In this comprehensive guide, we will delve into the world of earning “free” cruises. We will focus on Royal Caribbean’s casino points (since they have a very transparent program), exploring the probabilities, cost, and value of earning “free” cruises and other perks.
I’m not really one for casinos. Everytime I’m in Las Vegas, I can’t help but think about how the grandeur of Las Vegas casinos is a direct reflection of how much money they are taking in from people who are voluntarily going there. However, I recently came across something interesting. Some family friends have been getting extremely lucrative cruise “offers” — including many cruises for “free” (before taxes, fees, and gratuities), plus freebies such as drinks and “free” casino cash, after burning through a mere $200 on slots on a recent cruise. Considering that we love to cruise as a family vacation, I’ve gone on a weeks-long deep dive to learn everything about how this system works and whether these “freebies” may actually actually make controlled and thoughtful gambling a good deal.
For this article, I’ve chosen to deep dive on Royal Caribbean’s program, but the math below should hold for any similar program.
Section 1: An Overview of the Casino Offers
Let’s start with the awards. Can you really earn something of significant value by spending some time in the casino? The answer is yes – and I love that Royal Caribbean is somewhat transparent about their program. Let’s take a look at these three types of potential rewards.
The first two types of Royal Caribbean casino awards are well defined by RC. In other words, if you do this, you get that. Those are the “instant rewards,” which you can earn by hitting gambling thresholds on a single cruise, and “Tier Awards” are the ones you build up to during the entire year across multiple cruises.
The third type of award are the casino offers — which are displayed in your Royal Caribbean portal. These offers vary from person to person and are likely a mix of the RC marketing department targeting different demographics. However, they can be very lucrative, often including free cruises.
Instant Rewards:
On each cruise, the casino will have a sheet posted that looks something like this that defines the Instant Rewards for that cruise.
(Sorry for the crazy glare. These sheets are typically covered in plastic, and the casino lights are captured in the background!)
These sheets also have two columns. One is the instant reward you earn no matter what, but the right column defines an even better reward you will get if you go ahead and make plans while you are on your current cruise. (If you don’t want to spend valuable vacation time sitting in the “Next Cruise” office, you can just put down a $200 deposit via the RC app, and make your plans within 7 days of disembarking.)
Looking at the 1200 point row of the chart above, you will see that you get $300 off, but if you go ahead and put your deposit down, you get a “Complimentary Interior Stateroom on Select Dates.” In other words, you get a free cruise for two (Interior room) when choosing from a list of cruises. And that list to choose from isn’t bad at all. I’ll show you how to find the list online, but keep in mind that at the 1200 point level, you would be choosing from a list which is heavily front loaded with cruises leaving in the next 3-4 months. RC wants to get you back on board quickly! (As a side note, the $200 deposit can go toward taxes, fees, gratuities, or other onboard charges.)
The second row I want to draw to your attention to is the 2000 point row. Here you get an Interior Room (or sometimes Balcony or Oceanview) from a list of select cruises. But on this list, you have a full year of dates and sailings to choose from. This list is impressive, often spanning a dozen or more pages!
- To view these lists, go to RC’s Offer Code Lookup site
- Oct 2024 – North America 5 nights or Less Codes.
- Notice the pattern — It is two-digit year, two digit month, then a 3-digit code for the tier (such as A07).
- 1200 points: 2410A07
- 1500 points: 2410A06
- 2000 points: 2410A05
Tier Rewards:
In addition to Instant Rewards, there are also tier awards. These consider all of the points you have earned and accumulated during the cruise year (April 1 – March 31 of each year). By earning 2500 points in a year, you will be considered “Prime” — which gives you one free cruise for 2 people (not including tax, fees, and gratuities) in the following cruise year. (In other words, if you earn it in the April 2023 – March 2024 year, you can use your free cruise between April 2024 – March 2025.) This is an impressive reward which allows you to choose an interior cabin on (nearly) any RC sailing, up to 7 nights, so long as it is not a ship that is not in its first year and not within a couple of key blockout dates such as Christmas and Spring Break. This tier reward is in addition to the instant reward — so for example if you were to earn 2500 in one cruise, you would earn both the instant reward and the prime reward!
In addition to the free cruise, you also get free drinks from the casino bar (when the casino is open) and 30% off of onboard internet costs (if you choose to purchase internet access). See the full list of tiers and benefits here. Prime Tier also lists discounts on additional cabins for other family members — however, based on my research this particular perk is ambiguous — somewhere around 5% discount — and is often worthless when compared to other promos — so I won’t consider the additional cabin discount to have any value for this analysis. (Note: If you hit Prime while on a cruise, they will give you a “Prime” sticker so you can immediately start your free drinks. )
Casino Offers:
While Instant and Tier rewards are well defined, casino offers are not — however, they can be quite lucrative. For example, I started this post with the story of a family friend who has booked five free cruises this year purely from these casino offers (from their $200 loss on board one sailing). These are sent by the marketing department of the cruise line, so I’m sure they are using demographic information, location, expected casino spend, and many other factors to decide which offers to send to you. RC cruisers report getting these offers with as few as 800 or so points.
To add even a little more spice, Carnival has a “Fun Match” program that will match your Royal Caribbean casino status!
Virgin Voyages may even offer you a free cruise if you upload a free cruise offer from a competitor! (They did for us, and it was awesome!)
Section 2: Earning Casino Points
Both land-based and sea-based casinos often have loyalty programs where you earn casino points based on how much you play. On Royal Caribbean, points are ambiguous at live table games, somewhat driven by time at the table and amount wagered, but also highly discretionary from the RC employees. However, the points system is very well defined for slot-based games: On regular slots, it takes $5 of “coin-in” to earn a point, and $10 of “coin-in” to earn a point on video poker games. Coin-in is the term for money cycled through the machine, which is not the same as your expected loss.
For typical slot machines, it is very difficult to estimate total expected return — however there seems to be general consensus that Royal Caribbean pays out somewhere in the 80-85% range. So for every $100 you put in, you would expect $80-$85 back. Not only is that really low, the ambiguity in the odds makes a big difference in our math.
Video poker, on the other hand, has very defined odds . Legally, video poker is only allowed to use one “deck” of cards for the game — and the payouts are very plainly displayed for each game. Thanks to a quick calculator, we can figure the exact expected payout for a game.
- Try the Video poker odds calculator at WizardofOdds.com.
- An example of “Jacks or Better” $1-$5. By typing in the payouts (250, 50, 25, etc) into the Wizard of Odds calculator, we see an expected “Return to Player” of 96.14%. At the $5-$25 level, some ships even have machines offering Return to Player of 97.29%!
Assuming video poker with a 96% RTP (Return to Player), earning 1200 points should cost about $480 (1200 points * $10 per point * 4% expected loss). That number can be deceptive though — because it makes two big assumptions. The first assumption is that you make the correct (optimal) playing choices during the games. This can sometimes be tricky, and will require some time to study and practice before going to the casino. The other big assumption (and this has a huge impact on your actual experience) is that this is the “average return.” But that average is a very broad bell curve — with high highs and low lows. This is because the variance of results on video poker is quite high — meaning two people doing exactly the same actions could walk away with very different results.
Additionally, the points themselves have some value — $2 per 100 points. So 1200 points would earn $24 in additional play — bringing the expected net cost down to $480-$24 = $456.
If you were to go for 2500 points in a single cruise (assuming 96% RTP), your “expected” cost would be $875. $25k of coin in * 4% expected loss = $1000. But then we also deduct the $25 cash value of the points, you’d also receive $150 in free play at the 2000 point level (see instant offers sheet above). However, the statement “Your Milage May Vary” can’t be emphasized enough! Because these are games of chance, your individual outcome may vary widely from the “expected return.” For safety, I would suggest doubling the expected cost, just to ensure you go in with the right expectations. If you do better, then that’s icing on the cake.
Expected Variance: This Can Get Very Expensive
As I mentioned earlier, we have to be very careful when thinking in terms of expected payout — because averages can be very deceiving. As Nassim Taleb wrote “Never cross a river that is on average four feet deep.” (Because there may be areas that are 1 foot deep, and some that are 20!) Similarly, the expected payout of 96% can be very deceiving.
Consider a thought experiment with a raffle. Let’s assume 100 people each spend $1 on a raffle ticket with a prize of $96. 99 people will have a 100% loss, and one person will have a 95x gain! However, on average, each person got back 96 cents on the dollar! That is extreme variance!
As such, we have to do some math to figure out how much variance there would be in a reasonable amount of playing time (number of hands). Just like winning the raffle, the Royal Flush and Straight Flush are uncommon, but have high payouts. The probability of a Royal flush hand is .00248% — or about 1 in 40,000 hands. However, when that does hit, it pays out at 250x! The same goes for a straight flush (1 in 9100 hands) which pays out at 50x.
Those 2 hands alone can drastically alter the outcome of a playing session. If neither of those hands is achieved, the payout will almost certainly be lower than the expected return. If one of those hands is achieved, the payout will likely be higher than the expected return. In other words, if either of those hands come up, that player is essentially the raffle winner, while other players are on the other side of the average.
In statistics, we think of this range of returns as the variance — or often as the standard deviation, which is the square root of the variance. You may remember from statistics class that if you have a “normal” distribution (which we have here), the actual results of any one trial will fall within one standard deviation from the mean 68% of the time and within two standard deviations 95% of the time.
Image Source: Wikipedia entry on Standard Deviation.
There is almost certainly a way to calculate this expected range given known payouts of video poker, but honestly it is above my head — so I decided it would be a fun exercise for a spreadsheet.
For the full in-depth discussion of this, including the spreadsheet with VBA script simulations, please see the video attached at the bottom of this post — but I’ll write about the thought process and outcomes here.
First, we must assign possible hands with probabilities and payouts. I found multiple sources online that stated the probabilities of hands given a “5-card draw” situation and a single deck — so I trust those are correct. Next we assign payouts for each of those possibilities — which is always stated in plain sight on the video poker machine.
For the spreadsheet simulator, it then chooses random numbers, each of which has the same probabilities as the poker hands. With a random number range of 0 to 10,000,000, getting a number 0-248 is the “Royal Flush.” Getting 249-1341 is a Straight Flush, and so on. Any number above 4,545,654 is no payout.
Once we generate our random numbers we can “play” a certain number of hands to work toward our target points. For example, to earn 1200 points at $5 per hand, we know we need to play 2400 hands. The spreadsheet then tells us how much that 2400 hands cost us (or in some cases won us).
As a side note, this is also a good time to talk about time investment. The more hands you play, the closer to average you will likely get, however, it will take more time. For me, I think a few hours each night is reasonable — or about 10 hours over the course of a cruise (assuming 240 hands per hour). Pro Tip: A great way to reduce the time involved, while also increasing the number of hands (thus pushing your likely outcomes closer to the mean) is to play multi-hand poker. According to WizardofOdds, this does not change the probabilities, but it does allow you to play many hands at the same time.
As I look at this generator now, the first 2400 hand session cost me $370. That’s not bad. However, as I continue to simulate 2400-hand sessions, I see that sometimes it can cost over $1000, and sometimes I actually end up making a few dollars profit!
Because of this wild swing in potential outcomes, I wanted to get a feel for just how much variance I could expect. To do this, I wrote a small VB script inside excel to run this simulation 1000 times documenting the results each time. This will allow us to find the standard deviation of this distribution of potential outcomes.
For 1200 points at $5/hand, and a 96% Return to Player, we would expect a cost of $480. In my 1000 set sample, I came very close to that average (with a mean of $494), however, I found a standard deviation of $552! That means for any one player trying to earn 1200 points, we can break down the odds like this:
In statistics we know that there is a 68% likelihood of falling in a range within 1 standard deviation of the mean (a loss of $480 + or – $552) and a 95% chance of finishing within 2 standard deviations (a loss of $480 + or -$1104) . That is shocking to me that we see such a wide variance in results — even when playing 2400 hands at a time!
By definition, half of the results will be worse than the mean (a larger than $480 loss) and half will be better, but what about other outcomes? Using the “Z-value” is an easy way to find out. The Z value is simply the percentage chance that an outcome will be to the left (on a bell curve) of a certain spot. So for example, we can easily find (via our spreadsheet) that an outcome of $0 loss (i.e. breakeven) is 18.5% likelihood. We have a 23.7% chance of losing less than $100 (which also includes the scenarios where you profit), a 50.4% chance of losing $500 or less, and an 80% chance of losing $960 or less. In other words, there is only a 20% chance of it costing more than $960 — and likely it would be less than that (more toward the $500 mark).
If we do the same math for the Prime tier (2500 points, assuming $10 hands, 2500 hands), the simulator says there is an 80% chance of losing less than $1990. (Plus you’d get the $50 and $150 free plays, for a net potential loss of no more than $1790.)
So the question comes down to this. Is it worth a potential loss of $960 (or $1790 if you are going for 2500 points) to get the casino rewards?
The answer is maybe. It depends on your risk tolerance, the value you place on the likely casino offers, and the potential value of “free” cruise(s).
So far we’ve gotten a “free” cruise from Celebrity which cost us about $350 in casino losses + tax and fees. That was matched by Virgin for a “free” cruise as well. Now it’s time to go get the fly-wheel started on Royal Caribbean.
Similar to credit cards rewards, if you are careful and play the game smartly, you can definitely come out ahead. However, the entire business model works based on the fact that most people will not come into the casino knowing all of the things in this blog post. If you go in armed with this knowledge, you just might beat them at their own game.