How To Use Free Bets On Internet Betting

Almost all internet gambling sites will offer a free bet when you sign up. It’s usually in the form of a deposit match, up to a set amount. For example, if you deposit $200, the bookmaker will give you an additional $200 in free bets. The upper limit to the deposit match can be as much as $500. You can find a good list of offers here (see right hand frame).

Almost all sites offer extra free bets for referring friends who end up joining. If you haven’t bet with them for a while, you’ll receive an email or text offer of more matching bonus bets if you make another deposit and bet with them again. All pretty lucrative once you know how to use them properly.

Sometimes you are required to bet the initial deposit through before receiving the free or “bonus” bets. Some sites give you the bonus straight away. That does not alter the strategy.

How do you get the most out of your free bet?

Not by just betting on a 50 / 50 outcome and hoping for the best. Nor by betting on a short priced favourite. Even if the bookmaker let you use your free bet on short odds (which they usually don’t), this is a terrible strategy, as you only receive the profit as a payout. That means you’ll convert your free bet into 10, 20 or 30% of its face value (and possibly lose). It’s possible to do much better, with certainty.

I’m going to explain how to arbitrage a free bet. That means you lay off the other side on another site in such a way that the payout is the same, regardless of the result ie. a risk free position. Because one of the two legs uses the free bet, you will be able to lock in a certain, riskless profit. It’s usually in the range 65 – 70% of the free bet amount if you’re prepared to join several sites and look for the most favourable odds.

First, I'll explain how to arbitrage by backing both outcomes on two different bookmakers. Then I'll discuss laying the free bet outcome at Betfair, which in theory is better, but in practice gives about the same result.

The basic principle is to bet your free bet on a high paying result of a two outcome event, such as a tennis, basketball or football match (not soccer – it has too many draws). In general, you want a game in which a draw is either impossible, such as tennis or highly unlikely, such as basketball, AFL, rugby league or American football. In the latter, a draw is still possible, but so unlikely that the cost of covering it is negligible.

Method 1: Backing both sides on two different bookmakers.

First we have to know the mechanics of betting payouts.

A free bet will not pay the stake if it wins. For example, if you bet $100 on a team to win at 4.00, an ordinary bet will pay $400 ie. you’ll win $300. But the bonus / free bet will pay $300, since you never put up the stake. This is important in our calculation.

Secondly, if you choose to bet on binary outcomes in games in which a draw is possible, you need to understand the dead heat rule for payouts: the payout is halved. Suppose you bet $100 on Manly (1.20) v Parramatta (5.00) on a straight win bet. Choose Manly and the win payout is $120. But if you choose Manly and the game is drawn, you would only receive $60 ie. you’d make a $40 loss. If you choose Parramatta and the game is drawn, you would only receive $250 ie. you’d make a $150 profit instead of $400 in the case of a win.

How does that work with a free bet? Remember they don’t pay you the initial stake. If you bet a $100 free bet on Parramatta at 5.00 and the game is drawn, you’ll only receive the profit ie. $150.

So, let’s use the Manly (1.20) v Parramatta (5.00) example to see the entire free bet arbitrage. We’ll suppose we’re using a $100 free bet. I’ll discuss the general formula at the end of the post.

First, bet the $100 free bet on the high paying outcome: Parramatta at 5.00. If they win, the payout will be $400. If they lose, the payout will be 0.

Now you need to bet the right amount on Manly with another site to get a payout of $400 if they win. Remember this is not a free bet, so your payout includes the initial stake. The correct amount is $400 / 1.20 = $333.33.

Now all you need to do is cover the draw. In this event, the free bet will pay out $150 and the hedge bet on Manly will pay $200. That’s $350 in total, so you’ll be $50 short if you don’t cover this option. In the actual game example I’ve used, the draw paid $34, so betting $1.50 on a draw in the margin betting will cover it.

Thus, for a total wager of $333.33 + $1.50 (call it $335), we have a guaranteed $400, whatever the outcome. That’s a riskless profit of $65.

Now I said above that you should be able to get 65 – 70% of the free bet amount. That’s true if you’re prepared to look around for the right high odds on a game where another site is paying slightly more for the favourite. For example, maybe another bookmaker has Manly at 1.21 or 1.22. The latter would give a 70% overall profit.

Betting on tennis matches can be better because you don’t need to cover the draw. However, bookmakers’ spreads on these are usually larger than football or basketball, so if you find a match paying 5.00 on the site with your free bet, it may be harder to find the opponent paying more than 1.20 somewhere else. Then again, some of my highest percentage free bet returns have been on tennis matches.

In general, suppose we find a straight win / loss bet with A wins paying p and B wins paying q, with      p < q. If we bet a $1 free bet on q, we want to know the amount x to lay off on p.

Victory for A pays p*x. Victory for B pays q – 1 for the free bet (no stake return). These have to be equal if the bet is risk free. Thus, p*x = q – 1, so x = (q – 1) / p.

In our Manly v Parramatta example above, p = 1.20, q = 5.00, so x = (5 – 1) / 1.2 = 3.3333.

Exactly the same formula works in the slight variation where the bookmaker offers a refund if your bet loses. This is essentially a free bet. Betfair does this.

Mathematically inclined readers will see that in a fair wager, the probabilities implied by the odds add to 1. That is, 1 / p + 1 / q = 1, so that the percentage riskless return = (q – 1) / q, which increases toward 100% as q gets larger. Thus, in a fair wager, you should bet your free bet on the highest payout possible.

However, in a real bet, 1 / p + 1 / q = some K > 1. That’s how the bookmaker makes a profit. The percentage riskless return = (q – 1) (1 – (K – 1) q) / q, which has a maximum value at q = 1 / √ (K – 1) and a maximum return of K – 2 √ (K – 1). 

In most win / loss wagers, you should be able to find games with K < 1.05. You can even sometimes get as low as K = 1.02. If K = 1.04, we get q = 5.00 and a maximum return of 64% of the free bet. In the Manly v Parramatta example above, K = 1.033, with a maximum possible return of 66.8% of the free bet. Note that other bookmakers paying 1.21 or 1.22 on Manly would reduce the K for our wager to about 1.02. Each bookmaker's individual K would be about 1.04 or 1.05, because someone paying 1.22 on Manly would only be paying about 4.60 on Parramatta. It's the ability to shop around for better odds on the favourite for the other side of the hedge which reduces our K. That’s why we could get a payout of 70%.

If you’re lucky enough to find a game with a 10.00 payout on one team and a = 1.01 due to odds mismatching between bookmakers, you can get a return as high as 81% of your free bet. In practice, such wagers are very hard to find, due to the way bookmakers adjust the payouts of lop-sided contests. You also need a lot of money for the hedge bet on the favourite.

Method 2: Laying the other side.

Now I'll discuss the alternative option: laying the free bet outcome at Betfair (the only site which offers this).

A lay bet is where you bet on an outcome not to happen. In our case, that would be for the side we have backed with our free bet not to win. Note that this means more than losing: a draw pays out on our lay as well, so the draw option is automatically covered.

Suppose in our example, we had used our free bet of $100 on Parramatta at 5.00. We could try and lay Parramatta on Betfair. In practice, the odds would be more like 5.50. This is because Betfair is an exchange, which makes its money matching up bids and lays and taking a commission on winnings. The value of K = 1 / p + 1 / q for games on Betfair is usually more like 1.01 than the 1.05 on other sites. The catch is that Betfair take about 5% of any profit you make, so we need to factor this into our calculation.

So, suppose you make a lay bet of $100 on Parramatta at 5.50. There is no initial outlay, but you must have the funds in your account to cover any payout you might have to make if Parramatta win. If Manly wins or the game is a draw, you get the $100. If Parramatta wins, you pay out like a bookie: $100 * (5.50 - 1) = $450.

Suppose we bet $1 of free bet on team B to win with odds q. How much should we lay on this outcome, where the odds will be Q > q?

If we lay an amount x, a win on the free bet will pay q - 1 - (Q - 1) x. A loss for team B would pay 0 for the free bet and you would keep the lay amount x, less the commission percentage, which I'll call C.

We want the win and loss amounts to be equal, so that q - 1 - (Q - 1) x = (1 - C) x, giving x = (q - 1) / (Q - C). The proportion of your free bet which can be earned risk free by using the lay bet method is then (q - 1) (1 - C) / (Q - C).

In our example, where q = 5.00, Q = 5.50 and C = 0.05, x = 0.734, so you would need to lay $73.40 for each $100 of free bet. The percentage riskless return would be 69.7%.

That looks pretty good: it's at the upper end of what's usually possible by Method 1. Note that although no initial outlay was required, you still need to deposit sufficient funds in your account to cover a payout on the lay bet, so the practical impost is about the same.

I also haven't covered the case of a drawn game. That's because it's actually in your favour if you use a lay bet. The free bet will pay out half minus the stake ($150 in the case of $100 on Parramatta at 5.00). But you'll also win with the lay bet, since you're betting on the outsider not to win. Thus, the lay bet method gives a small chance of a substantial profit from the draw. It also lets you bet on sports like soccer, since the draw is now not a problem, but a benefit. In particular, the English Premier League becomes a good option due to its liquidity, as Betfair is housed in the UK.

The formulae above imply that if using the lay bet method, we should look for games with as high a value of q as possible and this is sort of true. Generally, the longer the odds for one team, the tighter the difference in the payouts between ordinary bookmakers and Betfair's exchange. That means the difference in odds for the outsider will increase, so that the ratio of q / Q will decrease. There is a practical limit to the return of about 80%, which is about the same as in Method 1. You'll also need significantly more money in your account to cover the possible payout on the lay.

The other difference between theory and practice is that lay bets of any reasonable size on outsiders  (say, those paying 10.00 or more) are generally not available because there aren't enough takers on the other side. Laying off $75 on a $100 free bet should be feasible though. Laying off a free bet of $250 or $500 where the bookmaker requires you to use it all in one go is much less likely. So, in reality, you're probably not going to do much better that 70% using the lay method. Having said that, when available, it's usually slightly superior to Method 1.

I am reminded of a quote by that great philosopher, baseballer and commentator Yogi Berra:

      "In theory, theory and practice are the same. In practice, they are not."

What does it all mean?

In summary, the above discussion implies that in practice, you’re typically looking for games with one team paying around 4.00 to 6.00. That means for each $100 free bet you use, you’ll need as much as $500 to bet on the favourite on another site, or alternatively, to cover the lay payout on Betfair.

Method 1 is more likely to give you an actual match up of bets. If you use it, find the lowest value of K = 1 / p + 1 / q  that you can, use the formula x = (q – 1) / p for the amount of your hedge bet on the favourite and you should be able to secure a return of 65 – 70% of your free bet - don't forget to cover a draw.

Method 2, the lay bet, usually gives a slightly better return, if you can get the lay on. Try to find a game where one side is paying about 7.00 to 8.00 and there is sufficient depth in the market. This may not always be possible. If not, look for games where one side is paying around 5.00 to 6.00. Use the formula x = (q – 1) / (Q - C) for the amount of your lay bet and you should be able to secure a return of at least 70% of your free bet.The additional advantage of using a lay bet is the small chance of making a large return from a drawn game, instead of the small, additional hedging cost in Method 1.

A Salient Example Of The Problems With English Cricket

I recently came across an article in which Ashley Giles bemoaned that English batsmen get very little exposure to unorthodox spin until they hit test cricket.

He suggested supporting English spinners who bowl unorthodox deliveries like the doosra, instead of quietly managing them out of county cricket. That’s a fair point: other countries’ spinners will not stop the practice just because the English Cricket Board thinks it’s dodgy. Foreigners do a lot of dodgy things. Always have and always will. But in the case of cricket, the option to exclude them from a “gentleman’s club” of people who bowl with a straight arm is long past.

The article made reference to an event which is symptomatic of a much deeper malaise in English cricket, one entirely of its own creation. It was that Hampshire were docked points in a County Championship match for preparing a wicket with excessive spin.

When I saw this statement, I imagined teams shot out for under 100 by journeymen off spinners. But no, have a look at the scorecards. All four innings reached around 200. South African test spinner Imran Tahir could only manage match figures of 4/110. An average county level off-spinner who took 6 in the first innings couldn’t take a single wicket in the second.

Hardly a sub-continental style minefield of the sort India prepared for Australia in 2004 in Mumbai or in 2013 in Chennai.

If the ECB seriously believes a pitch on which teams can score 200 spins “excessively”, it’s no wonder their batsmen struggle against anything other than gentle off spin. They clearly are not living in the real world. While people like this remain in charge of English cricket, their test team’s brief period of dominance over Australia will be just an aberration.

Also, have a look at Nottinghamshire’s 4th innings run chase on this apparently excessive turner. They fart arsed around to get to 4/149 in 66 overs, needing another 53 off the last 6. They then fell 4 runs short, still with 4 wickets in hand.

That tells me pretty much all I need to know about why England can’t beat Australia.

The West Needs To Stay Out Of Crimea

There are two main reasons Western governments should not involve themselves in the Crimean dispute. The first is practical: there is nothing they can or will do to prevent Crimea rejoining Russia. The second is moral: Crimea really is Russian territory and the overwhelming majority of the population want to rejoin Russia.

Although the political situation in Ukraine is complex, no complex or lengthy argument is required to understand Western countries’ only sensible course of action: unless Russian troops begin pouring into any region other than Crimea, stay out of it.

Crimea is only part of Ukraine by a recent historical accident. Prior to the collapse of the Soviet Union in 1991, Ukraine had not been independent for nearly 700 years. In 1654, the uprising which saw the region break away from Polish rule effectively made Ukraine a territory of Russia through the Treaty of Pereyaslav. In 1954, to celebrate the treaty’s 300th anniversary, Nikita Khrushchev transferred Crimea to the Ukrainian Soviet Socialist Republic, presumably believing that it would only ever be a symbolic gesture as both territories would continue to be controlled by the USSR. This move was said to have surprised many in Russia at the time and it certainly did not have unequivocal support.

So, from the time Russia reconquered the Crimean Khanate until Crimea was given to Ukraine by Khrushchev as a political act of a discredited, defunct system of government, it has been Russian territory. It is therefore absurd for Western countries, particularly the United States, to suggest that Crimea should remain part of Ukraine, despite the wishes of the majority of its population.

Crimea will almost certainly rejoin Russia, soon. There is nothing practical that the United States, Europe or anyone else can do about it. Even the new Ukrainian government openly admits there is nothing it can do.

Crimea is overwhelmingly ethnically Russian. The electorate and state parliament are dominated by Russian speakers who want to rejoin Russia. The Crimean parliament has an openly stated goal of unification and a referendum on the matter is due to be held on March 16. The boycott of the referendum by many ethnic Ukrainians and other minoroties such as Crimean Tartars will make no material difference to the result.

Nor will the fact that remaining part of Ukraine is not one of the referendum options (the only two are independence or joining Russia). Having this third choice would have been more sensible political strategy and lent more legitimacy to the referendum. So would have allowing a longer period for debate and free campaigning for all options. From a Liberal perspective, this demonstrates the lack of acumen of Crimea's pro-Russian politicians, since the "join Russia" option would have almost certainly won regardless. An alternative reading is that it demonstrates that Russia doesn't feel it needs to care about Western political values. Russian Crimeans are essentially stating that the result is a foregone conclusion and anyone wanting to waste time and money on Western political niceties can go fuck themselves.

The political situation has come to a head now due to the overthrow of the corrupt and repressive, but pro-Russian government of Viktor Yanukovich. Its replacement is largely ethnic Ukrainian and many of its members bear some hostile sentiment toward Russia. Despite the exaggerations and propaganda of the Russian media, the new Ukrainian political power blocs do contain some far right, nationalist elements. It's not wholly surprising that a Russian region which never consented to becoming part of an independent Ukraine now decides it's time to rejoin Russia.

If an overwhelming majority of the population of Crimea vote to rejoin Russia, as they almost certainly will, what can the West do? Warn Russia not to “annex Crimea”? It’s hardly an annexation if the majority of the population votes in favour of it. This is not a case of Russia using its military to impose a pro-Russian government on the unwilling populace of a neighbour, as they did in Eastern Europe after the Second World War.

Just as important is the question of why the West would support Crimea remaining part of Ukraine. Apart from opposing a genuine, democratic choice, the position is poor political strategy. It is the western part of Ukraine which is ethnically Ukrainian and pro-Europe. Crimea and the south eastern part around Donetsk are majority ethnically Russian and hence pro-Moscow. This has been a source of division in Ukrainian politics long before Ukraine gained independence in 1991.

Wouldn’t it be a better political strategy to not oppose Crimea reuniting with Russia, thereby removing a significant proportion of the pro-Russian population? The condition would be a Russian guarantee that it would not seek to further redraw the border. Instead of picking a fight with Russia which they can't win, the United States and Europe could then concentrate on bringing Ukraine (minus Crimea) into the European fold, which would be easier with an increased proportion of ethnic Ukrainians and almost certainly involve less violence.

Update: British Foreign Secretary, William Hague, a man every bit as insipid as he looks, has labellled the Crimean referendum "a mockery of proper democratic practice". Apparently the UK "does not recognise the referendum or its outcome" and Russia will now "face economic and political consequences" ... from a heavily indebted country which has lost most of its manufacturing base and struggles to assert its political and cultural values domestically, let alone globally.

The Crimean referendum was certainly not best diplomatic practice, but let's concentrate on matters where a) there is a genuinely unjust outcome and b) we can actually do something practical to reverse, or at least ameliorate it.

McDonalds Sued For $1.5M Over A Trivial Slight

The Webster Lucas Case: Lawyers Who Abet The Pursuit Of Speculative Litigation Must Be Punished

Americans tend to indulge in some absurdly speculative litigation, but this farcical case should be an embarrassment to the country’s entire legal system.

California man Webster Lucas is suing McDonalds for $1.5M, presumably for intentional infliction of emotional distress. Over what? He was only given one serviette with his burger and the store manager refused to give him any more.

"I should have went to eat at the Jack-in-the-Box because I didn't come here to argue over napkins I came here to eat", was the reported reply.

Being black, Mr Lucas has of course played the race card, despite the manager being a Mexican. Allegedly, the manager “was racist towards him and mumbled something that sounded like ‘you people’ ”.

Well yes, if a Mexican mumbled something to a black man that sounded like “you people”, that ought to be enough to prove aggravating circumstances of racism.

The lottery sized amount of $1.5M is due to Webster Lucas being allegedly unable to work as a result of emotional distress. Because, despite his obviously poor education, he earns a seven figure salary.

Webster Lucas has been “unable to work” because he is a lazy-ass motherfucker who believes he has found an excuse not to go to work. In a sensible industrial relations system, his employer should be able to sack him on the grounds of falsely claiming sick leave. No reasonable person becomes so stressed that they cannot work because they were refused an extra serviette. Even had the manager been white and called Mr Lucas a nigger, that could not possibly cause a grown man sufficient emotional distress to stay home from work. Just unwrap your burger, throw it in the manager’s face and go down the road to Jack-in-the-Box.

Some supernatural intervention has substantially raised Mr Lucas’ vocabulary in a just a few days. He has gone from expressing himself thus: “I should have went to eat at the Jack-in-the-Box” to sending an email to the McDonald’s manager saying he is “unable to work because of the intentional infliction of emotional distress”. Or could that have been his no win, no fee lawyers constructing the text of the email for him?

I don’t know who his lawyers are yet, but one might reasonably surmise that Mr Lucas is not funding this case himself, which brings me to my main point.

Americans are far more liberal in their interpretation of tort law than most, to the point where it is often clearly manipulated by lawyers who take on speculative cases on a no win, no fee basis, then seek to blackmail defendants into settling in order to avoid the much greater potential impost of a court case, particularly since a claim for recovery of costs against the plaintiff will be practically unenforceable, even if granted by the court.

Matters in which a plaintiff with little resources has a strong case make the no win, no fee model a valid element of the justice system. However, it only has a net benefit if balanced with the return of the tort of champerty and the ability to vigorously pursue it in relation to the conduct of lawyers.

In my opinion, the pursuit of the Lucas matter is a clear case of champerty and McDonalds should have a claim for all costs, plus reputational and punitive damages against Webster Lucas’ lawyers for this frivolous, clearly speculative action.

I said "should". I doubt if it actually will. That tells me the law is wrong.

I don't believe that third party funding of litigation is per se wrong in a free society, as long as the attendant moral hazard is rigorously contained.

Any third party funder of litigation, including lawyers prosecuting the matter substantially via their own funds, should be required to deposit a bond covering the defendant's expected costs. Moreover, in any case where the judgement is in favour of the defendant, costs should be jointly and severally awarded against the plaintiff and any funders. If the complaint was found to be vexatious or speculative, punitive damages should also be awarded. This would at least place the onus on any litigation funders to be confident in the righteousness of their case.