Spilde, Anthony F. Lucas
UNLV Gaming Research & Review Journal
Publication year: 2018

Free-play has become ubiquitous in casinos, with operators claiming its purpose ranges from extending play time (Gruetze, 2012), to lowering the house advantage on slot machines (Burns, 2010), to competing for market share (Murphy, 2016), to increasing customer loyalty (Armon, 2015), to growing net revenues (Armon, 2015; Belko, 2016; Burns, 2010; Gruetze, 2012), and more. As gaming proliferates across the globe, many operators have increased their reliance on free-play offers, to combat increased competition. For example, in one U.S. jurisdiction, it is not uncommon for an operator to redeem in excess of $50 million dollars of free-play per year (Belko, 2016). For others, free-play redemptions comprise 20% or more of a casino‚Äôs total gaming revenues (Barker, 2015; Murphy, 2016). This increased reliance on free-play has caused several U.S. jurisdictions to rethink the tax treatment of these incentives (Belko, 2016, Armon, 2015). Other tax authorities are interpreting existing and arguably vague… read more.