Online Casino Bonuses: Has The Bubble Burst for Casino Operators?

16 July 2002

Online casino bonuses were originally initiated as a financial inducement for new players to open a real account at a certain casino and gamble.

Think back just a couple of years and recall what the bonus situation was like--mainly simple, small cash rewards offered for opening a real account and depositing.

Nowadays, bonuses are more competitive than at any point in online gaming history and they have become increasingly lucrative and complicated. Percentage bonuses, no deposit sign-up bonuses, monthly bonuses, minimum wagering requirements and match bonuses have become standard fare at many casinos.

The players are having a field day in these favorable conditions. But when is enough really enough? How long can casinos afford to offer such extravagant bonuses, and is it really in the best interests of the casinos?

If you talk to any casino operator at the moment, you can bet they will have a huge gripe about bonuses and the players who are exploiting the market conditions. Words like “bounty hunters” and “bonus abusers” are thrown around to describe players who sign up, receive a fantastic little bonus, meet the minimum wagering requirements playing 50-50 games and then cash out with a tidy sum.

Casino operators claim such activity is not within "the spirit of the rules," but conversely, players say they don’t make the rules, they just play by them. It’s hard to argue with such logic and ultimately, when money is involved, there will always be players trying to exploit conditions as advantageously as possible. Surely then, the onus is on casino operators to rein in the bonus explosion and restore equilibrium to the player-casino relationship.

At present, there is a school of thought that professes that casinos are not attracting many "new" players as such, but merely swapping players with other online casinos. They may have a point. There are lots of players who will happily ride on the casino merry-go-round, picking up bonuses left, right and center without ever intending to park their cash at a casino for any great length of time. But players are only able to do this because the casinos themselves have provided this opportunistic environment. In the future, casinos may need to cooperate with competitors to scale back bonuses for each others' mutual benefit.

Land-based casinos do not have this problem. If you pop down to your favorite casino, no one hands you $20 just for walking in the door. But this is the situation currently confronting the online casino industry. Online casinos may need to consider alternative methods to attract players, encourage loyalty in gambling and restore fairness to online gambling. Unfortunately, there is still general skepticism about the trustworthiness and security of gambling online, which has forced casino operators to provide greater inducements for players to play. Online gambling has other benefits that could be emphasized more--gambling in the comfort of your own home, a huge variety of games, no time pressures, no huge parking fees, no annoying drunks. People should be attracted to online gambling because of the customer service, fast payments, range of games and exciting promotions, not because of the prospect of a "free lunch."

Another problem with bonuses is that they cause inevitable friction between players and casinos. The bonus phenomenon has reached the stage where the potential for casino-player enmity arguably outweighs the dubious commercial benefits. Players should not be punished by the casinos for depositing and wagering in accordance with the casino’s minimum requirements. Realistically, if the requirements are not stringent enough, that is the casino’s problem, not the player’s. Alternatively, casinos have every right to crack down on bonus abusers who are fraudulently signing up under multiple identities or taking advantage of casino contests.

Bonuses may be part and parcel of online gambling, at least for the foreseeable future, but there comes a time for restraint, reason and old-fashioned common sense. Simply put, outrageous bonuses are hurting the bottom line of casinos too much. Sure, competition within the industry is healthy, but it seems that among casino operators, no one is really winning anything in the bonus war. No one wants collusion, or boring standardized bonuses across the board, but surely it’s in the best interests of everybody if bonuses return to normal range. After all, most online casinos boast payout percentages above 95%, even as high as 97-98%. The players are already getting a fair deal, and most casinos have a firm and ongoing commitment to player support, fast payments and loyalty programs.

Smaller and less experienced casinos can easily get caught up in the bonus extravaganza, but how many of them can afford it? It is not healthy for the industry in general if the bonus war puts operators out of business completely. Internet users will not be inclined to trust the industry if casinos are closing down all over the place. Surely, it is not good business practice for casino operators to pay out as much as $150 just to swap players with another casino!

There probably won’t be any easy answers, but perhaps by putting more attention on player loyalty programs, casinos can keep players in the long term. Why not offer great deals to players who have consistently deposited at a casino for an extended period of time? Casinos seem quick to attract new players and sometimes forget the benefits of encouraging players to dig in for the long haul. Why not give the players great bonuses once they have proven their loyalty? These are the players that every casino wants to have, so why not reward them for their loyalty properly?

Let’s restore some credibility to the player-casino relationship and rein in outrageous bonus schemes that ultimately only harm the online gaming industry. Like chocolate or alcohol, bonuses are good in moderation. Hopefully, casino operators can see the benefits of cooperation in this respect and come to some sort of understanding regarding online casino bonuses.

Mary-Ann Dick is the founder and managing director of, a full-service e-marketing firm specializing in the marketing of casinos, online sports books and other online entertainment products. Prior to setting up ispye, Mary-Ann was the marketing director of Captain Cooks Casino and was instrumental in its successful launch in 1999. In her capacity as managing director, Mary-Ann has been involved in all facets of online gaming including campaign management, Web site development and design and business consulting.