BR - Freebet 101
Level 3 - WAGMI
Welcome Degen Gambler!
This post is yet another follow-up post of our introductory guide on bonus rugging. If you have not acquainted yourself with the concept yet, please head over to BR - Bonus Rugging 101 and read that presentation thoroughly prior to proceeding with this text.
Knowledge and understanding of how to approach the different betting offers out there are fundamental for a successful bonus rugging adventure. In one of our earlier posts we handled the case of qualifying bets and today we will continue the learning process by discussing freebets. The remaining standard offer, the risk-free bet, will be discussed within a couple of weeks. As soon as that treatment has been released we will also make sure to provide a detailed practical guide for our *paid subscribers* to make sure you finally get started collecting the bookies’ free WIFI-money.
Note: If you have not made north of 1 000 USTT in a few weeks after the practical post has been released you are probably better off leaving this side of the web. If you cannot get this scheme done, it will simply be too difficult/demanding for you to get a successful business up and running and there is no point for you to continue wasting your time hoping for it to somehow magically happen.
What is a freebet?
A freebet is an offer commonly presented by bookmakers to both new and existing customers. In its essence a freebet is a ticket credited to your account offering the possibility to wager *without* putting up any money, i.e. providing zero risk losing any dollars. If your bet wins, you keep the net profit. If it loses, your ticket is consumed.
Quick facts:
Freebet offers are very common in the US and basically every bookie uses it to attract new customers.
Existing customers do often receive freebets prior to popular events such as the Super Bowl.
Freebets are on average worth ~ 70 % of the nominal value declared by the betting company assuming an accurate strategy is applied.
Autist note: In theory, assuming fair odds, the expected value of a freebet could be anything between 0 % and 100 % of the stated value since it is a decreasing linear function of the probability of the given outcome. If something is certain (i.e. p =1), the value of the freebet is *zero* since the odds offered will be 1.00. On the contrary, as p → 0 the expected value approaches the nominal value of the freebet offer. For details check the appended document in the “How to hedge?”-section.
*Nominal value is a financial term for the ‘value’ of a security that is set by the company issuing it; unrelated to market value. Similarly the nominal value of a freebet is the ‘value’ assigned to it by the betting company; again unrelated to its real world dollar worth.
How do you hedge a freebet?
Suppose you are now in the following position. You have recently signed up with a bookmaker and the welcome offer provided by the bookie is a freebet with a nominal value of W $. How do you make sure you extract as much value as possible from this proposition while simultaneously being outcome-independent (fully hedged, equivalent profit regardless of outcome)?
Case 1 - Betting exchanges available (Europe, Australia, …)
As usual the easy case, however not as immediate/obvious as for qualifying bets. The question we would like to answer is, given a certain number of freebet dollars wagered on an outcome, how much should we lay on it to convert the volatile proposition into a risk-free one?
Quick explainer:
Lay betting is essentially betting on something not to happen,
Lay odds – the odds which you are prepared to offer someone wanting to place an ordinary back bet.
Backer’s Stake – the amount you are prepared to let the backer bet with you. This is your potential winnings.
Exposure – (Lay Odds - 1) x (Backer’s Stake). This is the amount you are risking.
With some mathematical modeling and a few clever manipulations we arrive at the below formula. For the curious ones (should be or NGMI) the underlying mathematical theory describing how to derive such a formula can be found here.
Additionally, by using the above result we may construct a graph describing the profit function under the assumption that you are taking advantage of a 1000 $ freebet offer and use an exchange with a 2 % commission, i.e. values ordinarily used in practice. The result can be seen below.
IMPORTANT: Note the necessity of choosing low probability/high odds events for your freebets unless your mission is to waste money. Other things being equal it is always more favorable to aim at the higher odds ranges. However, at odds around 3.80 - 4.00 the curve begins to flatten out at a rapid pace and therefore we would say that the ‘freebet floor’ lies somewhere in this region.
A calculator implementing the above mathematics can be found here.
Case 2 - No betting exchanges available (USA, Canada)
Slightly more demanding. If no betting exchanges are available you will have to employ other bookmakers for bet hedging purposes. In our upcoming practical guide we will provide recommendations of free betting software to help you find which bookies are offering the top market odds in case you are not comfortable doing this manually, all to make sure you are not wasting precious dollars betting at worse odds than available elsewhere.
Either way, we state the formulas for the ‘no-exchange‘ case below and if you are interested in the math behind it you visit our PDF.
Note: With some clever assumptions on the relationship between the odds on one outcome and the others we could come up with a similar plot/figure as in the exchange case. However, since the graphs would look more or less identical we abstain ourselves from doing more than repeating the fact that the strategy of *low probability/high odds events* is again optimal.
Correcting Note: The above note is *wrong* since the problem is somewhat changed when the sportsbook vig/take is introduced. Please refer to the comments section for more information. Below is an updated graph that describes the true relationship between a freebet & its parameters, i.e. the vig/take and the odds, under this [American] scenario. The freebet value is assumed to be $1 000.
Contour plot interpretation:
The lighter the colour, the larger the profit.
Along a given line, the profit stays the same.
A calculator implementing the above mathematics can be found here.
Summary
As stated before the freebet offer is extremely common in the US and since most of our readers are US-based this should probably turn out to be our most influential post so far.
The obvious main takeaway:
If offered a freebet, you *must* bet it on a low probability/high odds event (3.80 - 4.00 great proxy for a ‘freebet floor’) to maximize the value of it.
Finally, in order for you to run your bonus rugging operation smoothly and with confidence we would absolutely recommend you to read through the math carefully at least once. Nevertheless, we realise that the majority of you will ignore this advice and if you choose to do so then at least make sure you understand how to use the website calculators.
Extra information:
A discord server was set up last week with the long-term goal of creating a devoted betting community. You join the server by clicking this link.
The website lists of bookmakers available in every state/province/country have recently been updated. Head over to bowtiedbettor.com and check them out!
See you in the betting pools, anon…
Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of mathematicians who moved into betting.
"With some clever assumptions on the relationship between the odds on one outcome and the others we could come up with a similar plot/figure as in the exchange case."
Not sure if you check comments on old posts, but I'd really like to see your profit graph for the American case where you're hedging with other books instead of exchanges.
I wrote my own script exploring this. I'm assuming a 2 outcome game, and my relationship between the odds is that I assume the implied probabilities always sum to 22/21 (the case in the -110/-110 and most normal situations; it breaks down when odds get to +2000 or more but that's a whole other discussion).
I'm finding you maximize profit when the freebet is used on odds broadly between +250 and +500 (max at +360), but on longer odds your profit goes back down pretty sharply.
Also, the max profit is around $60 for a $100 freebet, which is sorta the worst case of assuming you can only get odds from one book. Presumably shopping around a bit can get you back to your ~$70 profit, but it's not continuously increasing at longer odds like your plot with the exchanges.
Perfect timing with football about to start up in the US.
And rest assured, you’ve tapped into a community with plenty of nerds/autists who will track through the math.