The first thing that most new players do when considering whether or not to deposit at a site at which they have never played before is taking a look at what Deposit Bonuses are offered through the site. Unfortunately, it is sometimes mathematically, “Better,” not to take a bonus at all in terms of Expected Value v. the ability to withdraw your funds whenever you like.
Due to the fact that online casinos have offered hugely profitable bonuses over the years, they have adjusted their Bonus Terms and General Terms & Conditions to make it so that many bonuses no longer have an expected profit for the player. While there are still some bonuses out there that are mathematically beatable (in terms of expected profit) when played correctly, with discipline and by identifying beatable games, the majority are not.
Some casinos have adjusted the Bonus Terms and Rules to such an extent that the player is expected to finish with $0 of the Bonus Funds, and additionally, to lose all or some of the deposit. We are going to take a look at a few such bonuses and explain why you might be better off to not take a bonus at all rather than play them.
I define a Negative Bonus as follows:
Negative Bonus - A bonus in which the player is not only expected not to profit, but also expects to lose some or all of his/her deposit when playing the bonus.
There are some Bonuses that have exactly zero expected value, but they are rare. In other words, after playing through the wagering requirements on the best possible game, the player expects to lose all of his/her Bonus Funds, but to retain exactly 100% of his or her deposit. The majority of bonuses do not work out that way, but when they do, I would term them, “Expectation Neutral Bonuses.”
Obviously, a Positive Bonus is one in which the player expects to profit on the best game available and after completing the playthrough requirements.
There are many factors that can contribute to a bonus being negative, and they are effectively the same as those that contribute to a bonus being positive. Let’s take a look at some Bonus Terms that might render a bonus negative:
The most common aspect that makes a Negative Bonus is by having high playthrough requirements. At the end of the day, all a casino has to do is determine a player’s expected loss on the best game available, (by RTP) assume the player is going to play that game and then make the Wagering Requirements such that the Expected Loss would wipe out any Bonus Funds and ensure that the player finishes with less than the amount deposited.
Some games are more complicated than others for the purposes of this determination. For example, a casino may allow Odds bets to be made on Craps, so the casino would need to determine how many Pass or Don’t Pass bets a player would be making (assuming the player Takes/Lays Max Odds) to complete the playthrough.
Also, Element-of-Risk is sometimes the more important consideration than the RTP on a player’s initial bet. Element-of-Risk for multi-bet games refers to the amount that is expected to be loss against a player’s average total bet. Therefore, if a game were to have an RTP of 97% (3% House Edge) based on a one unit initial bet, but the player is expected to bet three total units by the time the game ends, then the EoR would only be 1%.
Either way, online casinos can often use playthrough requirements, and nothing else, to ensure that any bonuses being offered are Negative Bonuses.
Another tool that an online casino might use to ensure that a bonus is negative is Maximum allowed wagers. For example, some online casinos are such that a player may not wager more than a certain amount (often $5-$10) on any given hand while playing on a bonus. In effect, this eliminates any possibility of a player being able to use Variance in his/her favor on what would otherwise be a losing bonus.
Vegas Crest is a casino that has this term, which reads:
A maximum of $5.00 or 10% (whichever is lower) of any bonus type or any winnings derived from bonuses or free spins may be wagered at a time, per game round, spin or hand. Any breach of this or any other Bonus Terms may lead to bonus and winnings being voided, bonus privileges revoked and/or account closure.
Here is a hypothetical bonus to illustrate the point:
Imagine that there is a Craps Bonus of 100% by which the player may deposit $100 and will receive $100 in Bonus Funds for a total bankroll of $200. We will also say that the bonus has a total Wagering Requirement of 100x the Deposit + Bonus. The Craps game has 2x Odds.
If the player makes $5 bets on the Pass Line, then the average total bet will be:
(5 * 12/36) + (15 * 24/36) = $11.6667 is the average bet.
Okay, so the player must make a total of $20,000 in bets to complete the wagering requirements, which would be 20000/11.6667 = 1714.28 or 1715 Pass Line bets for a total of $8,575 in Pass Line bets expected.
That $8,575 in PL bets has an expected loss of 8575 * .0141 = $120.9075, or $120.91 which, would mean the player expects to lose the entire Bonus as well as $20.91 of the Deposit leaving a remainder of $79.09.
However, if the player could make one High-Risk and High Variance bet, then given the playthrough requirements, it may be possible to still have an advantage.
Imagine that a $200 bet on the twelve (if allowed) pays 30:1 if it hits, which means that the player would win $6,000 and keep the original $200 for a new bankroll of $6,200. The player must still make $19,800 in total bets to complete the playthrough requirements, and that comes with an average bet of $11.6667, so 19800/11.6667 = 1,697.138 or 1698 PL bets expected.
Those 1698 PL bets total $8,490 and have an expected loss of $119.709, so $119.71. The player would have $6,080.29 remaining.
Note that if the initial bet fails, the player only actually loses $100 because the other $100 was bonus funds and not cash. The probability of success is 1/36 and the probability of failure is 35/36, so based on $6,080.29-$100 = $5,980.29 expected finish if successful, let’s take a look at the profit expectation:
(5980.29 * 1/36) - (100 * 35/36) = 68.8969
That means the player enjoys an expected profit of $68.90, for an advantage on deposit of 68.9% given betting this way. Again, don’t forget that we have already removed the deposit of $100 from the $6,080.29 because the initial $100 is not profit, but rather the original deposit.
However, if the player is limited by how much may be bet on a single hand, this doesn’t work. The reason why is that the House Edge still has an opportunity to grind the player down because the player lacks the opportunity to bet his/her entire balance on the one result.
Furthermore, some other Terms & Conditions may render such an approach impossible:
Some online casinos may prohibit what they refer to as, “Bet Structuring,” “Professional Play,” or “Betting Systems.” Any of those terms could be applied to the betting that we looked at in #2, even if you were allowed to bet that much at once, because the casino controls what those words actually mean and looks at it on a case-by-case basis. Ultimately, some casinos may determine that betting your entire bankroll on one result to take advantage of Variance, and then, ‘Grinding out,’ the playthrough requirements constitutes, ‘Bonus Abuse.’
This one is a little bit odd, but it’s similar to #2. Basically, some online casinos (though I don’t see many do it this way) prohibit a player from making a Maximum Wager a certain multiple in excess of the player’s lowest wager made, otherwise the term is considered violated. For example, if the casino says that your highest bet must be 5x your lowest bet, or less, then if you bet the $200 on that one result, your minimum bet after than can only be $40.
Of course, that doesn’t change the profit expectation of such a bonus, but it increases the Variance associated with grinding out the playthrough. Either way, it is a Bonus to look out for because a player may forfeit the Bonus and any associated winnings therefrom by violating any Bonus Term.
Naturally, if you are not allowed to play Craps in the first place, then the game of Craps does not work for the Bonus described in #2.
Online casinos will often limit the games that may be played while on bonus funds to varying degrees. Some casinos will restrict Table Games altogether, while others may only restrict certain ones.
By far, the worst term of this nature I have ever seen is at Jackpot Wheel Casino, which states:
8.4.1.1. Table and Video Poker Game Restrictions: New players are restricted from using match offers on their first 3 deposits at any of the casino's video poker and table games. The casino reserves the right to void any withdrawal made if a new player is found in contravention of this rule. New players are welcome to use their first three deposit match bonuses on Slots, Keno or Scratch Card games.
Essentially, they have restricted EVERY SINGLE GAME from a player’s first three deposit Bonuses with exception to Slots, Keno or Scratchers. That’s complete garbage, right there. I could understand that for a No-Deposit Bonus, but Deposit Bonuses!?
It’s pretty rare, but sometimes a casino will offer a Bonus that any winnings from cannot be cashed unless the player wins an amount equal to the Deposit + Bonus. Otherwise, the player may withdraw his deposit upon completing the Wagering Requirements, whatever is left from the bonus will remain in the player’s balance, which must then exceed the total amount of the bonus given to make another withdrawal.
In other words, say you get a 100% Deposit Bonus on $100 for a bankroll of $200 and finish the Wagering Requirements with $150 left. You would only be allowed to withdraw $100 of it whereas you would have $50 remaining in your balance and would have to play it to $0 or try to get it to $100+.
This term is not very common, I may have only seen it at one casino (and forget which) but it is one to look out for.
In my opinion, this really depends on how you define, “Value.” Any bonus that is going to add funds to your deposit will give you more play (on an expected loss basis) as opposed to not taking a Bonus at all. For example, let’s say that the best slot at a given casino has an RTP of 5%, playthrough requirements of 25x, and they will give you a 100% Deposit Match on up to $100 in deposits:
Okay, so you will have a bankroll of $200 and you must complete $5,000 in wagering prior to making a withdrawal. In total, you are expected to lose $5,000 * .05 = $250 and fail to complete the Bonus with any money left whatsoever.
On the one hand, you are expected not to complete the bonus. However, if you take a look at how much you are expected to be able to wager without the bonus at a 95% RTP, all you need to do is this:
100/.05 = $2,000
Now, if you take the Bonus and double your bankroll, then you double the two grand in expected play and arrive at $4,000 in expected play.
Either way, you are expected to lose, but if you put a lot of value on playtime, then any bonus is better than no bonus at all.
However, one consideration you should make is that of having a decent hit. At most casinos, if you deposit without taking a bonus, then you must playthrough 1x your deposit (i.e. the amount deposited) before you are permitted to make a withdrawal. The expected loss on that with a 95% RTP and $100 deposit is $5, obviously.
For the sake of argument, let’s say you are betting $5/spin and you hit a pretty decent Free Games on your very first spin and win $150. Your total bankroll is now $245 and you have to wager $95 with an expected loss of $4.75 to bring your total bankroll down to $240.25, then you can cash out if you so choose.
If that happened on your first spin, but you were playing the bonus, your total bankroll would go up to $345 and you still must complete $4,995 in Wagering Requirements. You are expected to lose $249.75 of your new bankroll doing that, and finish with a total balance of $95.25. In other words, even after that decent hit, you are still expected to lose ALL of your bonus and $4.75 of your deposit.
So, how much is added play time worth? That’s a question only you can answer. It’s worth nothing to me as I don’t make a deposit unless I have an expectation of winning in the first place. Again, some players might put a premium on free time and still want a Negative Bonus, whereas others may want the freedom to cash out pretty much any time they decide to do so.
If you absolutely insist on playing a Negative Bonus, then there isn’t a whole lot I can do for you. If you are, quite simply, expected to lose money, then there is nothing I can do that will change that for you. However, if you do insist on playing Negative Bonuses, I will offer the following tips:
I would recommend that you be prepared to look at the math of your remaining bankroll and playthrough requirements at all times and be willing to switch games if you find yourself with a confident expectation.
Using Craps as an example again, let’s say that you took a 100% Bonus with a 40x playthrough on slots, but Craps contributes 25%, (essentially a 160x playthrough) then there might come a point where your expectation on your remaining play is positive if you are willing to switch games.
Let’s say that you have deposited $100, received a Bonus of $100, have a total starting bankroll of $200 and have completed half of the wagering requirements. Your current bankroll is now at $260, (for the sake of argument) however, you still have $4,000 to go on your slots playthrough requirements for an expected loss of $200. That means you expect to finish with a total of $60, for an overall loss of $40 of your deposit.
However, with 2x Odds, you would need to make a total of an expected 16000/11.6667 = 1,371.42 (1372) total Pass LIne bets to complete the bonus, which is $6,860 in Pass Line bets. The expected loss on that is 6860*.0141 = $96.73, which means you will finish with a total bankroll of $163.27 for a PROFIT on deposit of $63.27.
The overall Bonus was still negative, of course, if it started negative then it is negative, but by willing to switch off of slots to a game with a lower expected loss you at least took advantage of being at a point where you expected to profit on your deposit.
This is kind of the same as #1, but really, you should have selected the game that (given the RTP and playthrough requirements) had the lowest Expected Loss in the first place.*
*That’s not always true. For example, there are some bonuses with the playthrough requirements so high that playing a low Variance game (such as Craps) results in complete hopelessness when it comes to finishing with a profit. Given the fact that there is no possibility for a huge hit relative to your average bet (assuming flat betting) the House Edge on Craps is arguably more likely to grind you down, depending on the circumstances. In other words, sometimes even with a HUGE playthrough requirement, you can get extremely lucky on slots, on Craps, not so much.
Personally, I think that every Bonus should either have an expectation of profit (however small) or a zero expectation or it is not really a bonus at all. In many cases, Bonuses actually come to harm slot players because, when they do hit something decent, they continue to grind out the slots against the House Edge and still have an expectation of losing some/all of the deposit.
Besides that, it is very easy to determine a playthrough amount that yields a zero expectation Bonus. For example:
Let’s go with our same 100% Deposit Match Bonus on Craps. We know that the average bet is $11.6667, with 2x Odds, and we have a starting bankroll of $200. How much in total playthrough would it take to result in a breakeven bonus?
First, we figure out the overall House Edge of the total amount bet combined PL and Odds:
The Expected Loss on any given PL bet is .0705 on a $5 bet, so we have to take a look at the combined Expected Loss based on the probabilities of betting particular amounts:
With an average bet of $11.6667, we have .0705/11.6667 = .0060428399 or a combined House Edge of 0.60428399%. Now, I have to figure out exactly how much the player would have to bet, based on that average, to lose exactly $100:
100/.0060428399 = $16,548.51058 or $16548.51.
Okay, so now what I want to do is round up to the nearest solid multiple to determine how much in playthrough requirements that means. We would do it in multiples of 200, because we are basing that on the total deposit + bonus, so:
16548.51/200 = 82.74255288.
Therefore, if I want to give the player a very slight disadvantage, I will make the total Wagering Requirements 85x. If I want to give the player a very slight advantage, I will carry out the Wagering Requirements 80x. Let’s take a look how each of these works:
Wagering Requirement: $16,000 (80x)
16000/11.6667 = 1,371.42 (1372)
Total Pass Line Bets: 1372 * 5 = $6,860
Expected Loss from PL Bets: 6,860 * .0141 = $96.726 ($96.73)
Expected Player Finishing Bankroll and Profit: $103.27---+$3.27
Now, let’s take a look at a Bonus of 85x:
Wagering Requirement: $17,000 (85x)
17000/11.6667 = 1,457.139 (1458)
Total Pass Line Bets: 1458 * 5 = $7,290
Expected Loss from PL Bets: 7290 * .0141 = $102.789 ($102.79)...-$2.79
As you guys can see, it’s very easy for an online casino to figure out the best possible game a player could play and adjust the Wagering Requirements of a Bonus such that the player comes very close to a breakeven expectation. If I owned/operated an online casino, that is certainly what I would do. The player gets the playtime he/she wants, but is not expected to profit any meaningful amount.
Of course, bet structuring would be a possibility here, but I would address that via Bonus Terms rather than making vague threats in my T&C’s. I would simply not allow the player to make any initial bet greater than $5 while playing the Bonus, problem solved. The House Edge on the high variance bets is expected to grind the player down.
Even if the player did expect to profit, it wouldn’t be very much and hardly worth the time unless the player really enjoys online Craps anyway. For example, 1,458 Pass Line Bets would take 16.2 hours at 90 bets per hour, which is absolutely blazing through it! Even if the player could expect to profit something like $100, would the $6.17/hour really be worth that player’s time? Probably not for most players.
Another thing I am tired of is expressing Wagering Requirements on (Non-Slot) games as a percentage of playthrough because it confuses most players. Just say how much it is. If a Bonus has a playthrough requirement of 35x on Slots, for example, and Craps contributes 10%, then just say the playthrough on Craps is 350x. Why confuse the players unnecessarily?
Anyway, I understand Negative Bonuses from the casino’s perspective because they give the player more playtime and ultimately still result in a negative expectation. I understand them (I guess) from a player’s perspective because they inherently increase the amount of playtime a player should get based on a particular deposit amount.
The only ones that I truly hate, I suppose, are the ones in which the player is expected to lose his/her entire deposit before completing the playthrough requirements. Either that, or the player is expected to lose so much as to not have enough to make the minimum withdrawal, if he/she chooses to do that. In my view, an expectation of losing everything shouldn’t even be allowed to be called a, “Bonus,” and that should be handled by any applicable licensing jurisdictions to disallow that.
If you guys are going to take anything away from this, it should be that most bonuses, no matter how nice they look, do not have an expectation of profit. The majority of bonuses, whether via playthrough or other Terms, are structured such that you are expected to lose...sometimes your entire deposit.
The only thing that a bonus guarantees to do is to give you an expectation of extended playtime. Of course, playing on the, ‘Play for Fun,’ mode also does that because you could theoretically play until you die. Naturally, when we make a money deposit, we want VALUE. Being expected to lose your entire deposit IS NOT VALUE because you are expected to do that anyway in a negative expectation game, with or without a bonus.
Besides that, should there not be considered to be some value in the ability to cash out whenever you want? Especially if you are expected to lose your entire deposit either way?