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Many online casinos (I'm in Europe) give away free bets (mostly restricted to new players) or offer poker freerolls tourneys (to all players), where you can join for free or for 1c (to guarantee that players deposit some money) and earn some bucks. There are also other complimentary bonuses, which, at a perfunctory glance, imply an expected loss for the casino.

Why is giving away free stuff profitable to casinos? Couldn't players just restrict themselves to these offer (which definitively have a positive expectation for the player) and pass on the other games (that have a positive expectation for the casino)?

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    If you expect gamblers to behave rationally, you fundamentally misunderstand gambling :) – BrianH Jul 22 at 17:32
  • I was with an online casino that would regularly send free offers to entice me to go back and on one of them, I actually won and beat the wagering requirements to withdraw some funds. Not two weeks later, I got an email saying I was no longer eligible for free bets. They want you to log in and play, they don't want you winning. – Stephen Aug 30 at 8:13
  • It's not just the online casinos that do this. The brick & mortar ones do as well (depending on local regulations), e.g. offering $X free play to entice people in, or paycheck cashing that'd entitle you to a spin on a wheel-of-fortune, in the expectation that you'd stay and gamble away at least some of your paycheck. And free drinks while you're playing, of course - something you probably don't get online :-) "High-rollers" could reportedly get various other things comped, like meals & hotel rooms. – jamesqf Aug 30 at 17:59
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I think ultimately this is a marketing tactic. Some players may well be disciplined enough to just use the free stuff and then stop, but the casinos know that many other players won't be, and once they've started playing, will continue to play (and pay to do so).

I've also noticed that in some online casino advertisements, there's a restriction that any winnings from free bets can't be withdrawn until they have been used to place a minimum number of additional bets, reducing the chance that the casino actually has to pay out.

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    To summarize: it's bait. with the expectation that most people who take up the offer won't be strong willed enough to walk away. – RonJohn Jul 22 at 13:23
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It's called a loss leader. They give away a few free bets to entice a portion of those that take up the offer to stay and spend more. If enough people end up spending money that never would have visited the site otherwise, then it's a winning proposition for the casino.

Couldn't players just restrict themselves to these offer ... and pass on the other games ...?

Absolutely. And that individual player would win. But the casino doesn't need to beat every player. They just need to beat enough players badly enough that they come out ahead overall.

To continue the casino theme, it's like playing blackjack. You can't expect to win every blackjack hand. But if you have a good strategy, you can play enough winning hands that you come out ahead overall.

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    They don't even always win, though. You need to sign up for the free money and pass on all other games and stop playing when you have unlocked the bonus and get reasonably lucky playing the promotional game. If you have bad luck you'll still lose the free money. So even the most disciplined people will lose some of the time. – xyious Jul 22 at 16:41
  • @xyious Right, that's my point. Neither side always wins. But the casino most likely comes out ahead overall, either by winning more than it loses or by winning big when it does win. – D Stanley Jul 22 at 18:07
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    That is actually not a loss leader. As per your cited article, a loss leader is when a product is priced such that it no longer yields profits with the hope that the purchase of other products or services will make up for it. One notable example was, I believe, one of the playstation consoles where the console was sold at a loss but since PS owners tend to also purchase more games, they would recoup those losses and then some by enticing customers to purchase a PS instead of another console. – ApplePie Jul 22 at 23:53
  • @ApplePie How is that different? The bets are given away ("sold" at a loss) with the hope that the better will stay and place more bets, making up for the lost revenue. – D Stanley Jul 23 at 2:29
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    @DStanley a loss leader involve different products. This instance here is the equivalent of a sample or a voucher for a free trial. – ApplePie Jul 24 at 1:45
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The other answers have correctly identified that the freebies are a hook to attract new customers. However, the behavioral component hasn't been directly addressed.

If a casino is willing to give away free plays to get new customers, why doesn't a filling station give new customers free gasoline? Why doesn't a grocery store give new customers free bananas?

The difference is, rational versus emotional purchases. Products that are purchased rationally (gasoline - no one has an emotional attachment to buying it) are sold with marketing tactics that appeal to logic (best price on the street, most convenient, etc). Meanwhile, products that are purchased emotionally are sold with emotionally-driven tactics - and as a subset of that, products that are purchased addictively are sold in a way that exploits that behavior.

Gambling is obviously addictive - in the extreme sense, but even for customers who aren't literally gambling addicts, there's an emotional drive to keep playing once you've started. Gambling gives you a rush, but it's inherently unsatisfying most of the time. If you're winning, you want to keep playing so you can keep winning. If you're losing, you want to keep playing so you can recoup your losses. It's not for most people to play once and then walk away. Essentially, on a play-by-play basis, the casino doesn't care if you win or lose, because they know that on average, over a large enough number of players and a large enough number of plays, they will always make money. The games are, of course, literally designed to be in their favor. And there's a built-in sense of loyalty, at least in the short term - once you've made that first play on their game, and you're hungry for your next play, you're probably just going to hit the button and play again - right there, on their game - versus immediately going to some other casino. So, once you've played the first time, you're essentially their customer.

On that note, a casino's entire marketing tactic is designed to get you to make that first play. They know that the system will take care of itself once you have. And the more players take that first play, the more money they make. So, they want to maximize the number of first plays. Hence, their marketing tactics are essentially driven by attracting new customers.

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    Another difference is that anything won on free plays often cannot be withdrawn until you've put in so much real money. Sort of like a petrol station giving you free petrol,but only to drive circles around the forecourt. – TripeHound Aug 30 at 14:52
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Casinos knows that on average, every person that walks into their building (or plays on their online site) has a positive expected value (EV). Therefore, they want to maximize the number of people that walk into their building, or use their online site. If for example, on average, a person walking into their casino is worth $25, then they can give away up to that amount to get people to walk in the door.

The concept is no different than restaurants or stores giving away free food, merchandise, or coupons to get people to visit their location. Of course some people will just take the free stuff and leave, but most people don't because they've already invested the time to travel there in the first place. Note that with online freebies, they are much more likely to offer a match rather than pure free money with no strings attached. That's because the time investment for someone to visit their online site is much lower than attending in person.

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Online casino/gambling is banned in many countries. This means that the payout is not regulated and the online casino operator can tamper payout without burden. In addition, in those countries that allow online gambling, many doesn't have strict regulation and resource to inspect the online gambling software.

Here are some typical hidden small prints and tactics that are not noticed by the gambler:

  • The player cannot redeem the money unless the accumulated gameplay bets exceed $100 (or more than 10 times the amount of the "free token".). So even you are lucky to win $100 from the $10 token, you can't withdraw the money. Not unless you take the winning money and continue to play and pray you will win some money.

  • Algorithm tampering: a small betting will give a higher ratio to "let the gambler wins" compare to a big betting.

Once the gambler get on-hook(AKA addicted), the online casino will reap a handsome profit afterwards.

Bear in mind that, the human brain is naturally subject to gaming addiction. A short term random gains will cause the brain to release dopamine and anticipate for the gambling rewards. People with better self-control will avoid gambling for good. In conclusion, those "bonus" bait is profiteering on people that don't know they have weak self-control.

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