The Math of Casino Bonuses

Almost all online casinos offer bonuses to their players. As online casino gambling has become more popular, more and more online casinos are being launched all the time. There is much competition between these online casinos and they use bonuses as a way to attract new customers and to retain their existing customers. Many of these bonuses can look attractive, but always keep in mind that there are conditions attached to them. You must do your math before you accept any online casino bonus offer to make sure that it suits you.

Wagering requirements are the limitations and conditions that are placed on the casino bonus by the online casino. These wagering requirements will stipulate the amount that each game counts towards fulfilling the bonus conditions. They will stipulate how much you need to wager before you are able to withdraw your winnings and they will stipulate the type of bonus you are accepting regarding whether the bonus amount can be withdrawn or not. Until you fulfill the wagering requirements for the bonus, you will not be able to make a withdrawal. The wagering requirements differ between casinos and between bonuses so you must make sure to read them carefully and do the maths before you accept the bonus.

Types of Casino Bonuses

There are many types of casino bonuses that exist. Some online casinos may offer a large variety of bonus types, while others may offer a limited selection. Some of the bonuses that you may come across include no deposit bonuses, welcome bonuses, reload bonuses, refer-a-friend bonuses, alternative payment method bonuses, VIP bonuses and high roller bonuses. We will need to look at the mathematics of the bonuses to work out if they are, in fact, profitable for the player.

Welcome Bonuses

Welcome bonuses are the most common form of bonus. They are awarded to the player when they make their first deposit at the casino. These bonuses are typically a percentage of the deposit amount up to a set amount. For example, it is common to be awarded a 100% match deposit bonus up to $100. For a bonus such as this, the wagering requirements may set a 30 x play through condition. This means that you will have to bet 30 x $100 = $3,000 before you can withdraw any of your winnings.

When to Accept a Casino Bonus

Whether or not to accept a casino bonus is subjective. It really depends on what you want to play at the casino and how you plan to play. If you plan to only play for a short amount of time at the casino, you will be unlikely to wager the required amount to be able to withdraw your winnings. The same goes if you have a very small bankroll. In addition, the casinos generally limit the games that you can play in order to fulfill the wagering requirements. Roulette is often not accepted so if that is your game of choice, the casino bonus will not be useful to you. On the other hand, if you plan to play at the casino for a long period of time, then the casino bonus may be very useful to you. Casino bonuses, when used to their optimum can be seen as free money that you can use to play at the casino and can really boost your bankroll.

Let's look at the game of slots with an average 95% payout.

If you play with the $100 bonus, you will find that you will only be able to make $2,000 worth of stakes before you have used up your bonus – $100/(1-0.95) = $2,000.

Looking at it from another point of view, if you make the required $3,000 worth of stakes, you will find that you are actually $150 behind - $3,000*(1-0.95) = $150. In other words, not only will you have lost the full bonus amount, but you will have lost a further $50 from your pocket.

In this case, it would not be profitable to accept the bonus. These equations should be done for each bonus that you are offered by an online casino so that you can be sure that you are making an educated decision on whether or not to accept the bonus.

Types of Casino Bonuses

There are different types of casino bonuses and these determine the amount of the bonus that it is possible to withdraw. A casino bonus type that is growing in popularity at casino is the sticky bonus. An uncommon variation of bonus is the cash back bonus. Here we will look briefly at each type of bonus.

Sticky Bonuses

Sticky bonuses are also known as phantom bonuses. The bonus amount cannot be withdrawn – it remains "stuck" in the account until it is lost or is annulled with the first withdrawal when it disappears like a phantom. If you play these bonuses hard, you will have a chance to come out ahead.

A brief look at the mathematics of the sticky bonus tells us that you have a 50% probability of winning. It is recommended for you to set the amount you wish to win. For example, if you deposit $100 and receive $100 in sticky bonus and you want to increase your casino account up to $200, the probability of success is ($100+$100)/$400 = 50%. The real value of the casino bonus to you would be (100+100)/400*(400-100)-100 = $50. This math is for casino games with zero math expectancy. In real casino games, the results would be less favorable.

Cash Back Bonuses

A cash back bonus is a return of your losses and is commonly a partial return over a fixed period of time, let's say 20% over a week. In other words, the cash back bonus is a return on losing that is paid to you by the online casino. This means that if you lose $50, with a partial return of 20%, you will get back $10 or actually only lose $40. This then increases the math expectancy up to 0.4%.