Mission146
Posted by Mission146
Feb 15, 2018

Brief History of How Things Got Where They Are Today

First thing’s first: If you’re one of the many people out there who are categorically opposed to online gambling, then I’d only ask you to stick around to read the next one-sentence paragraph. If you’re not at all interested after that, then by all means, thanks for stopping by and I’ll see you for tomorrow’s article!

If you’re opposed to playing online, then you’re opposed to winning money.

Granted, there was a time when it was much easier to do.

Going back to the middle-to-late nineties, and perhaps into the very early 2000’s, it was almost as if online casinos had no concern whatsoever for the math that went into the bonuses. The bonuses were so juicy back then that there were only two questions:

1.) How much were you going to win?

AND:

2.) Was the casino going to pay you?

There really weren’t much in the way of aggregate review sites such as LatestCasinoBonuses.com, which would be created in 2006. As a result, while the bonuses being offered were through the roof years before that, there really wasn’t a centralized location where people could discuss being, “Stiffed,” by online casinos who didn’t pay out. More importantly, with LCB’s Trusted casinos as well as Wizard of Odds APPROVED websites, you know that you’re getting a fair gamble. In the event that you have an issue that you cannot resolve with one of our APPROVED casinos, and you signed up through this site, the Wizard himself will act as an intermediary in the matter, provided you signed up through one of our sites.

Of course, for every, “Heads,” side of a coin there should also be a, “Tails.” I would be remiss not to mention that many online AP”s found themselves affronted by websites such as LCB because plays are often openly discussed on there that they know and would prefer to remain secret. Some aspects of online gambling aren’t that different from Brick & Mortar play!

Back in the day, there would occasionally be bonuses such as a 200% deposit bonus with 2x playthrough requirements because the casinos either didn’t understand what sort of crazy advantage that afforded the player, or they just assumed the person would continue to play even after the playthrough was completed. At one time, there must have been enough people that either continued to play until their entire deposits were gone, because one would think that the casinos would have closed after realizing that all they were doing was losing money.

To be honest, there were essentially two types of players back then: You had recreational players, who actually were losing the money to the casinos and then you had advantage players who would pick out the best bonuses and beat them. Those same advantage players might continue to get advantageous offers from the casino and would occasionally play some slots and deliberately lose small amounts of money, “Cover play,” to put on a good show.

The casino would just figure the players were winning because they happened to be running well, if anyone really looked into their accounts at all, and they would go on collecting offers. The casinos would eventually figure out that bonuses with single-digit percentage playthrough requirements on table games were just silly, so they would eventually get rid of the most absurdly easy to beat bonuses. In many cases, nobody ever sat and did the math, they just increased the playthrough amounts or decreased the bonuses somewhat. The result is that there would remain offers that while not as good were still really, really, good, by today’s standards.

Eventually, LCB (and others) would eventually create websites to compile and analyze these promotions from all of the world’s reputable online casinos. In fact, LCB even had one of the major sections of its site once explicitly titled, “Bonus Whoring,” and I wrote a page for them with the title, “Casino Whoring.”

A large part of what LCB, and competing sites, did was offer a portal to these other casinos (and their great offers) to players while essentially keeping track of which casinos were generally known to pay, (in general) as well as to pay promptly. While the focus is as much (if not more) on the recreational online player now, there was certainly a time when LCB might have been eighty percent, or more, effectively a site for advantage players. There were certainly, “Bonus whores,” who looked at it.

More importantly than that, the casinos offered then (and still do) some bonuses that are exclusive to LCB click-throughs. That would prove beneficial for AP’s in the early years of LCB (and perhaps other sites) who were able to enjoy offers that they might not have been able to find anywhere else.

The problem wasn’t so much discussing the bonuses, or their terms, but rather discussing the specific ways to best play them to maximize expected value. In fact, many players would eschew the notion of, “Cover play,” and would instead hit them as hard and fast as possible, doing such things as:

  • Playing exactly enough to cover the playthrough requirements, and not a penny more.
  • Taking advantage of multiple bonuses back-to-back without any play in-between.
  • Only playing the advantage play game of choice for best EV and not using any slots (or lesser-paying Table Games or Video Poker games as, “Cover.”

As AP’s kept winning under these conditions, the bonuses continued to decline in response. Perhaps worse still, many of these AP’s would also go on to take advantage of the bonuses by way of the means above, as well as in less savory ways, such as:

  • Having friends/family also take advantage of the bonuses and playing exactly the same way, with the friends and family largely just being confederates for a, “Cut.”
  • When playthrough requirements were set high, but still very advantageous as an overall bonus, many players would set up programs to do the playing for them, so they didn’t even have to sit through the hands/games, whichever was the case.
  • Playing from various IP addresses in an attempt to make it look as though they were a different player. This would also sometimes be the case if the player had a reasonably common name and ID’s with two different addresses.
  • Winning, cashing out, and then initiating credit card chargebacks anyway. (Rare)

For those reasons, the casinos took countermeasures to thwart those sorts of tactics, which recreational players often call into question. I think that many casinos would look the other way to the occasional, “Smart player,” but when a person subverts the entire system in order to have multiple accounts, that’s where they had to start to become strict with their Terms & Conditions.

Among these countermeasures is the strict requirement that two players may not share the same physical address or IP address. The second one worries me a bit for recreational players and AP’s alike, because if they are playing the mobile games (specifically offered by many casinos) on a public connection, then they may end up playing from the same IP address another person once played on without even knowing it.

For that reason, while mobile casinos are certainly convenient, I would only use secure private connections to play. For example, if you’re at a friend’s house, then you might ask if any of them have ever played, or plan to play, at that casino. If not, then you could play from that connection. In contrast, I would avoid Internet connections at casinos, doctors offices, hotels, restaurants...basically any public venue. That sucks, obviously, because, “Gaming on the go,” is really the explicit purpose of the mobile version of the casinos. Better safe than sorry, though.

It’s also for that reason that the casinos require such extensive documentation when it comes to issuing payments. They generally want identification as well as one of a few specific types of utility bills to prove address. It makes sense, because that way it’s not enough to have something else (like an old driver’s license) showing as your address. It’s possible that a very determined advantage player could have utility bills and driver’s licenses for different addresses, but combining that with a different IP address would be a lot of work. THat’s not to say that nobody has done it, because I’m sure some people have.

Nefarious tactics have not been limited strictly to casino games in the past, unfortunately. One scam that has been perpetuated against other players is that of someone using a bot to play online poker. This happens in a few different ways:

Perhaps one of the best known cases is of Russ Hamilton, who had inside information by way of hole card access at UltimateBet.net. Essentially, Hamilton was able to play with knowledge of the hole cards of other players, which would enable him to know in advance of making his bets whether or not he had the edge. There were also a few other confederates at that site that shared similar knowledge, as well as a handful of lesser-known cases at other sites. The Hamilton case was especially egregious, however, because he also had a direct stake in the site itself.

Aside from that, many others have had a, “Bot,” play for them by which they could analyze the play of others at the table as well as instantly analyze pot odds to make betting decisions on their behalf. While many such players are caught, and online casinos generally go to great lengths to catch them, these people often manage to abscond with various amounts of money before getting caught.

In many cases, they’re caught simply because they are winning at a nearly impossible rate. The bots that are used, quite simply, are better than even very good human players. The result is a win/loss total with an arrow that only goes in one direction, if expressed as a graph.

There was recently another scam in the United Kingdom by which players would play casino games (not poker) with fraudulent or stolen ID’s in order to take advantage of bonuses. Foolishly, the ring leader behind that created a private Facebook group that required cash (paid at a completely separate website) to become a part of. At that point, he would explain to people how they could go about beating the bonuses of a group of casinos. That’s not so bad, even though I often explain how to go about playing bonuses for free, but the worst part of what he did was also using the Facebook group as a means of acquiring new ID’s so that he could continue to play.

Needless to say, when this scam was shut down, many of them played innocent and took to various websites to complain vociferously about the, “Cheating,” casino that, “Refused to pay,” them. Naturally, these people had been informed that there was an ongoing investigation into the matter, and they knew that they had cheated, but that was not a sufficient deterrent to them slamming the casino’s reputation.

It’s possible, of course, to be an AP without being terribly intelligent as well as to be intelligent without being an AP. The casino was able to nab many of these people because their Facebook names (as they are supposed to) matched their real names which also matched what the casino had for them. Beyond that, as part of the ongoing investigation into the matter, representatives of the casino, as well as others, joined the closed group and were able to determine exactly what was going on.

If you’re interested, I wrote about the above matter much more extensively in this article.

Finding a Balance

The problem is that I also believe casinos have went too far the other way, in many cases. As far as documentation requirements are concerned; I’m fine with them requiring whatever documentation they want to pay players, but then they should also require those documents before accepting a deposit or even letting a player create a real money account.

The biggest problem that I see right now is that Bonus Terms as well as General Terms & Conditions are astoundingly long lists of pseudo-legalize that make virtually everything under the sun (depending on the casino) a violation of the terms of one kind or another.

Many casinos have insane restrictions on bet amounts, especially relative to the large deposits that they are willing to accept (and put a bonus on) such that it would take half of forever to meet the playthrough requirements even at a huge disadvantage! Some casinos that allow Table Games to be played on a bonus, for example, stipulate that the player may bet no amount larger than $5 on any given hand. If you can imagine a $1,000 deposit with a 200% bonus match, that is going to give the player a bankroll of $3,000 in playable funds. In many cases, the effective playthrough requirements on a table game might be as much as 100x playthrough. That’s a pretty simple matter:

$3,000 * 100 = $300,000 in total playthrough requirements.

If the player is limited to a base bet of $5/hand, and just for example, let’s say they are playing a game such as Pai-Gow Poker in which the base bet is the only bet made, the player is looking at having to play 60,000 hands just to complete the Wagering Requirements.

Sixty. Thousand. Hands.

If we assume that the player can play a very fast fifty hands per hour, (that is quite quick for PGP, even by online standards) then the player is going to end up playing for 1,200 hours just to complete the Wagering Requirements. Playing eight hours per day, the player would finally be finished (assuming he lasts that long) after 150 days if he takes no days off.

Unfortunately, for whatever reason, many bonuses also come with some finite amount of time in which they must be played (usually thirty days) lest the bonuses be forfeited, anyway. I have no idea what possible advantage the online casinos believe a player could enjoy by taking longer than thirty days to play, and that being the case, I have no clue why some casinos would have that rule.

In my opinion, the biggest problem is that a, “Bonus,” often becomes the exact opposite of the meaning of the word, given the playthrough requirements. One would think that a, “Bonus,” would represent extra money such that the player would have, if not an advantage, at least a reduced expected loss on the initial deposit.

Perhaps surprisingly, that is not always the case. Sometimes the playthrough requirements are so grueling that the only reasonably likely result is that of the player losing everything, deposit included, before completing them. Again, in many cases, this is all while being restricted to certain bet amounts.

It really wouldn’t be a mathematically difficult task to structure bonuses such that the player has an expectation, regardless of how it is played, of losing the entire bonus and some part of the deposit. Obviously, I do not expect that every online casino should hand players an advantage on a silver platter. What I am saying is that taking a bonus should be objectively better than not taking one, but that’s not always the case.

The expected loss on the entire Deposit + Bonus amount is often well in excess of what the total of those two things is. On the other hand, a player refusing a bonus could deposit and play within the table limits with impunity. More importantly, the player who declines a bonus can also cash out whenever he or she wishes. Simply put, a player with the freedom to play however he wishes can remain in control of his/her expected loss by not being forced to make greater amounts in total bets.

One example was a bonus that I analyzed last July for Casumo Casino.

That bonus was structured such that the player had a very small expected profit by making the lowest deposit possible and taking the first (lowest) bonus. The situation would become much worse after that with the more that the player deposited and the larger the bonus taken. Eventually, the result, playing the best slot game possible, was that the player would lose the entire deposit on the fourth and fifth bonuses.

Again, by not taking a bonus, the player could enjoy unrestricted bet amounts combined with the ability to cashout whenever he or she wanted to (essentially) as most online casinos typically only require a deposit (without a bonus) to be played through once.

We know things have gotten bad when T&C’s are structured such that slot players are better off to not take a bonus as opposed to taking one. The casinos should be falling all over themselves to offer slot bonuses that not only allow the players to play longer, but also to play at an increased expected value.

Those are not the only Terms & Conditions that have gone from bad to worse, though. For example, Bovada had a term in place (and may still) that if the wagering requirements of a specific bonus are not completed before the player has lost all of his money, then the incomplete playthrough requirements would be rolled over into the next bonus. That’s a head-scratcher in and of itself, but what really doesn’t make any sense to me is that such a term pretty clearly disincentivizes a player from taking an additional bonus. If the player feels disincentivized from taking another bonus, then the player will be that much more likely to seek bonuses elsewhere and discontinue depositing into the casino at all.

The first thing that I would do as an online casino is not have blanket rules that I would use to cover all bonuses. I would draw up all bonuses as different categories and would require play on that specific bonus at any given time. There is a way to accomplish that, ensure that the player is still playing at an expected loss AND allow the player to play longer all at that same time. This can be done while, at least arguably, remaining a better value than depositing and not taking a bonus.

The first thing that I might do is take a look at my best Blackjack game. Let’s imagine for a second that the House Edge is 0.4%, which results in a RTP (Return-to-Player) of 99.6%. If the player chooses to avail himself of the Blackjack bonus, then the entire bonus amount will be placed into a, “Bonus Balance,” that can only be played on Blackjack. When that bonus balance is gone, the Wagering Requirements would still be in place against that deposit, but the player could then play whatever game he wants to. Any funds won would go into the bonus balance until the bonus is completed or the bonus balance is lost.

Let us suggest that the minimum deposit amount for this Bonus is $50 and the maximum amount is going to be $500. I would then have, “Betting tiers,” for each deposit that would decrease the wagering requirements, depending on the amount of the deposit (and bonus) that, on the surface, would seem to encourage making larger deposits.

Okay, so a $50 deposit would earn a bonus of $100. If I want to know how much in total action would result in an expected loss of $150, that’s easy:

150/.004 = $37,500

The result would be total Wagering Requirements of 250x Wagering for the player to be expected to lose his entire Bonus + Deposit. I don’t want the player to be expected to lose that much, though, so I am going to reduce the Wagering Requirements to 200x.

200 * 150 * .004 = $120

That seems like a pretty good compromise to me. The player is expected to lose the entire bonus amount, and then another $20 (if he continues to play Blackjack to complete the Wagering Requirements).

The result of the 200x Wagering Requirement is $30,000 in total wagers. On the other hand, at expectation, if the player only played $50 (without a bonus) until it was gone, then the player would expect to play 50/.004 = $12,500 before losing the entire amount, by expectation.

That’s a bonus doing what it’s supposed to do without being beatable. I would probably place an individual wager restriction on the bonus of 10% of the amount of the original deposit, but there would be a separate screen that the player would click, “Ok,” to indicate that he understood those terms. More importantly, I would have the game programmed such that the player would be unable to bet more than that on the bonus game, anyway.

The player could also deposit and take bonuses on other games at the same time, it’s just that each game would have a separate, “Bonus Balance,” that would have to be played on that game until the bonus funds were either gone, or the Wagering Requirements successfully completed. When it comes to the initial deposit money, all of that would exist in one fund with which the player could play as he likes.

The Variance that would normally work in a player’s favor when playing a bonus of this nature would cease to do so as a result of the playthrough requirements combined with the maximum bet restrictions. Again, when the bonus balance is lost, the player is then permitted to bet as much of the deposit funds as he likes and it will count towards the playthrough requirements on the proportional charts that they use now.

When it comes to larger deposits, if a player deposits $500 and gets a Bonus of $1000 for a total bankroll of $1,500, then we look at the playthrough requirements for an expected loss of everything:

1500/.004 = $375,000

As you probably guessed, once again, that would be at 250x Wagering Requirements.

What I am going to do now is reduce the Wagering Requirements, but not to 200x, if you take a bonus over a certain amount, then I am going to give you 180x Wagering Requirements. That means that the player would need to make total bets of:

180 * 1500 = $270,000

With an expected loss of:

270,000 * .004 = $1,080.

Therefore, I am expected to make $80 off of that player. The player is expected to lose the entire bonus, as well as $80 of his deposit amount.

I don’t know that I would go with these numbers specifically, but the general idea is that I can structure maximum bet and playthrough requirements such that I have the advantage as the casino, the player cannot use Variance to beat me, the player has a greater expected loss on a greater deposit amount, but I’m still arguably giving the higher better a greater value.

The player would also be able to bet $50/hand on the Blackjack, provided that he made the $500 deposit. As the casino, I obviously have the advantage overall, so why should that worry me? As before, the player also gets increased expected playtime as $500/.004 = $125,000, which is $125,000 in total bets before being expected to lose his entire deposit.

Conclusion

Online casinos are not what they once were, but fortunately, there are still profitable promotions to be found here and there. One area in which online casinos may be lacking right now is that they have gotten a little paranoid and often structure Wagering Requirements such that the player is expected to lose the entire deposit as well as bonus funds prior to completion.

The situation is obviously not ideal, and would be better replaced with bonus structuring such that the bonus is a seemingly better value. That can be accomplished while reducing a player’s expected cash loss relative to total action and initial deposit, while still accomplishing the primary goal of extending playtime. In the meantime, there would also be some winners rather than the constant posts of, “I can never win when I take a bonus,” and good word-of-mouth is a plus for any online casino.

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