Are Bonuses Becoming A Problem?

Bonuses are an important acquisition tool in the online gambling industry, but the practice, when it gets out of hand, has its fair share of negative effects.

Visit any online gambling site, and the first thing that will grab your attention is a bonus offer emblazoned at the top of the page. It has been this way for as long as I can remember.

The industry is convinced that the bonus offer is more important than a new product, the number of markets or games they offer, or any other positive attribute.

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“You need bonuses to acquire players because it’s competitive,” Ozric Vondervelden, CEO of U.K.-based Greco, told Global Gaming Business’s Buck Wargo. “If your competitors have bigger bonuses, they are going to acquire more players generally.”

I talk a lot about the folly of “This is how it has always been done,” but in the case of bonuses, it’s hard to argue with the results.

But argue I will, or at the very least, push back a little bit on the assumption that bonuses should always be the focal point.

Bonuses as the centerpiece of your marketing come with several drawbacks:

• They attract bonus hunters.

• They degrade customer loyalty.

• They encourage a race to the bottom, with the deepest-pocketed operator winning.

Bonus Hunters = Bad Customers

I was never a bonus hunter (we had a less PC name for this practice back in the days of online poker), but I certainly took advantage of them.

I had dozens of online accounts accounts, but most of my play was at Party Poker and Ultimate Bet, and later Full Tilt and PokerStars. Most of the accounts were opened with the sole intention of clearing a deposit bonus offered by an affiliate. And back in the online poker days, you could have an account at every skin on a network.

A few sites had monthly recurring bonuses, and I would visit some of them at the beginning of the month, deposit my $200, play through the requirements, grab my bonus dollars and any winnings, and then go back to Party Poker, which had better software and games.  

If you were any of my non-core sites, including the affiliate site that was typically on a revenue-sharing deal, I was a terrible customer. Now imagine the true one-and-done bonus hunter with no home base.

Bonuses Are Anti-Loyalty Programs

I wasn’t a bonus hunter, but the constant stream of offers certainly tested my loyalty. And that’s how they land with most bettors.

Just like people have learned to leave items in their online carts and wait for the “did you forget something” coupon to arrive by email or start the subscription cancellation process to see what discounts they are offered, online gamblers have learned the tricks of the trade.

A bonus signals to your customers that they may want to look for similar offers at other sites.

If you are the cream of the crop or have unique offerings, these customers will come back. As Fanatics learned, when it lured a VIP away from DraftKings (likely with bonuses and offers), don’t expect loyalty from someone who has shown that they are only as loyal as the offer they receive.

“They [operators] are happy to take this short-term loss to have a long-term return from the players,” Vondervelden said. “The risk is they’ll never get that long-term return from the players because the player’s attention was only to take value. It’s been unsustainable and a race to the bottom, and created this culture of bonus abuse.”

In a column that no longer exists on the Internet, I once compared high-volume poker players (VIPs) to hardcore weightlifters at a gym — for those who don’t know, I spent many years running health clubs. “Both groups… expect preferential treatment and ask for the world, and when they get the world, they usually ask for more.”

I also noted that when they don’t get the world, their loyalty suddenly disappears, which is why they are asking for the world. Basically, beware of someone who uses their loyalty for leverage.