It's designed for the gamblers to gamble more in their website. I'm not a VIP myself, but just by looking at it, I guess it's pretty obvious that in order for your rank to increase, you need to gamble even more. It doesn't give you a real edge whatsoever, but it gives you some cashback or in this case, rakeback.
I do not think it is designed for gamblers to gamble more on gambling sites but it is giving for those that are already gambling more and spending money on the gambling site. The gambling site will give them the bonus just to say thank you for using our sites always. That is because as they gamble more they lose more money. Some people behave higher amount of money and still think they are spending little in gambling.
What I think might make VIP gamble more on the gambling site is for them not to lose their VIP status if it can be lost by inactive customers.