Fixing the Online Gaming’s Welcome Bonus Conundrum

Written By Robert DellaFave on November 19, 2014
Why welcome packages are hurting sites' reps

Online poker operators like to talk about how they’re adapting a more recreational player-friendly model. And to their credit, select measures have been taken of late ensuring that Recs won’t spend the majority of their time online harassed by bum hunting grinders:

  • The inclusion of casinos and jackpot type poker games have done their part in promoting a more lighthearted atmosphere.
  • Anonymous tables effectively prevent high-volume players from preying on the weak.
  • Sites are spending less money on high-profile sponsorships and convoluted rakeback programs, and more on “fun” promotions.

Yet, here we are, well into the fall months, and online poker traffic has only recently begun to recover from a 10-month long swoon that resulted in total liquidity losses of 26%.

Clearly, more changes need to be instituted, and I’d argue that one of the first areas operators should look to improve is their much maligned welcome bonuses.

The Problem With Welcome Bonuses

Today’s welcome bonuses are little more than exercises in deception designed to mislead new signups into thinking they’re getting a fantastic deal.

Visit any poker room’s website, and I can virtually guarantee that one of the first things you’ll see is a banner ad proudly proclaiming the following:  “Sign up now and receive a 100% match bonus up to X on your first deposit”, with X ranging anywhere from $400 to $4,000.

Sounds like a good deal, right? It’s not.

Here’s an example of how welcome bonuses really function:

  • Player X signs up for a site currently offering a 100% match bonus up to $1,000. Intrigued, our value seeking player registers, then uses his credit card to load $1,000 in his account.
  • After fumbling around the lobby, Player X finds a $.25 / $.50 game. He sits down, plays for a few hours and loses two full buy-ins.
  • In the process he accumulates 50 player loyalty points, which equates to $25 in contributed rake.
  • The next day, Player X notices five extra dollars in his account. Apparently, to unlock $1 of his bonus, he must contribute $5 in rake.
  • Player X proceeds to read the fine print, and realizes that in order to actually receive the full $1,000, he’ll be forced to pay $5,000 in rake over the course of 90 days or lose all uncleared bonuses forever.
  • Reasoning that he’ll lose more than $1,000 learning the game, he ends up only playing sporadically.
  • In the end, the bonus amount Player X clears isn’t even enough to cover the cash advance fee his credit card company charged him for loading funds on to an online gambling site.

And that’s an example of how a lenient welcome package works. Sadly, some sites only release bonuses in a few sizable increments or require players to clear bonuses in as little as 30 days.

I often wonder what percentage of the poker playing populace contributes $5,000 or more to the house on a monthly basis. 5%? 1%? Less? And of those that do, how many are enthused hobbyists? My guess is next to no one.

Welcome bonuses weren’t always bad. In the early-to-mid 2000s, when sites were throwing bricks of money at their customers, a recreational player could sign up, clear their bonus with ease, and cash out. Given the generally poor level of play, it wasn’t inconceivable for them to win a few shekels in the process.

But today’s poker landscape is a vicious hunting ground, and odds are new players will go bust before clearing even a minuscule fraction of their bonus. Frustrated and dejected, they abandon online poker in favor of a another hobby.

Compounding matters, even casual players have become privy to the fact that today’s welcome bonuses are essentially a sham, and may choose to disassociate themselves entirely with an industry they perceive as shady and deplorable.

Something’s got to give.

A Few Possible Solutions

Abandoning the current model entirely would likely prompt the 1% of players that actually make full use of the bonus (and account for roughly 95% of Two Plus Two forum posts) to brandish pitchforks and call for the exiling of any and all executives that supported the decision.

Instead, operators may want to consider altering their welcome bonuses to read: “Sign up today and receive a 100% match bonus up to X on your first deposit…”:

OR 20-40% of your first deposit in tournament dollars

Entice casual players by giving them the option to pad their bankroll by 20-40% right off the get.

Players who know they have no realistic chance of clearing a full welcome bonus will relish the opportunity to receive a smaller, yet guaranteed, percentage of their initial deposit as tournament bucks. This solution benefits the operator as well, as it will have a direct and immediate impact on tournament turnouts, and subsequently, cash liquidity.

And by rewarding tournament dollars as opposed to real-money, it effectively prevents players from gaming the system.

OR a 5% match bonus for every daily challenge completed

The casual gaming crowd loves daily challenges – especially if the reward for successful completion is cash in hand.

Why not implement a system where players have two weeks from the time of initial deposit to complete a series of daily challenges. Accomplishing a task results in the player receiving a small percentage of their initial deposit as cash.

Daily challenge promos have had profound short term effects on player liquidity. By adapting the described model, operators all but ensure that these gains, while less pronounced, will be continuous.

AND 50% cash back on all net losses for 30 days

Online casinos roll out promos like this all the time: “If you win, you get nothing, but if you lose we’ll refund a portion of your losses.”

Although no poker player likes to admit that he or she is a losing player, the overwhelming majority are. By ensuring a return on first month losses, it guarantees newcomers a second chance – not only to utilize their newfound experience, but to win.

Or, should players decide after a month that they’re tremendously awful at online poker, their hard lesson will only have cost half the price.

Admittedly, in the short-term, the aforementioned solution will cost operators’ money. But isn’t spending money now better than the alternative, where the poker ecology is left in a perpetual state of imbalance?

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Robert DellaFave

Robert DellaFave writes for a variety of online gaming sites and is also working on programming a poker simulation creative enough to beat the best. Follow Robert on Twitter @DivergentGames and on Google+

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