The Math of Welcome Packages: How Upfront Bonuses Compare to Long-Term Rakeback

Rakeback is undoubtedly one of the best types of bonuses when it comes to improving your expected value at the tables. It’s a steady return on any and all rake that you pay. Welcome packages, meanwhile, offer a one-off boost to your bankroll with potentially huge matches on deposits.

So, how do the two compare? We’re here to answer that question and to break down the numbers.

Welcome Match Bonuses

Welcome packages typically offer an immediate bonus fund credited directly to your account in the form of a match on your first deposit. For example, 7Signs online casino offer a 100% match of up to $750. Whatever amount the player deposits, whether that’s $100 or the full $750, is matched in this way.

Other types of welcome bonuses include instant tokens for games. This is often a certain number free spins on slots, such as 100 free spins worth $0.10 per spin.

Understanding Wagering Requirements

On the surface, these upfront bonuses seem almost too good to be true. Instant funds in your account. What is stopping you from quickly withdrawing to double your money without even playing? The answer is wagering requirements.

Wagering requirements dictate how many times the player must wager their bonus funds before any of the funds or winnings can be withdrawn. For example, if the wagering requirements are 35x on a $100 match, you’ll need to wager $3,500 to withdraw anything from the bonus.

This prevents players from quickly withdrawing or spamming bonuses to outright beat online casino games.

Expected Value from a Match Bonus

Given these conditions, let’s do a simplified calculation to work out the value you can expect to gain from a welcome match bonus with wagering requirements.

In this example, we’re playing a slot game with a 95% RTP using a $100 match bonus fund. The wagering requirements are 20x, so we’ll need to bet $2,000 to clear the bonus. Wagering $2,000 at 95% RTP gives an average expected value of $1,900. If you add on the $100 bonus gained, your total is $2,000, which is the same amount we had to wager.

In the above example, you’d be playing slots at a near enough breakeven EV for the duration of the bonus. If wagering requirements are higher, which they nearly always are, it’s back to a losing proposition, although you’ll still improve your value compared to playing without the bonus.

Comparison to Poker Rakeback

Poker rakeback, as many readers of the site will already know, gives players a set percentage return on any rake they pay. Rake is taken from cash game pots or paid as an entry fee to tournaments.

There aren’t as many tough conditions associated with poker rakeback. Effectively, what you are getting is a discount on rake. For winning players, this can represent significant value.

Calculating Rakeback Returns

Rakeback amounts are easy to calculate. Take the percentage of your deal and apply it to the amount of rake that you pay. For example, let’s say that you have a 20% rakeback deal. If you pay $1 in rake during a poker session, you get $0.20 straight back in your account. If you pay $100 in rake, you’d get $20 back.

For winning or breakeven players, rakeback represents direct value added straight to their bottom line. However, it’s important to be aware that rakeback amounts are quickly dwarfed for players who consistently lose at the stakes they play.

You can use the Rakeback.com calculator to figure out the value of your rakeback deal by the hour according to your stakes and volume. deal by the hour according to your stakes and volume.

Bankroll Volatility and Risk Mitigation

The appealing aspect of online casino welcome bonuses is that they are instant. As soon as they appear in your account, you can use the funds to play your chosen games. The problem comes if you start chasing the requirements needed to release the bonus, dipping deeper into your own bankroll to do so.

Rakeback, on the other hand, comes steadily as you play. The risk here is playing at higher stakes than usual in an attempt to maximize rakeback. This is only viable if your skill level and bankroll allow it. Otherwise, stick to the games you would usually play.

Short-Term Boost vs. Lifetime Value

To sum it up, welcome bonuses offer a short term boost with funds that can be used to play right away, but can’t be withdrawn before extensive conditions are met. They are ideal for casino or poker players to gain a little extra value in the short term.

Rakeback is a longer term type of bonus with a set percentage value. It’s true value fluctuates depending on the stakes that you play and your winrate.

Of course, these two types of bonuses are not in competition. You can use one, the other, or both whenever they are available at your chosen online casino or online poker site.