How to Calculate the Value of Casino Bonuses

Coins, Casino, Chips, Cards, King, Ace, Slots, Roulette

Have you ever wondered what you’re really getting when you claim a casino bonus? My guide on calculating and improving casino bonus expected value can help with that!

I show you how the math behind casino bonus expected value and how to find the best deposit bonuses possible. I also show you how to improve your chances of walking away with some cash when using welcome bonuses.

How much are casino bonuses worth? The answer is it depends. Let’s look at the finer details.

What Is the Expected Value of Casino Bonuses?

Before I specifically explain what casino bonus EV is, I need to make sure you understand what expected value means.

If you’re familiar with the concept, feel free to skip this section and go straight to the next one.

Explaining Expected Value

Expected value is a simple concept in probability. It describes the average outcome of a random event. It can help you determine how profitable it will be to make certain wagers or gambles in the long term.

Let’s look at applying expected value to a simple even money coin flip game. This keeps things simple and will clarify the concept because coin flips have a true 50/50 outcome over the long run.

You need to know the following:

  • The odds of each outcome.
  • The payouts linked to each outcome.

In our example, we’ll take a wager in which a coin flip pays $1 if you win and costs you $1 if you lose. There’s no built-in edge here. You have as much chance of winning as you do of losing any given flip.

Using the numbers outlined above, the next step is to perform a simple calculation.(½)*1 = 0.5(½)*-1 = -0.5Total sum: 0And so, the expected value of this game over the long run is $0. Refrain from assuming this to hold true in the short term: variance produces results that could see you up or down by a lot, but over a long enough timeline, everything will revert to $0.How to Calculate the Expected Value of Casino BonusesNow, let’s take the concept of expected value and apply it to casino promotions. When doing this, you’ll need three key pieces of information.

  • Wagering requirements: the number of times you have to roll over the bonus before it’s transformed into cash you can withdraw.
  • The house edge of the game: the advantage of the casino (for example, 2.7% in European roulette).
  • The bonus size: the amount of bonus cash you receive.

All you have to do when you have this information is multiply the house advantage by the wagering requirements.For Example

Imagine you grab a 100% first deposit bonus of $500 that you need to wager 20 times which is $10,000 in bets. You pick a game with a 3% house edge.

The formula is simple: $10,000 x 0.03 = $300So, you can expect to lose $300 when wagering this bonus. Now, subtract that from the total bonus size to see if it will be profitable.Just subtract $300 from the initial $500 you received, and you’ll have $200 as the expected value.Remember, variance plays a role here. Your actual results may differ wildly from the above calculation. Nonetheless, that’s the formula for calculating the expected value of casino bonuses.Wagering RequirementsIn case you don’t already know, allow me to explain what wagering requirements are. Almost all casino bonuses have them. They are the number of times you’ll have to wager a bonus before you can withdraw it and any associated winnings.For Example

Let’s say a bonus has 20x wagering requirements, and you deposit $1,000. You’ll have to wager $20,000 before you can withdraw the bonus cash and your winnings. You can always find information about the wagering requirements in the bonus terms and conditions.

House EdgeI also mentioned ‘house edge’ in my equation above. This is the mathematical advantage the house has in the game you’re choosing to play.For Example

Let’s say you are playing an online slot machine with a house edge of 3%. That means that for every $100 wagered on that machine, the casino will make $3 over the long run.

As you’ll see in the next section, playing games with lower house edges helps a lot when it comes to improving casino bonus EV.How to Improve the Expected Value of Casino BonusesNow that you understand what casino bonus EV is and how to calculate it, let’s look at how to improve it.As you might already have figured out, it comes down to playing games with a lower house edge and finding bonuses with low wagering requirements.Play Games With a Lower House EdgeThe house edge of casino games varies wildly. Even a simple choice, like whether to play European or American roulette, can have a dramatic impact.In this example, European roulette has a house edge of 2.7%, whereas the American variant has an edge of 5.26% thanks to the extra zero pocket.Tip:

The same applies to slot machines. Jackpot slots tend to have a much higher house edge than their standard counterparts. It’s better to play slots with a low house edge. Some have a house edge under 2%, whereas the majority have one in and around 5%.

Most jackpot slots will be prohibited in the bonus terms of use anyway, which brings us nicely to the next point.Read the Terms of Use CarefullyThe terms and conditions of casino bonuses will tell you everything you need to know about them.For example, you’ll find out the wagering requirements, the game weighting, the permitted games to play, and more.I’ve already explained the wagering requirements above, but let me explain the other two here.First, game weighting tells you how much of your wager counts towards meeting the wagering requirements. Typically, slots and keno count 100%, whereas games like blackjack and video poker can count only 10% or not at all.Second, almost every casino bonus has permitted or restricted games listed in the small print. The no deposit bonuses may be linked to specific games, such as a newly released slot, or they may prohibit you from using bonus cash on certain games.You need to know what games are available to you, so you can calculate the bonus EV properly and pick the most profitable ones.Play at Reputable Online CasinosBy far, the best tip on how to improve casino bonus expected value is to play at the safest online casinos. There’s not much point in learning all of this and improving casino bonus EV if the operator will behave dishonestly when it comes time to pay up.We’ve reviewed, ranked, and rated all of the best online casinos on the page linked above. You can be sure you’ll have a good time playing safe games with a fair chance to keep what you win.

Outcome Odds Payout
Tails 1/2 $1
Heads 1/2 $1
Petko Stoyanov
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About Petko Stoyanov
My name is Petko Stoyanov, and I've been a gambling writer for more than ten years. I guess that was the natural path for me since I've loved soccer and card games for as long as I can remember! I have a long and fairly successful history with English Premier League betting and online poker, but I follow many other sports. I watch all big European soccer leagues, basketball, football, and tennis regularly, and I keep an eye on snooker, volleyball, and major UFC events.