Before speculating, let’s first look at the current state of bonusing in the UK.
The battle for the biggest headline bonus is driven by a desire to rank at the top of affiliate lists. This has led to an inability to compete sustainably, without the use of techniques that cap the overall value of an offer.
Wagering requirements, max bets sizes, win caps, content restrictions, reduced contribution and clever balance consumption orders are among some of the ways operators are able to generate a big headline whilst also protecting themselves.
However, this doesn’t make for a great user experience. Players will find themselves unable to play their favourite games or preferred stake size, having chunks of their winnings removed or realising that their wagering isn’t clearing due to reduced contribution.
There is no better way to leave a bad first impression than having a player feeling cheated. In fact, many casino veterans won’t bother with promotions.
Genuine players will not read the full terms and conditions of an offer. Even those that brave the legions of legal and industry jargon will have a hard time decoding the multiple sets of terms, swamped with contradictions and overriding powers over one another.
Legacy infrastructure generally means these restrictions are enforced after the point of play, leading to retrospective analysis and confiscations.
There’s nothing more damning for an operator than being labelled as someone who doesn’t pay out winnings. We know bonus abusers are communicating across forums, orchestrating Trustpilot and IBAS attacks on operators that are too heavy-handed.
It’s a difficult situation; do they not confiscate and lose their protective measures? Become over-exposed? Or do they risk confiscating from genuine players? All are equally damaging for brand image and reputation.
Commercially, operators are still taxed on the face value of a bonus, irrespective of the techniques used to manage the value of the bonus. In addition to this, mediation and customer service complaints are expensive.
Whilst these restrictions cap value for genuine players, that’s not always the case for bonus abusers.
Professional bonus abusers can circumnavigate almost all these restrictions in one way or another. A few basic examples are:
- Storing value in content prior to the removal of excess winnings to undermine win caps.
- Identifying misrepresentation of RTPs by the content provider to achieve an RTP above the content restrictions intention.
- Storing unsettled bets or cash funds in content mechanics to undermine cash-first consumption offers.
For most operators, churn after the first offer is a large problem; we’ve seen enough data to say with confidence that for many operators, the effectiveness and long-term rewards does not justify the upfront cost.
A successful client of ours, ‘Yolo Group’ which includes brands such as bitcasino.io and sportsbet.io has decided to do away with welcome offers altogether citing their ineffectiveness.
“We’ve always strived to put the customer at the centre of the universe at the Yolo Group, and cookie-cutter bonuses don’t often achieve that,” says Tim Heath, Founder of the Yolo Group and GP at venture capital fund Yolo Investments.
“We switched to a personal loyalty club scheme where we can reward players on an individual basis, with bonuses and promotions that are bespoke and a natural match to the player. It was a bold move when we did it, but we couldn’t imagine switching back now.”
Operators entering the UK market for the first time without budgets big enough to compete on a level playing field rely on UX, retention and branding rather than battling it out to be the one with the biggest bonus.
We’ve worked with many of these operators, and our client MrQ.com is a great example of this new behaviour, having seen huge growth with low value, low fuss offers.
“We decided to do away with a ‘bonus wallet’ which was anchored to complicated T&Cs. Our belief was that customers could see right through these mechanics for what they really are, smoke and mirrors. The idea of having a bonus amount given to a customer which only really becomes ‘real’ when they’ve wagered 50x is an alien concept to us, it goes against everything MrQ.com stands for” – Savvas Fellas CEO of MrQ.
A simple but effective retention offer that Ladbrokes and Coral put out a couple of years ago saw customers receive a £1 credit with 1x turnover requirement. This is actually less in value than a £5 bonus with 40x wagering, but is an offer that is arguably equally, if not more appealing, than the higher value bonus with restrictive terms because it doesn’t carry the negative association of being unfair.The real value of this offer is its ability to keep players engaged and your brand relevant. The ease with which a player can use their unrestricted £1; scrolling on the morning commute, the toilet or laying in bed and the subsequent reminder of the operator makes it more likely they will deposit with you over another.
If after several cash drops, they still don’t deposit you can suspend this offer type for that player with little harm done and an excellent opportunity for data collection on a players’ behaviour in the process.
The problem is that this is a retention offer. How do we apply this principle to acquisitions?
There are a couple of examples such as Gamesys’ daily free scratch card game, available every day and all players have a chance of winning. Players do win, often and the more money you spend on their site any other time increases the amount/chance that you win.
The house is giving value to those players it knows will give value back, incentivising a player’s return repeatedly. Presumably, they are able to do this using some measure of a player’s theoretical value or behavioural risk.
Gamesys have been selling themselves on their retention value rather than a headline welcome offer and marketing directly to the consumer through TV campaigns. They have put themselves in a position where they don’t have a dependency on affiliates, and they don’t need to be in the bonus race to the bottom.
Kwiff is another example of an operator that seems to also use some kind of metric to determine the value of a player. If you are deemed a good player, they will boost your odds astronomically. With the added benefit that odds are subjective and so boosts aren’t taxed like bonuses are.
For both of these offers, there is little opportunity for a player to complain, and they also have very low exposure to bonus abuse.
I’m not the most qualified person to talk about marketing trends. However, judging by marketing analytics reports, it seems consumers are increasingly turned off by hard-sell tactics.
Instead, they prefer education, storytelling and meaningful engagement with a brand that resonates with them on a more personal level.
With this, I envisage a shift towards brand and retention-based marketing within the industry, leveraging an operator’s
values in the same way that responsible gameplay credentials are currently used in marketing.
These may be, the largest selection of games, the best RTP/odds, no restrictive terms, the fairest balance consumption order, the best gamification layers or the best retention programmes. All of which are an opportunity for operators to educate their audience.
Anticipating a growth in retention offer based marketing, we’ll increasingly see operators rewarding players based on theoretical value and behavioural risk analysis. It is also possible this trend will be accelerated by concerns over future regulation on welcome offers.
The biggest setback for the industry is in building such a complex solution. This is why Greco has taken on the challenge of building a solution that will formulate each player’s historic theoretic value in real time, as well as analyse gameplay for behavioural based risks.
Greco will be interoperable with fraud and verification products, giving a single view of risk that evolves over the player lifetime. For the first time, CRM teams can use risk as a foundation in determining how best to reward players. Reducing bonusing costs through automated individual player risk management.
The battle of the biggest bonus is on in the US, with operators looking to take as much market share as possible before the market becomes saturated. Many of these operators are using leaky legacy platforms and have relatively little in the way of retention and risk management processes.
Operators are speculating on the long-term returns outweighing the high cost of player acquisitions, and I believe there’s an opportunity for US operators to jump the gun and focus on more meaningful and sustainable campaigns.
Time will tell.
Ozric Vondervelden, Co-Founder, Greco
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Ozric Vondervelden, co-founder of Greco, has spent over a decade specialising in igaming- focused promotional abuse and fraud. Having helped over 35 operators, platforms and content creators, they’ve become the industry go to for all things risk management.
They have a demonstrable history of finding innovative solutions to long-standing problems, empowering operational teams through education whilst harnessing the power of data to drive meaningful change, and creating unique technical solutions.