In this article we examine the use of reward schemes by gambling sites in the UK to enhance customer loyalty.
Loyalty rewards are a common practice used by businesses to retain customers, improve customer value and increase profits. Rewards programs come in a range of formats, from simple loyalty cards handed out by your local coffee shop that get you every fifth latte for free, to huge multi-partner loyalty programs like Nectar, where points can be traded for money off goods and services at over 20 businesses including Esso, Sainsburys and eBay.
A strong loyalty program can be very effective for online retailers, with studies showing upwards of 65% more spend amongst customers who are part of one. So, it’s no surprise that online gambling operators have learnt to utilise these tools to improve customer retention as well. Rewards at online casinos and betting sites range from simple free money deals and cash back offers to non-cash luxury items.
Here are the most common types.
‘Free’ Bonuses
Since the first online casinos started taking bets back in the late 1990s, bonuses have been used by casino managers to bring customers through the door and keep them coming back. Operators have found multiple ways to configure these ‘free’ gifts, and some are better value than others.
Bonuses are funds added to a players account which can be used for wagering on games. But unlike real money, bonus funds are not withdrawable. Instead, they are placed in a ring-fenced account area and must be wagered a pre-defined number of times before they are transferred onto the real cash balance. Typically, a £10 bonus may have a 30x wagering requirement attached to it. That means the recipient must wager £300 before the bonus and any winnings generated are converted into cash.
Of course, the reason these restrictions are placed on bonus funds is because it is more than likely that the player will have lost the bonus before they hit the wagering requirements. Still, the offer does at least give the player the chance to try the games with free funds, and with the outside chance of taking some winnings away with them.
Casino bonuses may come with other terms and conditions that restrict their value to the player. It is not uncommon for there to be a limit on withdrawals of winnings from bonus funds which can be £100 or less. There may also be a time limit after which bonus funds are nullified.
Free Spins
Alongside bonus money, many casinos also give away free spins to play popular slot games. These come with similar restrictions so that any winnings from the free spins must be wagered a pre-defined number of times before they can be withdrawn.
These are perhaps the most popular reward tool for any casino as are easy to message to the customer, especially when tied to a big hit game like NetEnt’s Starburst or Play n Go’s Book of Dead. Consequently they can bring punters back through the doors in big numbers.
‘Keep What You Win Deals’
In the last decade some gambling operators have moved away from bonuses with wagering requirements and withdrawal restrictions. In particular, the UK casino Play OJO has made a play to brand itself as the fairest gambling site out there because winnings from free spins are always paid in real cash rather than bonus funds.
This move to ‘keep what you win’ deals, a tool also utilised by MrQ, a mobile bingo and slots site, shows loyalty and retention programs in the online gambling industry are evolving in response to changes in player attitudes and the regulatory environment. The UK regulator, the Gambling Commission, has cracked down on opaque and prohibitive terms and conditions in bonus offers recently and customers are pushing back on unfair terms as they have become more savvy. You can see that in this thread from the popular Casino Meister forum in which a slots player unpicks the terms of a recent offer.
Cashback Deals
Another tool in the casino operator’s armoury is the cashback deal. This is also sometimes called ‘insurance’ for the player. Typically, the casino will give back up to 5% on losses which are calculated as wagers minus wins. So, if a player wagers £200 and wins back only £150, their losses are £50. At 5% cashback, the player would receive £2.50 back.
Cashback deals are used less frequently than free spins or bonuses, perhaps because they are more difficult to message to the customer, but also because they are less attractive. Most players would rather receive a simple booster to their deposit than wait to be on the end of a losing streak before being given their reward.
Nevertheless, highly rated UK slot site All British Casino has built a reputation for great value gaming thanks to its 10% lifetime cashback deal for all players, a unique deal that has stood the test of time, and one that reviewers think makes it stand out from the crowd.
Loyalty Programs
Loyalty Programs are the most sophisticated of all the customer retention tools available to online gambling operators. They can be costly to set up and run, and for that reason not all casinos and betting sites have them. However, when designed properly, loyalty programs can be good for both the operator and the players.
A casino loyalty program works in much the same way as any retail loyalty program does. The more a customer spends, the better rewards they get. Spend is usually defined as wagering on games, though it can also be deposits. The best loyalty programs have loyalty levels and progress bars displayed in the customer account to show how far they are from reaching the next level. At each new level a bonus will be granted and players may start accruing points at a faster rate. You will see this in the loyalty program of casinos like Casumo and Play OJO in the UK.
At the top end of loyalty programs such as these, players may be inducted into a VIP program which includes benefits like a personal account manager, faster withdrawals, and gifts like laptops, holidays and tickets to big sporting events or concerts. If you are casino player and spending significant amounts each month then finding a site which offers rewards like these is worth your time. Typically, big name brands like Bet365, Will Hill or Grosvenor Casinos give the best rewards to their VIPs.
How Will New Regulation Affect Loyalty Rewards
Let’s conclude by looking at the regulatory environment and how it might impact loyalty programs.
In the UK the gambling industry is currently going through a new round of regulation. A white paper on reform was published by the government in 2023 and a new Gambling Act is expected in 2024.
Alongside restrictions on stake levels on online slot games and affordabilty checks to ensure players don’t spend more than is affordable, the paper outlines curbs on VIP programs at UK casinos. News of this ahead of the white paper had led to some concern that the new rules could damage operators’ abilities to retain customers. However, in truth, much has already been done by the UK Gambling Commission to crack down on VIP schemes that deliberately target customers who are at risk of gambling addiction and the white paper doesn’t take things too much further. So, whilst the scale of VIP programs may be reduced, for players who can still afford to spend big and enjoy a sizable wager, high roller bonuses and loyalty schemes, or something like them, will still be available.
Final Thoughts
In conclusion, there is much that is done by gambling operators to attain and retain customers which is good news for fans of casinos and betting in the UK. Whilst new regulation may introduce some restrictions on which players can be rewarded for their spend, we expect operators to continue using the tools outlined in our article for years to come.