How bonuses affect online casino industry

Discussion in 'Casino Industry Buzz and Terms Alerts' started by MissExposé, Apr 18, 2019.

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    MissExposé

    MissExposé Active Member Staff Member

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    “Bonuses are just an expensive cost of sales that we have to deal with because that’s the way the system works”

    "Affiliates generally work on revenue share deals. The revenue that is shared is based on:

    • Gross gaming revenue (difference between player wins and losses)
    • Minus bonus costs (the Tier 2 operators, 25-35% of gross gaming revenue)
    • Minus game provider fees (If it’s a casino, the people who provide the slots, etc.)
    • Multiplied by the revenue share percentage agreed.
    The average revenue share deal would be roughly 35% and as mentioned previously the total cost of affiliate revenue share for an operator is about 25%.

    Now imagine there’s an operator who does not give out bonuses and converts very well for you. That operator is going to make you 25-35% more income than those other operators pushing bonuses.


    The catch, of course, is, that players expect free money – and every player who wants free money is taking money from you as an affiliate."

    Full article by Nick Garner could be found on this link.
     
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    danniee

    danniee Affiliate Guard Dog Member

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    It's a catch 22 for sure. There are too many bonus abusers out there who ruin the experience for everyone - operators, affiliates and ultimately the players. Without bonuses, we can expect a bigger cut of the income, but at the same time, bonuses are a big incentive for players to sign up through affiliate links I think.

    In Sweden, operators are starting to move towards cashback instead. Maybe that is a better solution.
     
    Last edited: Apr 18, 2019
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    Corriens

    Corriens New Member

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    I have seen some people are encouraged themselves joining in different casino games because of sign up bonus.
     
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    CL-Ed

    CL-Ed Affiliate Guard Dog Member

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    I've been saying this and more for about 10 years so its nothing new. The entire industry - players, affiliates, and operators included - is dependant on bonuses like a drug addict on heroin. On the balance I don't think bonuses are good for several reasons:

    1. They encourage player churn as they move between casinos to get the bonuses. Unless they are coming back to your site over and over to choose a new casino your player value is low. This is bad for both operators and affiliates.
    2. They are the number one cause of disputes and player disappointment, and probably significant support and training costs for operators.
    3. They are mostly used these days to lock players in to wagering more than they would like to and reduce their chances of withdrawing after a win.
    4. The only thing most casino operators do to try to differentiate themselves in an over-crowded market is their bonus. We have a form we ask casinos to fill out when they approach us to be reviewed and it asks them something like what makes your casino different or better from all the others? Its their chance to tell us why they think they are so great, but 9 times out of 10 they respond with something about their bonus. And we roll our eyes...
     
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    Sonia Bilton

    Sonia Bilton New Member

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    I enjoy playing in online casino sites from time to time. I really enjoy playing slots games online and sometimes I play video poker. It is important to find a free welcome bonus no deposit required casino uk. Good and reliable casino sites make that your money will be safe and casino will not cheat you. Good Luck!
     
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    AussieDave

    AussieDave 19 years & still going!

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    When I 1'st played at an MGS casino (1997) the play thru on a bonus was 1x (no game restrictions).
    • By the year 2000, it had reached 4 - 6x.
    • Since then bonuses play thru have steadily increased, and additional rules applied, including game restrictions.
    These days, 30x is standard practice, and even some slots (100% games of chance) are restricted. While some casinos require players to wager both the bonus 30x and the deposited cash 30x. Worse, they make the bonus sticky.

    The industry waffles on about bonuses, but fact is, bonuses are just a way to lock players into unrealistic T&C's. Given the aforementioned, casino then turn around and use this pearler.... "In the interest of fair gaming"...

    Let it be known, there's nothing the least bit fair about these ridiculous wagering requirements!

    While I offer bonuses on site, my advice to visitors is... "don't play with a bonus."
     
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    AussiePunter

    AussiePunter Member

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    Seeing a lot of hate for bonuses here, first time bonuses, no matter how small increased conversions for me by over 500%, until Australia banned any incentive to sign up, now they get around that with cash back offers and other dirty tricks, so they're still essentially giving punters "bonuses" which are taken out of affiliate earnings, just making initial conversions more difficult, and then at the same time increasing the amount of FTD's required to keep your account.
     
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    Joey Grey

    Joey Grey Affiliate Guard Dog Member

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    This is a good question here, I enjoy bonuses and playing around is really fun. :) Sometimes it's a good marketing strategy, after all, the thing is how far can you go on playing. Your insight is good by the way. :)
     
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    Derek Warner

    Derek Warner New Member

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    I've been looking for this, and I myself enjoy most of the sign up bonuses! :D
     
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    Niklas

    Niklas Affiliate Guard Dog Member

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    AussieDave

    AussieDave 19 years & still going!

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    These days I strongly disagree. Once (literally years and years ago) you could use the leverage of "free spins" to encourage players to signup, they'd receive a $25 free chip, and usually they'd go on to make further deposits. These days though, (no deposit) "free chips or free spins", more often that not, see people signup (win or lose) who have no intention to deposit.

    Unless it's a last resort, only then will I throw up a casino who has a no-deposit-bonus. Personally, I try to avoid promoting such venues like the plague. I'm seeking to signup players who actually want to deposit their own money, and gamble.

    Anything else, I'm really not interest in.
     
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    Biti

    Biti Affiliate Guard Dog Member

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    I guess no serious player is interested in 10 free spins of € 0,10 with a wagering of 70, a max. cashout of € 10, etc.
     
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    NDG

    NDG Affiliate Guard Dog Member

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    I don't see a problem with no deposit bonuses. Yes, they bring in a lot of sign-ups that don't deposit,
    but they also bring in some big players. There are new people interested in "online casinos" everyday,
    and this is just one way to scoop up those players and hope that they enjoy the experience and deposit.

    I agree that a serious player is not going to be interested in that type of bonus, but the free bonuses are
    for those that need the extra push to try out the casino, and then maybe they will become a serious player.
     
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    AussieDave

    AussieDave 19 years & still going!

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    @NDG - IDK I must being doing something wrong, cause after 19 years, all I get are freebie bonus hunters.
     
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    Bethany Mcmillan

    Bethany Mcmillan New Member

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    'Bonuses' is kind of a huge marketing effect as always. It's like people are expecting it, and if you cannot see it you might be thinking that this site isn't even legit because they don't have the usual bonus spins. And it just give a little spice for the first timers.
     
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    Joonas

    Joonas Affiliate Guard Dog Member

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    If the offer was the reason the player joined as a customer, then any percentage of profit is better than no profit. "cost of sales" as Nick put it - perhaps there wouldn't have been a sale was it not for the offer.

    It's similar to saying that paying to affiliates is a "cost" when the truth is that the operator would not have the player was it not for the affiliate, the player would have been forwarded somewhere else.

    This sounds pretty similar to confusion with bonus tax, which I wrote about a while back https://calvinayre.com/2018/11/02/business/understanding-bonus-tax/. "This, in turn, means that casino brands are not using bonuses to their full potential, mainly because they are unsure what tax liabilities they will face when offering them to players. The impact this is having is significant, and is putting the brakes on their own player acquisition activities as well as those of the affiliate partners they work with." I always encourage partners we have on Bojoko to utilise bonuses.
     
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    Rhondagrace

    Rhondagrace gotaslotonmymind

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    I was always attracted to welcome bonuses. not really the ndb, but match offers, with a 25-30% rollover. deposit $50 get 150% match play with $125, I'm more likely to have a longer playtime. and have a better chance of cashing out if I get lucky.

    I mostly only play RTG. cause I can't really play anything else. some rival I like and betsoft. but again I need a bonus cause I don't have a lot of money to deposit. and don't want to risk a lot. but, unfortunately, there are ALOT of bonus abusers out there. Ex: I had 275 signups at one affiliate program for August. not one depositor. zilch, zero, nada. Lol. oh well... can't win all the time ; )
     
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    LA-Martyn

    LA-Martyn Affiliate Program Representative

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    I'm not a fan of free chips, I prefer free spins but I see their benefit. At the same time I see their detriment.

    Welcome offers are loss leaders and required to bring in new players to a casino. If constructed well, you can nurture a player through to becoming a settled player and hopefully profitable.

    Chuck a free chip in the mix and the player plays for free, keep chucking free stuff at a player and you teach them bad habits. This is where the industry failed a long time ago, in order to get that competitive edge, brands would chuck money at players. But then they began to rely on this free money. So when the accounts team or casino manager finally realise that the players didn't play without free cash it's too late. They move on to the next casino and get more free stuff.

    As soon as you put in a free chip to attract new players, you instantly lower the value of that player, which also hits the amount you earn as affiliates. You find savvy bonus hunters and that's about it.Conversions drop, affiliates are disappointed with performance and it snowballs.

    To make a change, we as an industry need to change the habits of players that rely on bonuses. They have their uses for retention purposes, so there is a place for them but brands need to be aware of the volume of non cash that they have floating about.
     
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    AmyWilson

    AmyWilson Affiliate Guard Dog Member

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    Bonuses are something like psychological dependence and attracting players, I doubt that casinos are ready to give out their money just like that. Everything makes sense. But at the same time, this strategy with various bonuses works.
     

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