How No Deposit Casino Bonuses Work (And Why You Should Care)

by Michael Stevens
on September 17, 2018
8

Minute Read

Casino bonuses are promotional tools used by online casinos to attract new real money gamblers to their sites. The bonus is a dollar amount that’s added to your account that you can use to gamble with. It’s the equivalent of getting free chips in a traditional land-based casino.

To understand how a no deposit casino bonus works, it’s important that you understand first how traditional casino bonuses work. Luckily, those aren’t that hard to understand. Traditional casino bonuses are amounts that equal a percentage of your deposit that are added to your account.

But First, an Example of a Traditional Online Casino Bonus

Here’s an example of a traditional casino bonus, taken from a real casino:

On your first deposit, you get a 200% bonus of up to $1000.

This means that when you make a deposit of $500, you get an extra $1000 added to your account. You only put $500 in the account, but you have $1500 to play with.

At one time, most welcome bonuses were just this straightforward.

But many online casinos now have multi-part welcome bonuses, and in this case, this is just the first piece of an 9-part bonus. On the next 8 deposits, the casino offers a 100% bonus of up to $500.

The total signup bonus that they advertise is $5000, but you must make 9 deposits to get that bonus. One of the reasons for this is that many payment processors have trouble processing a single large deposit. The other reason—probably just as important—is that the casino wants you to get into the habit of making deposit after deposit.

There’s a little more to a traditional deposit bonus than this, but that’s clear enough that I can move on to my main topic—no deposit casino bonuses.

These are bonuses which require no investment at all on your part. They give you an opportunity to play the casino’s games for free, and you even have an opportunity to win some real money while you’re at it.

The rest of this post aims to provide a comprehensive explanation of how no deposit casino bonuses work. The goal is for you to be an informed consumer so you can make educated decisions. This might seem unnecessary when dealing with a promotion that costs you nothing, but some people forget to take into account “hidden” costs. I’ll explain more about that later in this post, too.

Now Let’s Look at an Example of a No Deposit Casino Bonus

Here’s an example of an actual no deposit casino bonus:

You get $10 free in your real money account, and you don’t have to make any kind of deposit at all to get this money.

All you need to do to claim this bonus is create a real money account. You don’t have to deposit any money. And creating a real money account is easy. You just input your name, address, phone number, and email address. You also provide them with documentation that proves your identity and age.

To claim this bonus, you use a specific code. There’s a place to input this code in the cashier section of the website. There’s usually a lag time between when you claim the bonus and receive the funds in your account. It’s usually not long, though—often the funds are available in less than an hour.

What Are Wagering Requirements?

With any kind of casino bonus—traditional or no deposit—the casino requires you to place a certain amount of wagers before cashing out. This makes sense, surely, because otherwise savvy players would claim a bonus, make a couple of bets, then withdraw their money. That’s a surefire loss for the casino, so they need processes in place to prevent this.

The main process the casinos use is called a wagering requirement. It’s also sometimes called a playthrough or rollover requirement. Either way, it means the same thing—you must place wagers equal to the deposit amount plus the bonus multiplied by some arbitrary number.

The playthrough requirement for the traditional casino bonus that I used as an example above is 35X your deposit plus bonus. This means that for your first deposit of $500, you get a bonus of $1000, for a total bankroll of $1500. You must place (35 X $1500), or $52,500 in wagers before cashing out.

That sounds impossible, as you only have $1500. How can you make $52,500 in bets if you only have $1500?

It’s actually easy. With most games, more than 40% of the time, you’re going to book a win. That bet still counts, even though you didn’t lose the money and actually won money on it.

Here’s an example of how much money you might wager in an hour playing an online slot machine game:

You’re betting $3 per spin on a game, and you’re making 900 spins per hour. (You’re playing fast.) That’s $2700 in action for that hour.

At that rate, it will take about 20 hours of play to hit your wagering requirement of $52,500. The money that you have left in your account after that is money you can cash out.

The casino does have a mathematical edge, though, and you can use that to calculate how much money you can expect to have left after that amount of wagering. You just multiply the house edge by the amount of action to determine your expected loss.

Suppose you’re playing blackjack, and you’re a perfect basic strategy player. The house edge under these conditions is only 0.56%. Your expected loss on $52,500 is just (0.56% X $52,500), or $294.

If you start with $1500, and you have a mathematically expected loss of $294, you have an expected amount of $1206 left in your account. That means you have a positive expectation situation with this bonus offer. You have an expected profit of $706, in fact, which is huge.

It’s also too good to be true, for reasons I’ll explain next.

Restricted Games for Bonus Offers of All Kinds

At casinos which offer games with a low house edge, like blackjack, the wagering requirements are usually only fulfilled by wagers on specific games. Blackjack is NOT one of those games. In fact, at a lot of casinos, the ONLY games that count toward your wagering requirements are the slot machines.

The unfortunate fact about slot machine games is that we have no way of knowing what the house edge is on those games. If we knew the probability of getting the various winning combinations along with the prize amounts, we could put that data together. But we only have the prize amounts—not the probabilities.

But we can make certain assumptions.

For example, we know what the average payback percentage is at a slot machine on the Las Vegas Strip. We could assume that the payback percentage for our online casino slot machine games is as good as that. Then we can guess at how profitable or unprofitable that casino bonus is based on that estimate.

According to one site I trust, the payback percentage for the Strip averages 91.5%, which means these games have an average house edge of 8.5%.

Now our online casino’s house edge might be higher or lower than this, but let’s just assume that it’s 8.5% and see what our expectation becomes on that bonus offer we’ve been discussing.

The expected loss is (8.5% X $52,500), or $4462.50.

Since our starting bankroll was $1500, we can easily see that our expected win is 0.

Sure, we could get lucky and perform above expectations. We could also have bad luck and perform below expectations.

This requirement eliminates the ability of an advantage player to gain a mathematical edge because of the casino’s bonus.

Some casinos, too, do allow wagers on games like blackjack to count toward their rollover restrictions. They just discount how much of that wagering counts. For example, they might only count wagers on blackjack at 10%.

This has the effect of making the wagering requirement if you only play blackjack 350X your deposit plus bonus instead of 35X your deposit plus bonus. You must wager $525,000 in total, instead of just $52,500.

Your expected loss on that action, with perfect basic strategy, is now $2940 instead of $294.

That’s still more than your starting bankroll, so your expectation is still 0 on that promotion.

No Deposit Bonuses Have Additional Restrictions, Too

Since you’re not risking any of your own money, the casinos place additional restrictions on a no deposit bonus, too. The example I used earlier, the $10 free just for signing up offer, was a 25X the amount of your bonus wagering requirement.

This means you must place $250 in bets before cashing out.

The expected loss on that, assuming an 8.5% house edge, is $21.25, which is obviously another 0 expected value proposition.

But as we discussed earlier, you could get lucky and get ahead early. The casino REALLY hates giving away money to players who haven’t even made a deposit, though, so they have additional requirements and restrictions.

The first of these is that you must make a real money deposit before cashing out your winnings. This kind of eliminates the “no deposit” aspect of the bonus. It actually turns it into a bonus-prior-to-your-deposit situation, but that’s not nearly as sexy a way of describing it.

The 2nd restriction is a maximum amount that you can win. In this offer, let’s say that the maximum win is $100.

You win a $1000 jackpot on your first spin, so you’re easily able to cash out the $100. But the casino requires you to make a deposit before cashing out your winnings. Luckily, the casino’s minimum deposit is $20.

Once you deposit the $20, you can cash out the $100, and you actually do come out ahead on the deal.

But it’s not because you got a mathematical edge because of the bonus. It’s in spite of the fact that this was as negative expectation offer.

It’s worth a try, though, because even a low probability of winning money for nothing is probably worthwhile. The only cost associated with this is your time and the new amount of advertising for the casino that you’ll start seeing. If you’re susceptible to advertising, this could be a big cost indeed.

Other Kinds of No Deposit Casino Bonuses

Of course, the flat dollar amount/free chip casino bonus is only one kind of no deposit bonus that’s available. You’ll also find casinos that offer you a specific number of free spins on a specific slot machine game. Less common, but also sometimes available, is an offer to get a certain amount of time playing a machine at no cost.

Let’s look at how one of those kinds of offers might work.

You get 25 free spins on Lucky Louie’s Lagoon slots. (I just made that game up.)

If you have any winnings after those 25 spins, you must wager those 40X on any of the slot machines available at the casino.

The maximum withdrawal after meeting those requirements is $60.

You must also make a $20 deposit at the casino before cashing out the winnings from this offer.

Let’s look at how this might play out in actual practice.

You claim your 25 free spins, and once you’ve finished the 25 spins, you have $50.

Now you must make $2000 in wagers on any of the slots at the casino. You’re expected (mathematically) to lose $170 or so on this action, but you get lucky and finish with $200 left. You got on a lucky streak.

You now deposit $20 into your account to claim your winnings.

Your maximum withdrawal is $60, so you get that money.

But you also have $20 of money to play with in the casino.

That’s a best-case scenario, by the way. Most of the time you’ll finish out an offer like this with nothing to show for it other than an email inbox full of promotions from the casino.

Conclusion

Here’s the bottom line about no deposit casino bonuses:

They’re like a drunkard’s crumpled money the morning after a visit to the bar. They’re not exactly worthless, but they don’t add up to much, either. (Please accept my apologies for badly paraphrasing the brilliant songwriter Chris Wall here.)

Most of the time, you’re trading some free real money play on some casino games for the privilege of advertising to you.

The restrictions attached to these kinds of offers are usually complicated, and they’re always designed to give the casino a great chance of walking away from the experience having paid out no winnings.

This doesn’t mean they’re not worth taking a shot at. They are.

Just don’t expect to see much in the way of profits per hour for your time, here.

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