The Influence of Bonuses and Wagering Requirements on the Economy of Your Gambling Platform
A successful online gambling platform usually takes advantage of all possible promotional means available at the market. The more advertising tools are involved, the more popular the platform can potentially become.
Bonuses are one of the most efficient ways to attract new players and can also help retain the existing ones. At the same time, a knowledgeable operator must be aware of how to calculate the ideal bonus system to stay profitable and make the players impressed.
Online Casino Market is ready to deliver another insightful guide on creating an online gambling platform. This time, we will dive into the topic of bonus system management and advantage play. The way you introduce your promotional strategy to the customers defines the volume of your traffic directly.
Among all available advertising tools, this one consists of virtual and conditional money allowing players to try particular games without the risk of their own funds. Bonuses can be of a different form and purpose and usually vary depending on an individual platform. In the modern competitive gambling industry, this promotional tool became a vital step in gambling activity and an ordinary player’s expectation.
Bonuses are applied for multiple purposes, including acquiring new players, retaining the existing, and even returning the former clients. In any case, they can be used for increasing your KPI, particularly:
- boosting your deposit volume;
- expanding the gaming process;
- raising the number of bets on particular games.
The usage of bonuses implies both an increased profit and, at the same time, an increased risk. Specific game weights, as well as wagering requirements, allow the casino owners to increase the number of bonuses received by players once the conditions are met. At the same time, such a strategy makes it possible to control the offered bonus campaigns without fear of going bankrupt.
Your task is to offer a proposal that is difficult to reject. Meanwhile, you do not immediately inform about all the limitations that a player should meet before receiving maximum benefit from this money. Once the first stage of redeeming the bonus is completed, you provide further explanation of the conditions.
Let us illustrate this pretty quickly. Usually, an offer will sound like this — a 100% bonus on the first deposit of $300 and more plus 250 free spins. Surely, such a proposal will attract a new player. Once the registration is made, you give further explanations about the conditions, underlining that spins work only with a particular activity and are provided day by day.
After that, you offer them further details that will allow using the bonus to its fullest. Here is an example of what a full explanation of a bonus looks like:
- only for newly registered players;
- 20 spins after the registration;
- 180 spins after depositing during the following 9 days (20 every day);
- spins and bonus funds must only be spent on particular games;
- the total betting amount must be 15 times higher before a player can withdraw the bonus money.
Such conditions are called essential distinguishers. They will let you obtain the necessary number of players, as you will not worry about excessive expenditures. In general, you must learn to leverage the proposition that will be profitable to you and attractive to players.
That is why the thorough calculation is essential to ensure that you do not spend extra money without any benefit for yourself.
Once all conditions are completed, a player can finally get the advantage of the bonus money you offered them. Such necessary provisions are called Wagering Requirements. Your clients see the bonus funds as a potential profit that they will attempt to turn to real funds to get to their account afterwards. If you manage to evoke such a mindset in your clients, they will play at your platform repeatedly. The amount converted from the gifted money to real funds is called Bonus Achieved.
At the same time, the process of converting the funds can be different from platform to platform. Some tend to offer no difference between bonuses and players’ money, while others separate these two notions. Consequently, we derive two types of bonus engines.
This bonus engine separates gifted funds and deposits during the gaming process. With such segregation, you can control the release of real funds.
The particular bonus engine operates as a unified balance system, including gifted bonuses and real funds. It allows conditioning the balance to the wagering limitations as a whole.
The essence of the segregated balance is the potential of tracking the sources of money during the entire transferring process. This type of engine is able to distinguish which funds were deposited and which were presented as a gift. As a result, the possibility to identify the source lets the casino owners impose the wagering limitations just for gifts.
Meanwhile, the merged balance is unable to distinguish between deposits and gifted money. The main drawback of this engine is the appliance of the wagering limitations to the whole sum on the account.
While an operator calculates the GGR, it is essential to deduct the extra costs from it. Therefore, the choice between the segregated and merged balances becomes critical. While working with a merged engine, there are no distinctions between the real funds and bonuses. It can cause extra expenses as, in this case, an operator has no idea how much bonus money has to be excluded from GGR considering taxation. At the same time, the segregated balance makes it possible to see the exact amount of money converted from the gifted funds.
Among all possible promotional campaigns, bonuses are probably one of the most variable types that the operators can afford to adjust.
Depending on the platform’s strategy, there are 5 main types of bonuses with the examples:
- Match Bonus — if a player deposits $200, he gets an additional 100% as a bonus.
- Fixed bonus — if a player deposits $50 or more, he gets an additional $25 as a bonus.
- Free Spins or Bets — when a player registers, he gets 200 free spins (20 spins every next 10 days) for certain games.
- No Deposit Bonus — a player receives $10 for registration without a necessity to deposit funds.
- Cashback or Rebates — the casino offers players the return of a certain sum of wagered funds.
The conditions and limitations of wagering are installed to grant the platform margin has enough time to bring profit and is not abused by unlawful players. Wagering restrictions are pictured as a certain number of times that clients are asked to replenish their account before they can turn the bonus money into real funds.
After the required number of bets has been made, the remaining bonus gets turned into real money and can be withdrawn. Conditions on bonuses are directly linked to their kind and possibilities.
Every casino activity has its own theoretical Return to Player that is installed individually and influences the revenue directly as well as convergence into real money.
For example, the average theoretical RTP on the trendiest games:
The problem here arises as bonuses meet RTP. For example, a player gets a $250 gift with a wagering requirement standing at x35. It basically means that if a player wants to convert bonus funds into real money, he will have to wager $8,750 worth of bets. With an average margin of slots being around 3.5%, to withdraw the bonus, a client must lose $8,750 * 3.5% = $306. That is beneficial for an operator indeed.
However, with a hold on BlackJack being around 1%, the calculations are a bit different. A client will lose just $3,000 * 1% = $88, meaning they will have $1620 profit on average. In order to solve the problem, the wagering requirements also use game weight to limit their contribution.
Thus, for slots, this sum remains unchanged (application of 100% game weight) since the hold is profitable by itself. BlackJack will use a 20% game weight, meaning instead of wagering $8,750, a client will have to wager $43,750 in order to convert the bonus money into real funds. So, the final formula is:
E(bc) = (Total Wagering Requirements / Game Weight Percentage) * Margin
As you include bonuses in your promotion, you commit yourself to financial liability. Therefore, you must understand how to lower risks. While dealing with gifts, you have to pay attention to the estimated value (Ev). The thing is that it must be negative if you want to lower risks. A positive estimated value implies the profitability of the offer for a client in the long term.
Here we attempt to calculate the Ev of any gambling activity on an example using the formula:
Ev = (Bonus Amount - E(bc)) / Bonus Amount
A client gets a $250 bonus for slots with the wagering limitations x15 until it is possible to convert it. The average margin for slots is 5%, meaning a client will can turn $250 - ($3,750 * 5%) = $62.5 as a result. The estimated value is calculated as ($250 - $187.5) / $250 = 0.25 Ev.
The result implies that the gaming environment has a positive estimated value for a particular bonus. In order to lower this risk, you must raise the wagering limitations, for example, x25, meaning 5% hold would be beneficial for the casino: $250 - ($6,250 * 5%) = -$62.5. The estimated value is calculated as ($250 - $312.5) / $250 = -0.25 Ev.
Bonuses are your primary promotional tool that will attract a significant part of your traffic. It is essential to understand and calculate everything accordingly to ensure your system brings you profit and does not drive you into a bankruptcy pit. As a result, we suggest resorting to proficient guides if you have no experience of working with similar activities.
Online Casino Market proposes you to order our turnkey online casino solutions that also include bonus management and guidance, in particular:
- an in-depth definition and purpose of bonuses;
- how bonuses are offered to your clients;
- differences in combining bonuses with real funds;
- variations of bonuses;
- peculiarities of advantage play.
The theoretical background is a necessity, but the experts’ guide will be of much more beneficial help for you. The next article will be devoted to other player engagement processes. Meanwhile, if you have any questions about any stage of organizing an online gambling platform, feel free to contact our team.
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