I can tell you how it works in AC. This is observational but if you get a $5 free play coupon and put it in a 25c video poker machine it will register 20 credits. Basically at full pay (5 quarters) the house will pay for your first four spins. Anything you win will increase the credit counter but will be your money.

For example, if you spin once (down to 15 credits now) and get a pair (enough for a 1:1 payout) you will have a credit meter of 20 coins. Press the cash out button and the TITO comes out for $1.25 and you still have 15 credits left from the original 20. The key to free play is keeping track of how much of free you are using and how much of any won money you have left. I like to cash out pretty frequently and have a bunch of small TITOs then at the end come out with maybe $8-$11 of free money from the $5-$10 free play.