... I want to calculate the cost of giving out five thousand bonuses worth 100 each, i.e 500000 total with a turnover requirement of 36 times the bonus.
Well... obviously the cost (to the house) would be 500,000, if all the gamblers meet the turnover requirements.
For this case,
EV = 100 – (3600 * 0.03) = -8
This means house can expect to pay out a net (500,000 – (5000 * 8)) = 460,000, if all 5000 gamblers meet the turnover requirements.
This would be an incentive for new and long-gone gamblers to visit and return. This type of promotion would be paid for via an advertizing and promotion account. It would not be for the casino to realize a short term profit.
My original formula 100*(0.97^36) gives an EV of 33.4 which seems to be in the right ballpark for a 100 bonus?
I’m unfamiliar with this ballpark, and this is not an EV formula that I’m aware of.
Where did you find this formula?
This formula is depicting a return payout pattern of (0.97) on the first wager, and (0.97 * 0.97 = 0.9409) on the second wager, and (0.97 * 0.97 *.097 = 0.912673) on the third wager..., etc... etc..., thirty-six times in sequence. This could happen but it’s very unlikely. It certainly isn’t an expectation for the above parameters. A pay out like this would be a major disincentive to gamblers –exactly the opposite of what casinos want.
GA
--. .-
!
