XP or Experience Points are gained by daubing squares playing BINGO.
Each room awards a different amount of XP per daub, the more you daub the more XP you'll earn in a round.
As you earn XP you'll level up, and you will receive rewards each time you do so. Some rooms and features such as side bets and car upgrade parts will unlock only by reaching a certain level.
Reaching a new level leads to assorted rewards, including Credits, Coins, and Power-Ups. Each level rewards differently, generally speaking, the higher the level you reach, the better the reward will be.