The Dutch Gaming Authority (KSA) has conducted a study on cashback bonuses in the online gambling industry, finding that more needs to be done to reel in operators who offer loss-based bonuses.
The concept of these bonuses is straightforward: players receive a percentage of their losses back in the form of cash back into their accounts. They are forbidden in the Netherlands, however, because the KSA believes they encourage customers to gamble more and take greater risks than they might otherwise take – be they with larger bets or bets with worse odds – because they know that they will get some of their losses back.
No gambling operators were punished as a result of the investigation’s findings, but one was issued a formal warning for offering what the KSA is now calling a “bonus based on loss.” Two others were sent letters to make sure they understood the regulations. At least one of the operators offered lost-based bonuses with payments other than direct cashback; the KSA clarified that any bonus based on loss was not allowed, regardless of the type of refund.
“At the KSA, the interests of players are central. A safe gambling market and the prevention of gambling problems are high on our agenda,” said KSA Chairman René Jansen.
“To protect players even better, we immediately clarify the definition as a basis for strict supervision. Any bonus that is in any way linked to a loss is prohibited,” he added.
Online poker works differently
Loss-based bonuses, if offered, are typically seen at online casino sites, as opposed to online poker rooms. Online poker rooms issue bonuses based on how much rake a player generates. It does not matter if the player wins or loses a hand, cashes or not in a tournament, or is up or down for a session. Rake is rake.
For example, partypoker gives players one loyalty point for every dollar they generate in rake. Terms might vary depending on the bonus, but with one bonus the site has right now, players must earn 12x the amount of the bonus to receive the full amount. The bonus is released in increments, so it is possible to still earn some if one can’t play enough to receive it all.
Way back in the day, the early-to-mid “aughts” when online poker was really just starting to grow, online poker bonuses were much easier to earn. Many sites – I remember partypoker was one of them – only required a certain number of raked hands to unlock deposit bonuses, not cumulative dollar amounts. Thus, it was very easy to earn hundreds of dollars in bonuses by playing at micro-stakes tables. Unfortunately for us players, the poker rooms eventually wised up.