Unique and exciting casino bonuses are one of the most commonly used tools in every online casino’s arsenal to attract new customers. These bonuses provide great value to players through free spin rewards, deposit match bonuses, and even cashback offers.
Used in conjunction with affiliate marketing, casinos that offer rewards like no deposit bonus codes and 200 free spins can significantly boost their player base. However, with this additional income from players comes the cost of offering these bonuses.
Today, we’ll examine the true cost to casinos of offering these rewards. In general, there are three primary categories in which a casino can incur costs: financial, reputational, and operational.
Financial Cost
The first and most significant cost to any online casino offering bonuses is the financial cost. While players may see these bonuses as an easy way to get more for their money, the casino has to pick up the tab for the extra. These financial costs are incurred in various ways:
Direct Costs
The direct financial cost is what a casino has to spend to offer a particular bonus. If a site offers a $200 registration bonus, it means that for every new player it gains, the casino needs to have $200 available to allocate to that player from its balance sheet.
Deposit match bonuses can be even trickier. Many online casinos offer up to 100% deposit match bonuses for new players. Should a player deposit $1,000, the casino must pick up the bill to match this with another $1,000. For this reason, many bonuses have limits—such as a deposit match of 100% up to $300.
It should be noted, however, that this direct cost fluctuates vastly. In theory, if a $200 sign-up bonus is offered to new players, the casino would need to cover $1,000 for five new players. That said, wagering conditions may prevent this cost from ever materializing, as the casino retains its share if players fail to meet the requirements.
Advertising Costs
Aside from the direct cost of honoring a bonus, online casinos must advertise their current offers through online ads, affiliate programs and marketing, or marketing agencies. Irrespective of how, marketing these bonuses requires significant spending to be effective.
In 2024, it is estimated that online casinos in the US spent almost $3 billion on advertising alone. While this includes large sums from players like BetMGM, FanDuel, and other major players, it shows the incredible cost of ensuring players know about the latest bonuses and promotions.
Payment Processing
Another cost is the additional payment processing fees that casinos need to pay when attracting new players with bonuses. As the number of players increases due to incentives offered by bonuses, so do the number of deposits and withdrawals made from player accounts.
Unless stipulated to be at the player’s cost, the fees charged by payment processors to complete these deposits and withdrawals become the casino’s responsibility. As such, a significant influx of new players can also result in higher-than-normal processing fees for a casino to pay.
Abuse of Bonuses
Although the financial costs casinos incur often fall into the three sections discussed above, there is another: players who abuse offered bonuses.
As has happened previously, some players find loopholes or ways to exploit bonuses offered by a casino. Whether by opening multiple player accounts or circumventing wagering requirements, each time a bonus offer is abused, it costs the casino a great deal in direct and processing costs.
Reputational Cost
Although casino bonuses may have a high financial cost, the reputational cost could be worse. Should a bonus cause the casino to lose some of its hard-earned reputation as a fair and trustworthy provider, players may leave or decide not to register an account. When this happens, the casino will incur an additional financial loss in the form of lost future revenue.
Reputational costs generally occur in one of three ways:
Lackluster Player Experience
The first is if the way the bonus is offered provides a lackluster or negative player experience. This can occur if a casino isn’t clear on the bonus’s terms and conditions, sets the wagering requirement too high, or in any way allows the bonus to be seen as unfair to the player. This negative player experience could encourage players to publicly share the details of their experience with others and damage the casino’s reputation.
Loss of Trust
Should a player feel like a casino is taking advantage of them through a particular bonus or its requirements, they may lose their trust in the operator and speak out about what happened, further damaging the casino’s reputation. Once a customer walks away, it can be difficult—if not impossible—to ever win them back.
Regulatory Audit
Finally, every casino wants to avoid being audited by regulatory bodies. This could be perceived as a sign that the casino is not transparent or is unfair toward players. Should a casino offer a bonus that is not in accordance with regulation, it could be audited and suffer a large knock to its reputation.
Operational Cost
The final cost a casino may incur when offering bonuses is the operational cost. This involves paying for systems or activities that either have to be implemented or strengthened due to the provision of bonuses.
Like reputational costs, there are three primary operational costs a casino may encounter:
Bonus Management Systems
Should an operator’s casino management system not cater to the provision of bonuses, they may need to purchase a separate bonus management system.
This type of system, which helps track, control, and manage bonuses, comes at an additional cost and could prove pricey.
Customer Support
In many instances, players may have queries or need assistance with claiming a bonus, understanding its terms, or resolving a dispute. While many casinos have robust customer support systems, the introduction of bonuses may require these to be extended. This could be done by giving support agents additional training, hiring more, or using AI chatbots.
Detection and Prevention of Fraud
To curb bonus abuse and fraud, any online casino that offers a bonus would also be wise to increase efforts to detect and prevent fraud. Doing so can include implementing additional systems or hiring extra staff, both of which come at a cost for the operator.
Final Say
Although players may find great joy and entertainment in providing casino bonuses, the cost of offering these bonuses to casinos can be extensive. As such, players should be thankful when they come along and make the most of them so that casinos will remain willing to foot the bill they generate.