Sweepstakes drawings typically rank near the bottom of the list, mainly because players don’t see themselves having a realistic chance of winning.
It’s difficult to fault that logic. By design, sweepstakes typically pay out one or two massive prizes, a few slightly smaller ones, and a moderate number of tiny awards. Everyone else goes home empty-handed.
But there’s a huge difference between a sweepstakes drawing held at an Atlantic City or Las Vegas strip casino, and one held online at Tropicana Casino, for a few reasons:
- Land-based casinos are more heavily trafficked than New Jersey online casinos, by a wide margin. In 2015, Atlantic City’s eight casinos generated $2.24 billion, versus $125 million for NJ online casino sites.
- Online casinos typically place a cap on the number of entries a player can earn per day, which gives casual gamblers a fighting chance.
- On most sites, the promotional period is only a few days. Land-based sweepstakes promos often last a calendar month, or more.
In short, NJ online casinos will generate far fewer entries than those held at brick and mortar venues. Fewer entries, better chance to win.
So, if there’s any market where sweepstakes promos are worth participating in, it’s in New Jersey.
How do you estimate the value of a NJ online casino sweepstakes promotion?
There’s no quick and completely accurate way of estimating the average player value of a sweepstakes promotion, but making a rough guess isn’t all that difficult.
Let’s say a Virgin Casino sweepstakes guarantees $10,000 and pays 100 players, which is about par for the course. If we knew how many total entries there were, we could easily assess the promotion’s worth by dividing the prize pool over total entries. For instance, if there were 5,000 entries, then the average value of the promotion would be $2 ($10,000 prize pool/5,000 entries).
Predicting total entries might initially seem impossible, but it’s not.
Revenue charts provide a big clue, so let’s start there. Together, Tropicana and Virgin Casino rake in approximately $3 million a month in gross gaming revenue, which breaks down to roughly $50,000 per site, per day. Assuming Virgin holds $0.05 per every dollar wagered — a fair estimate — then $1 million ($50,000/0.05) is being wagered on the site daily.
Now, we need to guess how much the average player wagers per day. This is impossible to know for sure, but given the tendency of the state’s many high-rollers to wager $1,000 per day or more, $500 feels about right. So, if $1 million is wagered per day, and the average player wagers $500, that means there are 2,000 active players per day. Actives players is not synonymous with total entries, but close enough.
Great. Now just plug in $10,000 for prize pool, and 2,000 for total entries in the following equation.
- Average player value = prize pool / total entries
The average player value in this example is therefore $5. In reality, there are other variables to consider, such as the length of a sweepstakes, whether the entries are capped at a certain number, and what percentage of players actually opt-in. But again, for our the average gambler’s purposes this is good enough.
Once players have estimated the number entries, determining their odds of winning a prize of any sort is easy. Just divide the number of winners, in this case 100, over the number of entries (2,000).
- Odds of winning = # of prizes awarded / total entries
In this instance, 5 percent of players will walk away with something.
How do sweepstakes stack up against match bonus offers?
Outside of the initial welcome match, the monetary value of match bonuses tend toward the smallish side. Caps between $50 and $100 are the norm, so let’s use a number in this range as a guideline.
If players receive a 100 percent match up to $100, but must wager the bonus 20 times on slots before it clears to their cash wallet, the effective cashback rate is 5 percent.
By comparison, a sweepstakes promotion might task a player with wagering $50 per entry, capped at three entries. At an average return of $5 (as per the example above), the effective cashback rate is 3.33 percent — lower, but certainly not that much lower, than the cashback rate of the average match bonus.