In what may be part of MGM’s efforts to be rational in an otherwise irrational market, the company officially implemented its new loyalty rewards program Feb. 1.
MGM – and its online joint venture BetMGM – renamed their M Life Rewards to the more brand-in-line MGM Rewards. The gambling giant also revamped the rewards themselves and how members can earn them.
At the same time, it split Borgata Online Casino off and created its own Borgata Online Rewards. That brand is owned and operated by BetMGM, and had until now been part of the M Life Rewards program.
The program is currently flush with more than 34 million members. That makes it one of the largest of its kind according to MGM. The company says it offers significant improvements over its previous incarnation.
As popular as M Life was, critics slagged it for not having enough benefits for non-gamblers. Stacy Hamilton, MGM Resorts International’s Executive Director of Public Relations said:
“We listened to feedback from our guests and employees and saw this as a great opportunity to enhance member benefits and earning potential as well as create a simpler, more streamlined experience across our many lines of business in both Las Vegas and our regional properties.
Our research indicated that many guests didn’t always make the connection between M life and MGM Resorts. In rebranding to MGM Rewards, we are aligning our loyalty program more closely with our brand, making a direct connection to our resorts, and encouraging members to take advantage of greater benefits across the entire portfolio.”
MGM may be taking a page from Caesars. That company overhauled its loyalty program and changed the name from Total Rewards to Caesars Rewards back in 2019.
25 Will Get You 4
Naturally, everyone affiliated with MGM brags about the added benefits of their loyalty program rebrand. However, even before MGM Rewards launched there were grumblings about the extent to which it incentivized gambling. At the time, that was where most of the points-earning potential was.
Now, the criticisms are different. Loyal MGM gamblers say it’s a slap in the face. They feel it works to their detriment, and in favor of members of World of Hyatt, an MGM Rewards partner.
Some former M Life Rewards members may see a drastic reduction in their Tier Credits and may even lose some elite benefits. These are both effects of the changes in how MGM awards Tier Credits and its requirements for elite status.
For instance, the earning rate under M Life was 25 Tier Credits per dollar spent at Las Vegas MGM Resorts and 8 Tier Credits at most regional MGM Resorts. MGM Rewards members will now earn a mere 4 Tier Credits per spent dollar of nongaming spending. This includes such things as hotel accommodations, dining, and spa services.
BetMGM Rewards for online play are separate from MGM Rewards for in-casino play, and from Borgata Online Rewards. Even so, Rewards Tier Credits cross over between the three programs. Additionally, both online platforms allow users to exchange their points for MGM Rewards points, so online play can always contribute towards retail rewards.
Folding or Holding?
Moving up in Tiers provides all sorts of perks. These include, for example:
- Waived resort fees and late checkout for the Gold Tier,
- Complimentary tickets to MGM Rewards concerts for the Pearl Tier, and
- Travel credit to Vegas and free suite upgrade for up to three nights for the Platinum Tier
There are limits to the amount of crossover between the programs, however. BetMGM and Borgata Rewards programs don’t pool together for instance, unless the user converts both to MGM Rewards. It doesn’t appear that reverse exchange from retail to online is possible.
Users still have a lot of options. BetMGM Casino users can redeem their points for bonus credits for online casino play, poker play, or sports betting. Alternatively, they can trade them for rooms, meals, and other experiences at participating MGM Resort properties. Borgata Online users have similar options.
Even so, it feels a little like downsizing. Or a move to stanch an overall hemorrhaging of cash within the industry. For instance, MGM has altered the credits earned on slot machines, video poker, and other gaming devices to be comparable to the lower rate bettors earn on table games.
Rational vs. Irrational
BetMGM has forecast a 50% jump in revenue for 2022 and predicts profitability by 2023. Even so, MGM and its joint venture partner Entain have poured $450 million into the business this year, and have spent $1.1 billion since 2018.
Its major competitor, DraftKings, spent $500 million in 2020 alone. FanDuel had burned through $1 billion in marketing by June of last year. And the combination of DraftKings, FanDuel, and Caesars added up to an advertising spend of $314.6 million in 2020.
All of this is probably what led Wynn Interactive to pull out of a deal that could’ve had WynnBet valued at over $3 billion. Even though Wynn’s retrenchment into hotels and casino gambling brought its stock down over 55% from its all-time high, their sober approach to marketing could account for MGM’s rewards revamp.
Indeed, talk of sticking to their brand, and dancing with them that brought them to their longtime brand recognition, sounds as conservative as Wynn’s former CEO Matt Maddox. He had, in part, blamed his sheepishness on the irrationality of the market: “Competitors are spending too much to get customers.”
Loyal to Their Brand
When you’ve already got a recognizable brand and a solid customer database, why continue to throw money away? Your audience that can only be grown so far and may have even already started shrinking.
As Hamilton stated:
“Our research has shown that we continue to provide a higher rate of our loyalty currency (MGM Rewards Points) for gaming play than our major competitors, even without a tier multiplier. [Translation: We’re Budweiser, they’re White Claw.] MGM Rewards’ slots players have more ways to earn than is the case with many of our competitors—they earn MGM Rewards Points AND Slot Dollars for their gaming play.”
All of this should allow MGM to focus more generously in other areas. It may also help the company target future promotions more precisely, and offer rewards that have more value to its members. Alternatively, they may simply pass the savings onto their shareholders.
Hamilton doesn’t give much away in this regard, keeping her cards close to her vest.
“We’re now streamlining earning rates across the company to simplify the program, which enables us to invest in providing more meaningful benefits at each tier level.”