It has become increasingly obvious that more and more online casinos are giving away prizes in the form of gifts, cars, holidays and cash than ever before, which may lead you to wonder where the money to pay for these actually comes from and if it comes out of their net profits or the gross sums earned by the casino.

Recently we have received questions regarding this issue from player who are concerned that if the cash is taken from the gross income of the casino then this may affect the casino games payouts adversely and players will not receive the full payback percentages as advertised by the casino.

While this is a very legitimate question, it is important to understand and distinguish the difference between prizes that are awarded when a winning bet or combination is hit and prizes that are awarded through promotional draws and loyalty points.

When a prize appears on the paytable of a slot machine or video poker machine then the value of this prize is built in to the long-term payout of the machine. So for example, instead of a payout of $50,000 in cash, a car to the value of $50,000 is offered in its place. This means that in the long run the machine has the same long term payout rate which is paid from the casino’s bankroll and so these do not affect the payouts of the machine adversely.

Prizes that are awarded from promotional draws or loyal promotions are on the other hand, usually covered by the casino’s marketing budget.

Then there are prizes which are awarded randomly to a player currently playing a machine and where the money for these comes from can be either out of the payout or from the marketing budget. A classic example of this in a land based casino is the case of the opening of Mandalay Bay in Las Vegas. While the machines were tighter than the norm for the strip, the casino made up for this with random bonuses. While the machines would have paid back 90% on their own, the casino awarded players with an extra 2% in random bonuses increasing the overall payout rate to 92% although these prizes could also have been covered by the marketing budget for the casino.

So in conclusion, no matter where the funding for prizes comes from, it generally does not affect the payout percentage of the casino game concerned. A 90% payout rate remains 90% regardless of what prizes the online casino chooses to give away, so just enjoy the games and if you happen to win a prize, then great but if you don’t you are not getting cheated in any way when it comes to payout percentages.