Online casino signup bonuses aren’t as good a deal as you think

Online casino signup bonuses

These offers are there to incentivize new players to sign up and gamble. They seem, at first glance, anyway, to be a can’t-lose situation.

The reality is not as pretty

Here’s how most online casino signup bonuses work:

You deposit a certain amount of money, and the casino matches those funds at a certain bonus percentage. For example, you might be playing at a casino with a 200% matching bonus worth up to $400.

  • This means that when you deposit $200, you get a $400 signup bonus.
  • Your total bankroll is $600.
  • This seems like money for nothing, and it is—sort of.

But casinos don’t want to be taken advantage of. Early advantage gamblers quickly did the math on these kinds of promotions and figured out that they could use the extra funds to get an edge over the casino.

In the early days of Internet gambling, wagering requirements for cashing out were minimal. You were generally only required to wager your entire deposit plus bonus once before cashing out. In the case of the example I’m using now, you’d need to make $600 in wagers before being eligible to cash out.

But suppose you’re playing blackjack. It’s not even an especially good blackjack game, either—the rules are set up so that the house edge is 1%.

You wager your $600, and your expected loss is only $6. You expect to have $594 left. You cash out, and you’ve made $394 profit, most of it because of the signup bonus you got.Online casino signup bonuses

So casinos started raising their wagering requirements. For a while, wagering requirements were more like 12X or 15X your deposit plus bonus.

So instead of having to wager $600 before cashing out, you might have to wager $7200 or $9000.

But smart blackjack players would still have an edge. 1% of $7200 is still only $72. 1% of $9000 is only $90. That still leaves the bonus player with a significant profit.

So casinos decided to start disallowing wagers on games with a low house edge. In fact, at most Internet casinos, only wagers placed on slot machine games count toward fulfilling your wagering requirements.

And the wagering requirements themselves have increased over time, too.  Now it’s common to find casinos who require you to wager 25X, 35X, or even 50X your deposit plus bonus before being eligible to cash out.

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What effect does this have on the expected value of your bonus?

  • I’ll be generous and assume that the online casino in this example has slot machines with a 95% payback percentage. That means the house edge is 5%.
  • I’ll also assume that this casino skews toward the lower end of the wagering requirements and only demands that you bet 25X your deposit plus bonus.
  • 25 times $600 is $15,000 in total wagers. 5% of $15,000 is $750.
  • Since you started with a bankroll of $600, your expected winnings are -$150.
  • And most casinos have higher wagering requirements and a lower payback percentage on their slots games.
  • Don’t get me wrong. Free money is great, and you can still come out ahead when using a casino bonus. But that bonus doesn’t give you better odds of walking away a winner at all.

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