Several Bookmakers throughout Australia are now offering Cash Out for punters. Cash Out offers punters a payout on their bet before the event ends.
What can initially seem like an attractive offer, for a customer, is in fact a way for a bookmaker to buy back a bet with an even greater margin. Cash Out is not a product designed to help customers win more.
The original and the smartest way to cash out is on Betfair’s Exchange.
Bookmakers’ Cash Out Revealed
The Bookmakers’ Cash Out product is effectively teaching their customer how to trade on their position. When a customer has placed a multi or single bet and has progressed positively in their position they can then Cash Out/Trade/Lay off to lock in a profit.
The big difference between the Bookmakers’ and Betfair’s Cash Out products is that the Bookies are offering low Cash Out payouts. Let us explain further with a well-publicised example from the 2015 Melbourne Cup.
— Andrew Bensley (@AndrewBensley) November 3, 2015
Unfortunately the punter famously cashed out when they had Prince of Penzance in the last leg of their multi. If they didn’t cash out they would have collected $138,510.
The fact that this client mitigated their risk is not the problem we see here, it’s the fact they were offered $441.20 when the true value of the ticket was $1710
|Stake||Multi Leg||Event||Odds||Combined Odds||Current Value|
|$5.00||1||Flem R3||$ 9.50||$9.50||$47.50|
|2||Flem R4||$ 6.00||$57.00||$285.00|
|3||Flem R6||$ 6.00||$342.00||$1,710.00|
|4||Melb Cup||$ 81.00||$27,702.00||$138,510.00|
What is the true value of the ticket before the final leg?
As the first three legs have been successful, the true value of this ticket is the combined odds up until that point (342.00) X the original stake ($5.00).
True value = $1710
Cash Out offer = $441.20
True value odds = 342.00 ($1710 return / $5 stake)
Cash Out odds = 88.24 ($441.20 return / $5 stake)
In this case, the Cash Out offering is just over 25% of the true value of the ticket. The margin applied in this Cash Out was approximately 75%.
Why are the Bookies offering this?
Firstly, Bookmakers want to get out of an accumulated liability and secondly, they want to do this by having punters accept even bigger unders.
As you can see above and with other publicised examples, the TAB and other fixed odds bookmakers are happy to build large margins into the odds they are offering. The above example is an extreme example of the margin bookmakers can build into their Cash Out products.
What’s the best way to Cash Out?
If you’re a Bookmaker punter and are offered a Cash Out on a multi or single bet you have three options.
- Cash Out with the high margin Bookmaker Cash Out
- Don’t Cash Out and let your bet ride
- Cash Out / Lay off on the low margin Betfair Exchange
Option three is what sets Betfair punters apart from others. Betfair customers can Back and Lay across a range of events at an efficient price. Not only can you Cash Out / Lay off your bet that was originally placed on the Exchange, you can also Cash Out / Lay off bets that were placed with other wagering providers like Bookmakers.
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