Hey there! Have you ever wondered how all those free casino slot apps make money when they don‘t charge you a dime to play? As an avid slot enthusiast myself, I was curious to look under the hood and understand their business models. In this guide, I‘ll walk you through the sneaky ways these apps generate revenue. I promise, it‘s pretty fascinating!
The short answer is: even though the apps are free to download, they make their money through in-app purchases, rewarded video ads, collecting data, and tying into real money gambling apps.
But how exactly does all this work? And are these free slot apps worth playing or just a waste of time? By the end of this guide, you‘ll understand everything about how these apps work and how developers profit. Let‘s get started!
How In-App Purchases Work
The primary revenue stream for every successful mobile app comes from in-app purchases, referred to as IAPs. Slot apps are no exception.
IAPs refer to any optional digital items, upgrades or bonuses that users can buy within the app. Here are some of the most common IAPs found in slot apps and free-to-play casino games:
Coins – These let you play more spins without having to wait hours for your free coin allotment to regenerate. Prices range from $1.99 for a few hundred coins to $99.99 for a huge jackpot of coins.
Chip bundles – Chips work similar to coins but are used for betting/wagering in poker, blackjack, roulette and other casino games. Chip packs can cost as much as $199.99!
Ticket bundles – Tickets give you chances to play special prize wheels or tournament games to win bonuses. The more tickets you have, the more prize draws you can enter.
Monthly VIP Status – For a recurring fee (usually $4.99-$19.99 per month), you get VIP perks like free coins, tickets, exclusive games and even real cash back.
Extra spins – Spins let you play slots without using your coin balance. You can buy spins in bundles from 5 to 500 spins at once.
According to data from SensorTower, during 2019 the top 25 grossing casino apps averaged $38 million in global revenue…PER MONTH! That‘s over $450 million in annual revenue just from IAPs.
Some other surprising data:
- The average slot app player spends $162 per year on IAPs
- 2.7% of players (referred to as whales) drive 70% of mobile casino app revenue
- Less than 5% of players drive almost all the IAP revenue
Clearly, IAPs are lucrative for slot app developers. Even if only a small percentage of players make purchases, it still adds up to giant profits given the millions of active users.
Rewarded Video Ads – Getting Paid to Watch
Here‘s another way slot apps monetize you for free: rewarded video ads. I‘m sure you‘ve seen these before – full screen video ads that you can voluntarily watch in exchange for virtual coins, chips or spins.
Rewarded ads work brilliantly because they feel like a fair value exchange to the player rather than an annoying interruption. We choose to watch the ads in return for something beneficial.
Developers can make anywhere from $15 to $50 for every thousand video ad views. While that may not seem like much, it adds up fast with millions of daily active users. The more players watch, the more profit.
Experts estimate that rewarded ads now make up 45% or more of revenue for the top free slot apps. Advertising has become more lucrative than even in-app purchases. The average player watches 48 ads per day worth over $100 million in annual revenue across the top 20 apps.
That‘s right – just by playing "for free" and watching ads in slot apps, you could be generating over $100/year in revenue for the developers! No wonder rewarded ads have exploded in popularity.
Connecting to Real Money Apps
Now, before you get any bright ideas…the coins and chips won in free slot apps can‘t actually be exchanged for real cash. You can only use them to play more games.
However, developers have found ways to leverage their large player bases in free apps to drive traffic to real money gambling apps. The casino game you play for fun might just be practice and marketing for the "real" version where you can bet real cash.
For example, DoubleU Casino and High 5 Casino are free social casinos owned by DoubleU Games. But DoubleU also runs DoubleDown Casino, a popular real money gambling app.
By getting players hooked on the free versions, DoubleU can then upsell a small percentage to its real money games. The free apps act as a powerful acquisition tool.
This cross-promotion works exceptionally well in online sports betting. DraftKings, FanDuel, BetMGM and other sportsbooks offer free daily fantasy sports apps to build their brand. A portion of those users eventually migrate to the paid real money betting.
So while the free app itself may not generate revenue, it can drive high-value players to affiliated real money gaming properties.
Data Collection & Targeted Marketing
Very few mobile apps these days are truly "free." There‘s always a catch, and for slot apps the currency you pay with is your data.
By getting you to login or connect your Facebook account, slot apps can gather valuable analytics on player demographics, behaviors and preferences. This player data enables them to target push notifications, special offers, and advertising to encourage you to keep playing and spending.
Casual spinners may find it harmless, but the apps leverage powerful data science to identify, retain and squeeze maximum value from big spenders.
Some warning signs you may be overspending in "free" apps:
- You feel guilty about how much you‘ve spent
- Friends/family express concern about your spending
- You play primarily to win back losses rather than entertainment
- You‘ve spent over $500 in the past 3 months
If these apply, consider taking a break or uninstalling the apps to avoid addiction-like behavior. Moderation is key with any games of chance.
Traditional Mobile Ad Networks
Lastly, good old fashioned display and video ads still generate a chunk of revenue for slot apps. Even if you don‘t make any in-app purchases, the apps earn money when you view and engage with the various ads.
Mobile ads come in different forms:
Banner ads – These appear along the top or bottom when playing games. They earn developers money each time they‘re displayed (called an impression).
Interstitial ads – These full screen ads popup in between games or app sections. Players have to view the ad before tapping the X to continue.
Video Ads – Short video clips play before starting a new game. Players can skip them after 5-30 seconds.
Ad earnings are based on CPM, which stands for "cost per thousand impressions." Rates vary based on factors like geographic targeting and how intrusive the ad format is.
Banner ads earn only about $1-$5 per thousand views. But full screen interstitials and video ads can earn up to $10-$30 CPM. With millions of combined impressions per day, free slot apps easily generate six and seven-figure incomes from ads alone.
Next time an ad pops up in one of these "free" apps, remember it‘s how the developers make money without charging an upfront fee. The revenue adds up at massive scale.
Are free slot apps worth playing?
Given how they‘re designed to maximize monetization first and gameplay second, you may wonder if free slot apps are even worth playing compared to real money gambling sites. Here are some pros and cons to consider:
- Totally free entertainment – no need to deposit any money
- Huge variety of slots unavailable elsewhere
- Engaging themes, graphics, and bonus features
- Leaderboards and social engagement with other players
- Chance to win big jackpots on real money games
- Repeated ads and constant IAP upsell can be annoying
- Some apps have lower payout rates than real online slots
- Much higher volatility versus slots in real casinos
- Questions about whether results are truly random as claimed
- Rewards can‘t be withdrawn for real cash
For casual entertainment play, the pros generally outweigh the cons. But serious gamblers trying to win money are still better off playing real online or land-based slots.
As with any gambling-style game, just be smart. Set a strict budget for IAPs and know your limits. Never bet money you can‘t afford to lose.
Here are a few final tips to keep your play safe and responsible:
- Disable IAPs in your device settings to avoid overspending
- Take breaks and set a time limit on gameplay
- Don‘t play when emotional or to escape stress
- View it as entertainment, not a way to make money
- Stick to claiming only legitimate rewards
- Keep winnings separate from everyday funds
Ultimately, playing free can be a great gateway to see if you enjoy slots before risking real wagers. Have fun exploring all the creative themes and gameplay innovations not found in casinos. Just use common sense so your enthusiasm doesn’t get exploited.
Over to you – what‘s your experience been with slots or casino gaming apps? Do you think they‘re fair and ethical to players? Let me know in the comments below!