Controlling the cost of bonus abuse

Some costs are well hidden behind seemingly great performance KPIs. Who doesn’t want more sign-ups, more deposits, more bet activity? However, some traffic is simply not good traffic. Some users are not joining a website as genuine players seeking excitement and entertainment. Some players are not your customers; on the contrary, you are theirs.

Today we will talk about the types and characteristics of bonus abuse, and how they can cost operators dearly if not given the required attention.

What qualifies as bonus abuse

There is a wide range of behaviours that can be labelled as bonus abuse and an equally long list of terms used to describe it. Terms like bonus abusers or bonus hunters are frequently used to describe a smart shopper. A person who enjoys gambling, but only makes a deposit or place bets when offered something special. Very similar to how people shop around to get the best offers and discounts on any product or service. It would be unreasonable not to call these your players. Whether or not you should constantly reward them is, of course, another question.

At the other end of the spectrum, you will find far more organized and professional abuse, using advanced methods to create many accounts, aka multi-accounting, to grab serious money from operators. “Businesses” that pay to borrow people’s identities and use them to that purpose is a very real thing. These player accounts have nothing to do with players. This is a fraud. And in this relationship, you, as an operator, are most definitely their “customer”.

In between, you will find all sorts of variants of abuse and abusers, but what they all have in common is that they represent a cost that, with the right tools, knowledge, and attention, can be reduced dramatically.

Another distinction that should be made on the topic of bonus abuse is between how bonus abusers obtain the bonuses and how they clear out the bonuses. We’ll look at these separately, though the savviest bonus abusers typically are experts in both fields.

Bonus abuse – Obtaining bonuses

So you have created a sweet first-deposit bonus to welcome new players, and before you know it becomes a big hit! Players are signing up left and right and making their first deposit. Success is imminent. Or maybe not.

As time goes by, you notice that many players only make that first deposit, and they never return for more. Or you have some recurring reload offers, and some players only return to deposit and play when these are available. These players can be classified as bonus abusers, regardless of which of the above-mentioned categories they fall into.

And the more such players you have, the greater the chance that your bonus offer has loopholes that need immediate attention. In other words, that abusers find a positive expected value in making a deposit and playing through the wagering requirement.

That doesn’t mean that all abusers will end up with a larger amount than they deposited after playthrough. Many will certainly lose their money, but the bonus favours the abuser and not the casino, and over time and given enough chances (bonuses), the old saying will be proven wrong – the house will not always win.

For the recreational bonus abuser, that means it makes a lot of sense to have accounts at every casino with attractive bonus offers and jump from website to website whenever a bonus offer pops up. Similarly, professional abusers will operate with multiple accounts across many operators to maximize profits.

Being able to detect such accounts at the sign-up stage, as opposed to after awarding multiple bonuses, is fundamental. A proactive approach saves you more money than a retroactive approach does, but it also sends a strong message, which in itself is a deterrent. “We are not offering easy pickings. Go elsewhere!”

However, keeping track of your players’ lifetime value and the ratio of bonuses given vs deposits made, for instance, are still valuable exercises. And these KPIs should improve over time when putting in place tools and procedures to identify abuser characteristics.

Whether it is the payment method used or being referred by a specific affiliate or many other indicators, it is impossible to judge by one attribute alone, it is the sum of attributes that is the tell.

A list with red flags for classic bonus abuser behaviour: bet patterns, flocking around specific games, suspicious withdrawals

Bonus abuse – Clearing out bonuses

One could say that a bonus offer should be bulletproof, and then the problem of bonus abuse will go away. In an ideal world, from an operator perspective, bonuses should add value to the player, while still keeping the RTP (return to player) below 100% when all offered rewards are added on top of the RTP of the games.

But let’s face it – to be competitive, most operators tend to offer attractive bonuses to acquire and retain players. Just like shops that sometimes sell some of their goods at a loss to attract customers that in turn also buy products where the shop actually makes money. And some of these customers will keep returning to that shop even when there are no bargains to be made. The problem occurs when someone comes in and just snatches all the negative-margin products and leaves for good – or until the next time the shops drop their prices below their profit line.

Bonus abusers behave the exact same way. And to them, it is all about the potential reward relative to the time spent and risk taken. The potential reward in the eyes of a bonus abuser is, obviously, money. And, as the saying goes, time is money. The longer it takes to convert offers into hard, withdrawable cash, the less attractive it is to a bonus abuser. In parallel, the risk/reward ratio is also important.

Graph showing the relation between bonus abusers interest in the reward versus the risk taken

A bonus abuser reads your terms and conditions diligently. Much more so than your valued players. In our experience, you can easily communicate complete “turnoffs” to bonus abusers in your terms that valued players don’t care about, simply because the clauses don’t apply to them and the way they play.

In a nutshell, how many hoops a bonus abuser must jump through, how much time they must invest, and how considerable is the risk of getting stripped of the takings due to efficient monitoring and solid terms and conditions decides whether it is worth the effort. Our job is to make sure it is not.

Soft bonus terms

Some bonus requirements might simply be too soft. The theoretical RTP of the games available to play if casino, or the profit margin if sports, relative to the wagering requirement might allow bonus abusers to comfortably clear bonuses and withdraw more than they deposited. This is pure advantage play, and no one can argue that it is illegal.

Next, and this cannot be stressed enough, not each bonus playthrough will end successfully for the bonus abuser, yet no potential bonus abuser should be overlooked because they happen to lose. All players lose most of the time, bonus abusers included. But when looking at advantage play on a larger scale, it represents a loss to the casino.

Games that require special attention

A typical slot has an RTP of around 96.5%, and slots are typically the most popular type of games your typical casino. Logically, the wagering requirement of a bonus caters for this game type. Then there are some games that require special attention, and there are different strategies for how to deal with these.

For instance, Blackjack offers considerably higher RTP. One way to tackle that is to exclude such games from bonuses. Another approach is to associate them with a lower contribution rate to the wagering requirement.

Roulette has yet another interesting property. While RTP is higher than your average slot, it is lower than for blackjack – but at the roulette table, the player can fully control the volatility and hit frequency. On a European roulette, the player can bet on a single number with a small chance of winning (1/37) but get a generous payout (36x) when luck strikes. More interestingly, a player can also spread a stake evenly on every number (0-36) and be sure to lose exactly 1/37 of the bet every round no matter the outcome.

Not very attractive in itself you might say, but if a bonus could be wagered on roulette without a reduced contribution, the player can literally make their way to profits by losing if the wagering requirement is too low. While this might be obvious for roulette, it can be less obvious in other games or in sports betting.

Betting every outcome at a low loss relative to the stake (thus contribution) is a method that bonus abusers use whenever given the chance. If the bonus terms allow for such abuse on e.g., roulette or baccarat, the abuser not only will make a profit, but the profit is 100% predictable. It will be exactly the same every time, right down to the cent.

Exploitable features in casino slots

A far less obvious type of abuse is feature abuse in video slots. Some games come with cool features that offer great retention as players can progress towards a future reward in the game.

Say, a particular symbol appears on the reels now and then, and these symbols are collected and stored for a period of time. Once the player has collected enough of these symbols, the player will be rewarded in a game feature with larger pays than the base game.

An exploit of such a feature is to collect the symbols while playing with bonus funds, then switch to other games once one step away from triggering the feature. Then later return to reap the rewards while playing with real funds once the bonus is completed.

As the game’s RTP accounts for features with larger payouts, it is quite beneficial to play the lower RTP rounds with bonus funds (given to the player by the casino) and the higher RTP rounds with real money, without any wagering requirements on the winnings.

There are literally hundreds of games with such features, and they are not all the same. To understand these features, knowing which games offer them, and recognizing the betting and game session patterns that indicate such exploits is key to handle this effectively.

Other types of bonus abuse and exploits can be tied to the bonus system itself and its logic and flaws. One example would be relevant only if real money plays before bonus money: if an abuser wants to start playing with bonus money, one tactic is to “hide” the real money temporarily. Such as to bet all real money on a sports event and do a cash-out to get most of it back once the bonus is completed. A small price to pay for direct access to the bonus funds.

Another example is where the bonus bets that are settled after the bonus is completed are credited to the real wallet or other corner cases where bonus bets end up as real wins. If an operator’s system has such flaws, it is not a question of if, but when, it will be heavily exploited.

BonusEngine: a toolkit for systematically tackling bonus abuse

Getting to know all the ways in which bonuses can be exploited by unethical players already does half of the job of protecting operators. But the best possible defence against abuse can only be achieved by employing software with features that allow pushing back unwanted behaviours on a large scale.

Our casino and sportsbook bonus system, BonusEngine, was designed with this in mind. With it, you get a complete toolkit to tackle bonus fraud:

  • Conditioning the eligibility of bonuses to exclude blacklisted players (aka bonus abusers), and any other player segments and properties such as country and affiliate tags.
  • Features to prevent hiding real money in order to play bonus money “out of turn”.
  • The capacity to include/exclude and set contribution levels for all games across all verticals.
  • Customizable rules, based on game attributes such as game type, provider/brand, RTP, feature tags and more.
  • Widgets that give holistic overviews of the KPIs and general health of your bonus campaigns, including distribution of completion status, such as the ratio of cleared bonuses vs lost bonuses, and more. A great way to spot a campaign that potentially has too soft terms.
  • Cross-wallet and seamless betting, while assuring that any wins are always distributed back to the correct wallets even when players place mixed bets.

Building strategies for enhanced protection

One very efficient strategy against bonus abuse is to focus on gamification and non-cash rewards. True players enjoy an enriched gaming experience. While there should be rewards, these can come through participation in tournaments, completing bet-driven objectives, and lean more towards free play, such as free spin or free bets.

Such loyalty schemes add great value and entertainment to most players, yet they are not an abuser’s preference, just additional hoops to jump through.

BonusEngine brings a wide range of bonus types and gamification features beyond bonus cash across casino and sports verticals. These include:

  • Cross-product tournaments
  • Multi-level challenges
  • Consolation prizes that are not limited to traditional cashback based on different loss levels
  • Free spins and other promo feature integrations with 30 content providers and counting, all fully automated.

There are also services in the market that can help operators detect multiple accounts created by professional abusers, and that typically assign a risk score based on a set of attributes that in combination paint a picture of a potential bonus abuser. Such scores can, in turn, be used to restrict bonus offers automatically, even in time to prevent the first bonus-triggering deposit from ever being made.

When linked to the EveryMatrix PAM GamMatrix, our bonus system has access to a host of fraud detection and prevention tools. Via TransUnion (Formerly Iovation) integration, our PAM offers top fraud prevention and multi-factor authentication that help you protect against fraudulent activity:

  • Credit Card fraud
  • Identity theft
  • Account takeover
  • License protection
  • Bonus abuser identification
  • Affiliate abusers

To summarise

While it might not be possible to be 100% bulletproof, there are a lot of ways to assure that the right bonuses are given to the right players. Your CRM and player segmentation must play together with your bonus tools to celebrate your valued players, without inviting the bonus abusers to the party.

Knowing what sort of games offer particular advantages when playing with bonus money is a must, and while the exclusion of such games certainly will do the trick, it also will negatively impact your valued players’ freedom to pick and choose. Being able to recognize exploit patterns and act on them is the best approach and it will allow you to include as many of your games in bonus offers as possible.

Regardless of the approach, keep in mind that transparent and solid bonus terms are crucial when it comes to filtering out abusers. Fair and clear conditions will be appreciated by fair players, in the same way acting as gatekeepers against bonus frauds.

Genuine players like a rewarding challenge, a tournament, a free play and other things that boost the fun factor. To bonus abusers, however, gamification and non-cash rewards are time-consuming obstacles compared to bonus money, and this is a key tactic for keeping them at bay while bringing entertainment to real players.

Read all the articles in our series on iGaming bonuses here.

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