Expected value (or ‘EV’) is the most important idea to understand when completing casino offers.
The EV of a casino offer is basically the average amount you would lose or gain per repetition, if you could repeat the offer an infinite number of times. If an offer has positive EV, then completing it over and over would eventually return an overall profit, whereas if an offer has negative EV, then repeating it over and over would eventually return an overall loss.
This doesn’t mean that the EV of an offer is the amount you’ll win or lose from it each time. You might complete an offer with positive EV 10 times in a row and make a loss each time, but if you carried on and completed it enough times, it would eventually make an overall profit. Likewise, you might complete an offer with negative EV 10 times in a row and make a profit each time, but if you carried on you would eventually make an overall loss.
Making Money from Expected Value
EV is how casinos make their money. Playing standard casino games will always have negative EV – this is known as the ‘house edge’. You might play roulette a few times and come away with a profit, but if you place enough bets over enough time, the casino will end up winning, because the game has negative EV for players.
However, when you take advantage of positive EV bonus offers, you can turn the tables on the casinos and play them at their own game. You might make losses along the way, but if you complete enough positive EV bonus offers, you will consistently return a profit in the long run.
The key to making positive EV offers work for you is volume. As you complete more and more offers, your actual average profit per offer should eventually get closer and closer to your theoretical expected value per offer, because of an effect known as ‘the law of large numbers’.
Calculating Expected Value
Calculating the EV of a casino offer is quite complicated because there are many factors involved. EV is significantly affected by things like stake size and game variance. There are some simplified EV formulas around that purport to calculate the expected value of casino offers, but you should be cautious about these because they omit a number of significant factors.
Rather than deal with complicated mathematics, we recommend using the Casino Cruncher to work out the estimated value of an offer. This simulates completing the offer thousands of times and generates real-life values from the simulations.