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How to evaluate the benefit of a ROI strategy
1) What is ROI and why is it needed
ROI (Return on Investment) - relative profit of the strategy for the period relative to the invested funds.
[
\ text {ROI} =\frac {\text {Win} -\text {Bets}} {\text {Bets}} =\frac {\text {Profit}} {\text {Bets}}
]Gross ROI (Gross) - excluding commissions/bonuses.
Net ROI (Net) - after all commissions, vager, cashback, rakeback, taxes.
The ROI per sales volume reflects the "value of each unit of sales." Convenient for comparing slots/markets and for wagering.
Important: ROI - photo for the period. To understand whether a strategy is "viable," add risk and significance.
2) Basic calculation options
A. ROI per session/period[
\ text {ROI} _\text {period} =\frac {\Pi} {\text {Turnover}} =\frac {\text {Winnings} -\text {Bets}} {\text {Bets}}
][
\overline{r}=\frac{1}{N}\sum_{i=1}^N \frac{x_i-u_i}{u_i}
]where (u_i) is the bid amount and (x_i) is the refund. Handy when rates vary.
C. Effective ROI with promo
Let the base house be HE (= 1-\text {RTP}) (for slots) or negative EV (for market).
If the cashback (c) is charged to net loss and the rackback/points (r) is charged to turnover, a rough score:[
\text{ROI}_\text{eff} \approx -\text{HE}\ +\ (c \cdot \text{loss_rate})\ +\ r
]Practically: calculate the contribution of the promo as a percentage of the turnover and add to the basic ROI.
3) Example (step by step)
Weekly turnover: 10,000 u
Result: − 250 u (loss)
Cashback: 10% to lose → + 25 u
Raykbek: 0. 4% of turnover → + 40 u
Gross ROI: (-250/10,000 = -2. 5%)
Promotional contribution: ((25 + 40 )/10,000 = + 0. 65%)
Net ROI: (-2. 5%+0. 65% = -1. 85%)
Conclusion: promo reduced the cost of turnover by 0. 65 pp; when matching slots/markets, compare net ROI.
4) ROI vs EV: When ROI "cheats"
On short stretches, the variance is large: ROI can be strongly positive under negative EV (and vice versa).
ROI without confidence intervals and without taking into account volatility is a weak predictor of the future.
Solution: Add risk-adjusted metrics and significance testing.
5) Risk-adjusted metrics
A. RAROI (Risk-Adjusted ROI)[
\text{RAROI} = \frac{\overline{r}}{\sigma_r}
]where (\overline {r}) is the average rate/spin yield, (\sigma _ r) is its standard deviation. The higher, the more stable the "profit for risk."
B. Pseudo-Sharpe for Betting[
\text{Sharpe} = \frac{\overline{r} - r_f}{\sigma_r}
](r_f) (risk-free bet) in a gambling context ≈ 0, so often (r_f=0).
C. CAGR (capital growth rate)
If you reinvest and play the pot share:[
\text{CAGR} \approx \frac{1}{T}\sum_{t=1}^T \ln(1+r_t)
]This reflects a sustainable growth cap rather than just a "one-off ROI."
6) Significance and sample size
Want to understand if your ROI is statistically different from 0? Use confidence intervals.
Rate return variance estimate: get an array (r_i), calculate (\overline {r}) and (\sigma _ r).
95% CI for mean ROI:[
\overline{r} \pm z_{0. 975}\cdot \frac{\sigma_r}{\sqrt{N}}
]If the CI contains 0, there is not enough data to claim that the strategy is profitable.
Approximate calculation of the required N for the growth detection (\delta):[
N \approx \left(\frac{z_{1-\alpha/2}\ \sigma_r}{\delta}\right)^2
]Where (\delta) is the minimum effect of interest (for example, + 0. 5% per turnover).
7) How to consider time: ROI/hour and "cost per hour"
Sometimes two strategies produce the same ROI, but one generates turnover faster. Enter:[
\ text {ROI/hour} =\frac {\Pi} {\text {Turnover} }\cdot\frac {\text {Turnover}} {\text {Time}} =\frac {\Pi} {\text {Time}}
]and EV/hour. Compare by profitability per unit of time if your resource is hours.
8) A/B strategy test (simple protocol)
1. Hypothesis: Strategy B increases net ROI by at least (\delta) pp
2. Plan: the same limits, bank, time, slots/markets are comparable, randomization of the order of games.
3. Metrics: Net ROI, RAROI, drawdown (max DD), RoR on horizon, EV/hour.
4. Sample size: according to the formula above, under (\alpha = 5%).
5. Success criterion: CI for (\text {ROI} _ B-\text {ROI} _ A) does not contain 0 and ≥ (\delta).
6. Fixing the rules: no "move the feet and catch up with the turnover" - otherwise the test is incorrect.
9) How to integrate bonuses and vager
Transfer each bonus as% of sales:- Cashback: (c\times\frac {\text {expected loss}} {\text {turnaround}}).
- Rakeback/points: fixed% of turnover.
- Deposit bonus with vager: (\frac {\text {net benefit}} {\text {cumulative turnover}}).
- Add up these percentages and add to the underlying ROI.
- Be sure to consider the restrictions (max bet, games, term) - they change the variance and actual ROI.
10) Risk management to ensure ROI "lives up" to statistics
Bet size: Use a share from the bank (⅓ - ½ Kelly for positive EV; with negative EV - reduce turnover and rely on promo).
Stop loss/take profit: fix before the start; do not move as you go.
Drawdown Control (DD) - Set the stop and pause threshold.
Correlations: Avoid playing highly dependent events at the same time - this overstates the apparent N and ROI.
11) Typical interpretations
Small + ROI (0. 3-1% per revolution) can be statistical noise at high (\sigma _ r); need a big N.
A consistently − ROI with a narrow CI below 0 → the strategy is unprofitable; save only promo/game change.
High ROI with huge variance is → attractive but unpredictable; check RAROI, DD, RoR.
12) Calculation and reporting checklist
Data collection: date, game/market, bet, outcome, turnover, profit, promotional increase, time.
Metrics: Net ROI, RAROI, Sharpe, EV/hour, DD, RoR.
Statistics: 95% CI, ROI difference test in A/B.
Solutions: scale/freeze/reject strategy; update rate limits and stop rules.
Revision: once a week/month - recalculation, comparison with goals.
13) Frequent errors
Consider ROI without promo and commissions → incorrect conclusions.
Compare strategies with different variance only by ROI → ignoring risk.
Draw conclusions on a small sample → false positive "victories."
Changing the rules in the middle of the test → no validity.
Ignore time → spend hours on low EV/hour.
14) The bottom line
ROI benefit assessment is not only "how much you earned on turnover," but a whole system: net ROI + risk (RAROI/Sharpe) + significance (CI and N) + time (EV/hour). By following this contour, you turn disparate sessions into a controlled experiment, where each adjustment is backed by numbers, and scaling is backed up by real resilience rather than a lucky streak.