Abstract
All-expense-paid trips for gamblers, known as junkets, are part of casinos' marketing strategies. Independent "junket reps" act as the liaison between casinos and proven premium players, making all the arrangements and accompanying the players. Casinos assign a rating to each premium player based on the equation: (casino's theoretical win) = (player's average bet) x (hands per hour) x (hours played) x (house advantage). A player's rating is used in several ways to figure the rep's commission: flat fee, percentage of front money, commission on dead chips, commission on live chips, percentage of player's loss, or percentage of casino's theoretical win. Some casinos operate their own junkets, but junkets can be unprofitable or marginally profitable. Junkets may not be needed in peak seasons and on weekends; they can mean more bookkeeping and staff; and, as airfares rise, marginal costs increase. As competition intensifies and marketing strategies become more sophisticated, however, the competition for premium players will ensure the survival of junkets in some form.
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