With the opening up of the bookmaking industry, foreign operators and local start-ups have flooded in for a piece of the action. The 'Euro Model' has had its downsides in terms of limiting and banning many punters, but it has also resulted in what is now a ubiquitous part of the punting landscape: the bonus bet.
You get them for signing up. For signing in. For having a bet. For not having a bet. For contacting their customer service. When your horse runs second, or your team loses by a kick. When your multi bombs out. And so on.
It’s pretty simple business for the bookies: it makes you more likely to stake with them than one of the other dozen options. Even if they have to grant you the bonus, you’ll be back to use it anyway, where they can flog more offers to you.
And even if your bonus bet actually wins, there’ll inevitably be turnover requirements on the winnings that stop you from taking the cash and running: you might have to stake the winnings two or three more times before you can withdraw them. And yes, they’re ahead of you regarding your plan to do so by betting $1.04 shots. There’ll be a minimum price for these turnover bets, often $1.50+.
All-in-all, whilst a bonus bet offer may look like free money, the odds of your average mug actually ending up with any real cash in his pocket as a result are pretty slim.
But thanks to arbitrage betting – or “arbing” – you don’t have to be an average mug.
Standard arbing involves betting both sides of a two-way outcome, at the right odds to ensure yourself a profit either way. Some people make money doing this solely rather than regular betting (although bookies despise this practice and are always on the lookout for arbers), but where it comes in handy for us traditional punters is ensuring we can quickly turn those bonus bets into real cash.
The beauty of the bonus bet, of course, is that you’re not actually risking any of your own capital. But rather than just hoping the bet comes in, you can instead use that edge to cover both sides of a bet and guarantee yourself a positive result.
The key to successfully arbing your bonus bet is laying the outcome on Betfair, or a similar exchange. Laying, of course, is betting on something not to happen. For example, if I was to lay Hartnell in the Melbourne Cup, I’m betting on it not winning - I would only lose my stake if Hartnell did win.
Let’s look at an example: say you have a $100 bonus bet that you’re using on a Premier League match. You back Stoke to win at $6.
If Stoke wins, you’ll collect $500 (the $100 bonus stake is generally never included in your collect on a bonus bet). And if Stoke don’t win, obviously you get nothing.
This is where the arb comes in: you can use that $500 possible collect to effectively ensure a profit on the other side of the outcome; that is, Stoke not winning. You do this by laying Stoke on Betfair.
Ideally, Stoke’s lay price would also be $6, so there’s no “middle ground” between the two prices that you have to cover. Were that the case, you simply divide the potential win collect by the odds ($500 / 6), and lay that amount ($83.33 stake for a $416.17 liability). Your outcomes will be:
Stoke win: $500 collect from bookie, $416.67 loss on Betfair. Net result = profit of $83.83.
Stoke don’t win: $83.83 win on Betfair.
You receive $83.33 either way. It’s not the full $100 “bonus”, but it’s guaranteed, free money.
It’s all backed by maths of course, but that’s the basics. Now for the details:
- It’s extremely rare you’ll be able to find a price with a bookmaker, and a lay price on Betfair on the same outcome, that are equal. The key is to get them as close as possible, minimising the variance between the two that eats into your margin.
- If you sit down and do the maths, you’ll find that backing and laying a short price will produce a very different net result to a longer price. Experiment: you’ll generally find the sweet spot for the best possible result is around $6 - $10.
- Points (1) and (2) eat into your margin. In our example, the margin was 83.33% ($83.33 cash realised on a $100 bonus bet). How high your margin is really depends how dedicated you are to searching out the best possible odds for this purpose. Some people insist on at least 75% for all bonus bets; others are happy to settle for 60%. Like most things punting, the more time and work you put in, the better you’ll do.
- Don’t forget commission! Betfair and all other exchanges charge it, it’s how they make money. Commission eats into your effective odds on the exchange, so you have to factor it in.
- You can effectively 'lay' across other bookies if you dont want to use Betfair. For example in a H2H match you just take the other side with another bookie. Or in Win-Draw-Win soccer for example, your can use your bonus bet on one option and cover the other two elsewhere.
And finally… don’t worry, you don’t have to sit around with your calculator doing trial-and-error for every possible bet! There’s plenty of free calculators on the internet that will work it all out for you with a few simple inputs. This pommy one is pretty easy to use, and there’s plenty of other good ones around.