In theory and general actuality, you are correct Rob on how they determine....still sometimes there is just no logical ryhme or reason to why this or that.
Why so? That can vary all the way from idiot hosts, market conditions, reverse pyschology with PITA customers (ya know like moi), the property (i.e. where would one rather work, at the Wynn where tips average~$275/day or just down the street at the Stratosphere where tips average~$75/day point being prolly have a better chance of better perks at Strat. than the Wynn), slot play ratings may be more accurate but many times the Venetian, the HS and I assume all casinos at least on table games often do not come close to being accurate on avg. bet, hours played, and win/loss. For most that would be an eff up---kinda of bad when they have you down for a $500 average bet when you played all night and never made a bet below $1000 or the flipside where one may receive a incorrect higher rating you never made a bet over $100 but were in the computer with $500 average bet. Could keep going but hopefully the drift is apparent.
As good as Harrah's database and marketing reputation is supposed to be, I still have not figured why from the same property I may get a cruise invite worth at least $10K and a month later get an invite for 2 free nights with a $100 meal comp. Please do not take this last statement out of context but for some always full RFB and more, the latter is junk mail. In addition, the contrasting invites is actually chronic but though a nuisance, it is kinda like opening a box of chocolates per Mr. Gump.
A good personal host and local rep. are you best bets rather than just a player's card program regardless, if possible. The offers,invites,comps,whatever will supercede any player's card program and most standard marketing offers assuming they get the ryhme and reason correct!!
Yea, I too absolutely agree with you there, it is always about who you know in every industry and the relationship you maintain over time with that particular person or host...I've had hosts move onto other properties/separate companies in the past...one went from Harrah's to the Mirage and I had never even played at the Mirage previous to her move there, but she called me up one day back a few years ago and told me about her move and said she would set me up with the full package RF&B, Butler Suite, Limo, Airfare anytime I wanted to come for the weekend, because she was familiar with my play/action...most hosts moving to another property usually will try to also get their clientle to move with them too though...
Here's the way one of my close casino contacts at Harrah's explained the "Theo" to me in the past per an email...
The industry norm is for casinos to return 20%-30% of their theoretical win on your play in the form of rooms, food, cashback, and promotions.
For 99%+ ER games, casinos will rarely accord play anything stronger than 6% (a 4% max is more prevalent). At many, a game such as 9/6 Jacks will see a 2%-3% "theo" assigned -- I'd expect Borgata is no more than 2%.
If you can believe it, at one time Sands assigned a 1% theo to the game, with relatively negligible food comps (hosts could, and often do, provide much stronger discretionary comps -- including RFB on decent $1 play).
Your actual theo is generally unavailable from the slot desk, but many hosts will disclose it for a given trip.
For $10K of play, you might see a theo of $200-$400. That would suggest a comp rate of no more than $40-$120 (.4%-1.2%). Typically (just winging some numbers, you can adjust based upon your particular experience) you might see a mix of comp components that looks something like .3% food, .3% cb, .5% room and .1% promos ($30/$30/$50/$10). Stronger values might be available during some promotions, such as "x" RC or cb ones or free/discounted buffets.
Actual experience at any given casino will vary. But they should give you a fair indication whether your particular experience is reasonable and/or competitive with other AC casinos.
Some Harrah's history too: Harrah's introduced a series of loyalty cards called Total Rewards, which were used for "comps" and other free stuff. For the games folks out there, notice that you can "level up" as a member from Gold, Platinum, Diamond, Seven Stars, and for one member - Harrah's "best" customer - there's a Chairman's Club card. They go so far as to fly you around, give you free hotel and accomodations, and other great perks.
This loyalty card gave them the underlying data which they could now use to drive the other parts of their data strategy.
LTV on a per-user basis. The next step once they had all this data was to create models against the lifetime value (LTV) of their customers. This was done in two ways - first, you can imagine a visit to a casino, where a customer comes in, plays cards/slots/whatever, and then leaves. Based on their actions, a "theoretical win $" is calculated, which is an expression of what the casino should expect to get from that person. Combining this number and other services consumed and comps, you end up with a net profit calculation. You can imagine that this number is a rolled up view of:
How much money that person brought with them, What games they played, in what mix, How long did they play for, What other services did they consume etc.
Once you can value an individual session, then you can also chain together multiple visits to calculate an aggregate value. This means that you can now tell the approximate difference between a rich customer that visits every July 4th, once a year, versus someone who plays frequently but also spends less money.
Edit: One last one from a Las Vegas article grab:
With a $25-a-hand blackjack player who plays 50 hands per hour for four hours. This player puts $5,000 into action ($25 x 50 x 4). The casino figures it has a 2% edge overall in blackjack, so $5,000 x .02 = $100, which is the expected casino win. Since this casino is on the Strip and faces stiff competition, it has a 40% comp rebate. So .4 x $100 = $40, the amount the player is entitled to in comps.
This formula works the same way for slot and video poker players, but all machines are not created equal and savvy machine players need to understand the meaning of the word "theoretical" usually called theo, the god worshipped by casino executives.