The Effects of Variance on Bonus Clearing

April 17, 2013 Posted in Bonuses by No Comments

The basic strategy for clearing casino bonuses successfully is to choose games with a low house advantage. That one is pretty obvious. If you need to wager $2,000 to clear a gambling bonus, low house advantage games give you the best chances possible of clearing the bonus with minimal losses.

(Note: see this post for a discussion of how the house advantage affects the expected value of any casino bonus)

But something else to keep in mind is the effect of variance on clearing a bonus. The house advantage of a game tells you what you can expect to win or lose over the long term, but variance describes the natural ups and downs that you see over the short term.

Let’s use an example to show how variance comes into play when clearing bonuses:

You make a $100 deposit and get a $100 bonus. The terms and conditions of the bonus state that you must wager 20x times the deposit + bonus amount. So, you know that you need to place a total of $4,000 in wagers.

You decide to play slots to clear the bonus. Slots aren’t known for having the lowest house advantage, but you like them anyways. Ok, fine. Now, the next decision you must make is how much money to wager on each spin of the reels.

You have $200 in your account right now. Would it make any sense to wager $200 on each spin of the reels? If you did so, you would only have to spin the reels 20 times to clear the entire bonus. Of course it’s not a good idea.

The odds of losing that first spin are too high. Even if the odds of losing that first spin are only 41.2% (or whatever), it’s still not a good idea. And even if you win the first $200 spin, you will have to spin the reels 19 more times after that. All it takes is a little variance in the wrong direction and you’ll lose both your original deposit and the bonus.

The better way to clear this example bonus is to place a bunch of small wagers. The smaller your bets, the more likely it is that your bankroll can handle the natural variance that comes with gambling. This holds true for all casino games.

The other thing to keep in mind is how much effort you’re willing to devote to clearing any one casino bonus. Do you really feel like placing 4,000 $1 wagers on slots? If so, go for it. If not, you’ll have to weigh your risk tolerance against your motivation to hurry up and clear the bonus.