In today’s article, we will take a closer look at free bets. We will learn their mathematical rationale and psychological features. We will also consider in general terms the theory of prospects.
Many people are familiar with the saying that free cheese is only in a mousetrap. However, when it comes to the bookmaker providing free bets to players, some people forget about this saying and believe that the office simply attracts new participants. So what is the essence of such generosity and what does the bookmaker count on, providing freebets to the participants of the gaming community? We will talk about it today in more detail.
Benjamin Cronin in his article has already talked about the fact that free bets are provided by the bookmakers only for marketing purposes. You can read his work on our resource, but we propose to find out how the bookmaker receives dividends as a result of providing freebets. Also consider choosing the most interesting offers from bookmakers, which can help in gaining profit in the future.
What does a player need a free bets from a bookmaker for?
The first thing to keep in mind when getting a freebet is the absence of any complicated conditions for wagering it. If the office offers a free bet that does not need to be wagered a large number of times to withdraw the winnings to the main account, it is a good sign. Such an offer can be taken advantage of. The graph below shows the expected profit of a participant of the gaming community from such a bet at different quotes (excluding the bookmaker’s margin).
It becomes obvious that the amount of potential profit increases in proportion to the growth of quotes. In such cases, there is an opportunity to bet on a higher odds. In this case you do not risk your money, and in case of success you will get a good addition to your bankroll. Above we have given the figures for «pure» odds, but the office will not allow itself to do that, and in any case its margin will take place. Let’s take a look at how the sums will change taking into account the bookmaker’s profit included in the quotes.
With proportional distribution of margin, the potential profit of the player will increase with the growth of quotes on the event. And here the most optimal strategy is to use the highest odds for freebet bets.
Turnover requirements: what are they and how to understand them?
Any betting company realizes that it is possible to reduce the player’s potential income by imposing certain conditions for wagering a free bet. The main technique for this is considered to be the need for multiple turnover of the freebet. For example, let’s consider the option when the size of the incentive is $100 with a turnover of $90. That is, you will not be able to withdraw money to your main account until you wager the specified amount.
Above we have already determined that the most effective strategy will be to bet on the highest odds. But how will it affect the final profit on the condition of turnover? Here everything is somewhat different, and for greater efficiency you will have to bet on «honest» odds.
The value of your free bet will become even less if the office imposes additional turnover requirements. The main way of such a restriction can be the condition that the odds on the bet cannot be below a certain level.
Impact of variance
Increasing the value of the freebet will certainly increase the dispersion. For our sample, the free bet should be placed at odds of 8.00 to maximize its value. However, in this case the true chance of it going through would only be 11%. That is, 89% of players will win nothing on the freebet, and the profit of the remaining 11% of participants will be $700.
Theory of Perspectives in free sports betting
Back in 1979, authors Kahneman and Tversky outlined the tendency of bookmakers to attract new customers with freebets in accordance with the theory of prospects. In their article, it was proven that people are more inclined to make a smaller profit without risk than to take a risk with the potential of losing everything.
In the case of free bets, the same system works. Players find it easier not to use them if the wagering conditions are too difficult and require many tasks to be completed. It is easier to put their own money on lower quotes and almost guaranteed to make a small profit. However, there is another side to this issue.
Given that most people have a poor understanding of events with a low probability of realization, it seems to them that they occur more often than they actually do. This leads to bias in assessing the odds of favorites and outsiders and losing seemingly stable winnings when betting on low odds.
As a conclusion to today’s material, I would like to note that the main task of providing free bets is to attract new players to the bookmaker’s clients. Winning in this case is very difficult, given all of the above. Professional bettors rarely and only on occasion use such «bounties» from the office. It is better to spend time on finding the optimal bookmaker that will provide fair odds for each event, which will lead to profit.