Andrew Cardno, CTO and co-founder, Quick Custom Intelligence (QCI)
Let’s face it — casinos, like all businesses, get tossed around by economic storms. The trick isn’t to pretend the storm won’t hit — it’s to build systems, processes, and strategies that bend without breaking. I like to call this becoming anti-fragile. But before we get into philosophy, let’s dig into what history has taught us, why clinging to the past is a trap, and how smart database strategies can help casinos not only survive, but thrive.
Lessons from history
History doesn’t predict the future, but it sure hands out a cheat sheet. In 2008, when the economy collapsed, our industry took a serious hit. And for the first time, the idea that gaming was immune to downturns got tossed out the window. These events — what I call Black Swan events — force us to reset our assumptions.
Fast-forward to today: We’re staring at new challenges like changing tax codes, volatile markets, and disruptive technologies like generative AI. Each one is a reminder that yesterday’s playbook won’t win tomorrow’s game.
Key issues to watch
Here are some of the pressure points casino leaders need to focus on:
– Black Swan events: Expect the unexpected. Tax code changes or AI-driven disruptions can flip the industry overnight.
– Database grain: Fine-grained data (like card-in/card-out sessions) is the foundation of decision agility. Summaries are convenient, but detailed data lets you adapt quickly.
– Over-investing in free play: Too much reinvestment can cannibalize revenue. Studies have shown that cutting free play in half often has no negative impact on response rates.
– Margin over revenue: In tough times, stop chasing top-line growth and focus on profitability. Driving margin is the fastest way to stability.
– Response Cadence: Move from quarterly or monthly cycles to faster, more agile testing and execution. Shortening cycles is the essence of being anti-fragile.
– Tax code changes as a Black Swan: Imagine this scenario: A player walks in with $100, gambles it, wins $1,000, and walks out with their original $100. From their perspective, they broke even. But under certain interpretations of new tax codes, that $1,000 win is taxable income, while only 90% of the losses are deductible. Suddenly, simply using a player’s card could create a taxable event. What happens if players decide not to use their cards to avoid this? For casinos, this would be seismic. Loyalty tracking could collapse overnight, rendering traditional database marketing strategies ineffective. This is the kind of unpredictable shock that defines a Black Swan.
Breaking up with the past
Here’s the hard part: When the market shifts, your old business model is gone. It’s like a breakup. Painful? Yes. Necessary? Absolutely. We’ve got to let go of the strategies that worked before but don’t fit the new reality. That means questioning sacred cows like print mailers, buffet pricing, and the endless arms race of free play.
Becoming anti-fragile
Resilient businesses bounce back. Anti-fragile businesses get stronger from the hit. That’s the goal. Here’s how you make it practical:
– Accelerate your response cycles. Test, learn, and adapt faster.
– Treat marketing history as a strategic asset: Store data at the finest grain and keep metadata so you can re-run and re-test programs.
– Encourage experimentation. Carve out a budget for tests. Every failed experiment is just tuition for future success.
– Focus relentlessly on margin. Profitability is the safety net that keeps you playing the long game.
The potential tax code changes are a perfect example of why casinos need anti-fragile strategies. If players suddenly stop using loyalty cards to avoid taxable events, the entire foundation of database marketing gets shaken. Anti-fragile organizations will have already experimented with new ways to track, engage, and reward players beyond carded play. Instead of being blindsided, they’ll pivot quickly — treating the disruption not as a catastrophe, but as an opportunity to innovate.
Final thoughts
Economic downturns aren’t fun, but they’re not the end of the world. With smart use of data, a willingness to ditch outdated practices, and a mindset that treats volatility as an opportunity, casinos can come out stronger. The goal isn’t to survive the storm — it’s to learn how to use it to your advantage.
