Why You Should Almost Never Cash Out in Sports Betting
One of your favorite actions for bookmakers is to use Cash-Out because every time you do it you pay them a hefty commission for it.
1. What does Cash Out mean
Closing a bet or the Cash-Out option is a feature that is considered a safe activity when there is a risk of losing everything and most often enjoying a partial win. This option ensures that the bettor can receive a payout at any time during the game, as he uses it when his team is leading.
Let’s say we have a football match between Levski and CSKA-Sofia. If you bet 100€ on Levski with odds of 3.20, your potential profit will be 320€.
If Levski leads at halftime but does not play impressively, you have the opportunity to withdraw your money and immediately receive part of the full payment. This will cancel the rest of the bet and you will receive only 160€ instead of 320€.
This is due to the elimination of the risk, because Levski may not be able to maintain their lead until the very end of the match.
2. What is the formula behind Cash Out
The formula behind Cash-Out is made up of real-time odds and the full potential winnings of your current bet.
In the above example, the Cash-Out option at half-time was 160€ instead of 320€, which is obviously lower than the full amount, but if we take a closer look, it is also lower than the correct or “fair” amount.
The fair amount of the Cash-Out option is based on the following formula:
Full potential winnings of the bet / Odds in real-time.
If we use the formula from the above example, we have 320€/ 1.60 = 200€.
This means that using Cash-out at half-time you will lose 40€ compared to the real and fair value of the bet at that moment (commission at the bookmaker).
This is more than likely to happen in any given game, as bookmakers strive to take every opportunity to win money from bets or in this case to make sure that they do not lose extra money from the bet.
In these accounts, we do not add the margin of the bookmaker, which makes their profit from such actions even greater. Frequent use of this option seriously damages your profitability in the long run.
But are there situations in which Cash-Out is an attractive option? The short answer is yes.
3. When to use the Cash-Out option
a. When the offered Cash-Out option exceeds the market price
In some rare cases, the Cash-Out option will have a higher value than the odds of other bookmakers. This is an indication that its value is above the actual fair price and is definitely a favorable option for the bettor.
For example, if the odds of Levski winning over CSKA in your bookmaker at half time are 1.60, while in Pinnacle are over 2.10, it means that you will have the value of the Cash-Out option because the real price is much higher and your bookmaker just delayed adjusting the odds.
b. When the bookmaker slows down with actions
We have also had cases where we play a match from Africa at 4.00 odds, it drops to 1.20, but is subsequently postponed. We understand first why and cash it out. Then we win a huge amount thanks to the Cash-Out option even though the game hasn’t even started.
c. High % of the bank or high odd
If you have made a bet with very high odds and it is almost won, the Cash-Out option can guarantee you the amount won and is worth doing.
I’ll give you an example with a $ 100 bet on Leicester to win the Premier League at odds of 5,000. The season is coming to an end and Leicester leads with 5 points ahead of Tottenham and 8 games until the end. However, their competition is improving and is close to regaining the lead.
In this situation, the sensible thing to do is to withdraw your money and get some payout instead of risking running out of money.
The full payout of the bet would be $ 500,000 if the Cash-Out option is $ 200,000. However, the fair price at a factor of 1.80 in real-time is 500,000 / 1.80 = $ 277,000.
In this case, it may be wise to close the bet, although you may feel that this is a loss of $ 77,000.
One piece of advice I can give you at this point is not to make such long-term bets because they have a huge variance and bookmakers set incredibly high margins, which drastically reduces the value of your bet.
d. Bets that are after a longer period of time
When you place bets that are after 1 week, for example, the news may appear that kills your starting value and sometimes it is a good idea to close the bet even at a small loss so as not to risk the entire amount.
4. Alternatives to the Cash-Out option
Hedging is a better option than Cash-Out. This means covering your bet with an Asian bookmaker or broker, for example by playing the opposite bet of yours with a certain amount so as to minimize losses.
In the last example,, which we gave with a bet that you played after 1 week and news that is not in your favor appears, you can cover the bet in another bookmaker and so you do not lose the Cash-Out option, it is even possible to do small profit, something like arbitration. So this is the recommended option for both.
But more on how to make hedging bets will be discussed in another article.
5. Summary
In summary, I will share that Cash-Out is not an option for bettors who want to win in the long run. In addition, with the bookmakers’ margins, the expected value of your bets will decrease dramatically.
Another known disadvantage of the option is that those who use it often and abuse it will be limited much faster.
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