In his first guest post for NEXT.io, Greco solutions consultant Tim French explores why addressing 'advantage play' can be far more complicated than it might otherwise appear.
Most of us in the industry would have heard the words 'advantage play', or at least seen the movies and heard the tales of card counting, edge sorting, or even reading a player's tells with futuristic technology like they did in Oceans 13. What was that device called again?
Where the online arena is involved, however, advantage play is often confused and hard for casino managers and marketing teams to spot, especially if GGR is the primary metric for success.
Although it might seem natural to segment players by GGR, this can be counterintuitive. Why is so is examined below.
Why is this a problem for casinos?
The issue is when casinos fail to detect advantage play behavior sooner. Most operators will only act (i.e. stop providing bonuses) after a player is a net winner. To most, this appears as though it must be sensible: "Why would I stop providing bonuses to players if they are just losing?"
Unfortunately, though, by this point the damage is done — the casino has run a negative value bonus promotion. I know this may be sounding like scare mongering, or voodoo, but it's simply mathematics. The next section should help with the visualization of this.
What is advantage play?
Let's return to basics to start with. Advantage play is a name for a collection of very strategic behaviors in which the players are optimizing their play to achieve maximum returns, generally through mathematical methods and long-term expectations at https://norskecasinoguiden.com/. All fairly straightforward and self-explanatory.
A further little-known fact about the behavior of advantage play is that the majority of "bonus hunters" play at an 80% bust rate (and sometimes as much as 90% at times), meaning that they lose 80% of the time. This makes them appear to be losing players — profitable in the short term for the casino.
But they are using the law of averages, and the big win that the player periodically gets wipes out their previous losses.
Case study: 100 advantage players
The principle is illustrated in the table below for 100 advantage players:
- Each bonus is a 100% match bonus of £100, where every player is given an additional bonus if they are not in front of the house overall
- They both play the same game with the same volatility, RTP, and stake size
- The casino only stops bonusing when the players show they are winning overall
The result? On probabilities, this simulation has the casino lose money continually because advantage players bring value in the long term whilst being initially profitable, and losing players can play on until they are profitable.
You will see that there are a few occasions where the casino is still in losses, but no players are eliminated. This is because the players are still within the positive GGR range to the casino.
The wins they have received in that round hasn't made the player net positive yet. In this finished example, across the 27 rounds and 100 players, the casino has cumulatively lost £68,826.
Why GGR alone is not enough
Some, possibly the majority of operators use additional metrics alongside GGR to try to identify valuable players:
- Total amount wagered over time
- Deposit-to-bonus ratios
- Cash-to-bonus turnover ratios
Whilst useful to calculate player value, these have a tendency to overlook gameplay behaviour, which is crucial to identify bonus-abusing players.
What casinos can do
To get past this challenge, casinos must: Go beyond GGR and other traditional measurements to analyze player behaviour in depth.
Follow patterns in play, there are 3 variables a player can control to change the value of a bonus: Their bet size, the RTP of the game they are playing, and volatility. Take action in real time, and at the first sign of the behaviour being a pattern.
This can obviously be a lot, especially when most casinos utilize manual resources to review gameplay. Due to this manual process, it can take months for operators to identify advantage play (we have worked with some cases where this occurs in over 12+ months), meanwhile, the operator has lost thousands.
There are software programs available that can automate this process though, and get a good notion of the behaviour after the initial bonus has been played. That is what we do at Greco.
Takeaway
While GGR and other traditional metrics provide a snapshot of player value, they fail to account for strategic behavior that can harm a casino's bottom line. By focusing on behavior at the 'game play' level and understanding how advantage players operate, casinos are better able to protect their assets and render their bonus schemes more efficient.
Internet casinos should be on the forefront of industry technologies, unfortunately, we are still far behind other industry groups in terms of data technology. Too much of our data analysis is retroactive instead of proactive. With the technology we have, it simply shouldn't be that way about it.