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The maths and psychology behind free bets

The maths and psychology behind free bets

The maths and psychology behind free bets
Simeon Simeonov

Added on 2019-04-20 05:27:20 from Simeon Simeonov

People often say that there is nothing free in life. However, many bookmakers offer their players "free" bets. Whether these bets are really free is debatable, but most players would probably like to know how to get the most out of this offer. Read this short article if you want to get the most out of free bets.

It is very clear to most players that free bets and other promotional offers are just marketing strategies used by bookmakers to acquire new customers and in reality they have almost no value.

Although basic offers often look attractive, simple math and terms show just the opposite. Understanding the exact value of such promotions is a good starting point, especially when considering whether to take advantage of them.

What to do if you win a free bet

First, make sure that there are no requirements for the free bet. The winnings from the free bet must be able to be withdrawn without additional conditions.

Тhe return is higher if you place your bet on higher odds. For example, if you have a free bet of 100 Euro at odds of 2.00, you are expected to lose 50% of the time and win 100 Euro in the remaining 50% of the time - the expected return is 50 Euro or 50% of the bet, respectively. If you bet the same free bet at odds of 5.00. 80% of the time you expect a loss and 20% of the time a profit of  400 Euro - so the expected return is 80 Euro or 80% of the bet.

We don’t know exactly what is the margin on every event (Payout). Let’s consider what the player’s return looks like with different margins. 

If the margin is devided proportionally, the expected return is higher when the odds are high. The best possible strategy is to bet at the highest odds (at least from an expected return perspective)

Turnover requirements

The most common way for bookmakers to reduce the expected return on free bets is to add a requirement for placing the bets like min odds - 1.50 or at least three selections in a combo bet. Let's take a look at a free 200 Euro bet, for which there is a condition - the winnings must be wagered at least once before you are able to take your profit. In other words if you win 90 Euro from the free bet, you have to bet the same 90 Euro before you can withdraw the remaining amount.

From the above examples, we know that the best strategy for maximum return on free bets is usually to play at high odds. But what happens in the subsequent turnover of the eventual profit? If we again concentrate on maximizing the expected return, then betting on markets with the highest PO is the optimal option.

Bookmakers often have additional requirements, such as: odds should be above 1.50, or that the winnings should be wagered at least two or three times. The more conditions -> low value!

Maximizing the expected return on free bets will undoubtedly mean bigger deviations. For example, maximizing the value of a bet of 100 Euro in the example above means that with the deviations you have to bet at odds of at least 8.00. The true probability of winning at such a ratio is 11%.

This automatically means that in 89% of cases, free bets will not bring any return and that a 700 Euro profit will be generated in 11% of the time. While it may be tempting to concentrate on the idea of generating more winnings from free bets (for example, by betting on low odds), it is best to focus on the expected return.

Free Bets - Perspect theory

The regularity of players choosing low odds on free bets more often can be considered proven by Tversky’s and Kahneman in their 1979 report on Theory of Perspectives. The two scientists prove that people are reluctant to take risks when any benefits or gains depend on their choice. For example, most people will take a profit of 4,000 Euro instead of an 85% chance of winning 5,000 Euro.

Given that the free bet only gives the potential to win, it seems perfectly reasonable for players to play safer and bet at low odds. If you recognize yourself in this case, you may need to think about the fact that you do not really lose money if you lose the free bet - then why not risk higher odds and higher returns.

Kahneman and Tversky also found that because people misjudge events with an extremely low chance of happening, the same events can hardly happen more often than they actually do. Those stats give a good explanation why most people bet on low odds. In fact, it is such factors that make gambling so attractive to many players.

What we have learned about free bets till now?

Free bets are a tool that bookmakers use to attract new customers and get players to bet, usually that happens on odds with the highest possible margin. However, implementing the best strategy for winning those types of bets will become the reason your account will be limited or even banned - this is how bookmakers actually deal with "educated" players. Therefore, whether you play with free bets or look for real bets at the best odds (highest margins) - the decision is entirely yours.