"As mentioned in one of our previous posts, a common offer in the US is a risk-free bet, which if lost, is returned in freebet credits. Since the true value of a freebet is ~ 70 % of its nominal value this kind of proposition is equivalently modelled as the combination [70 % Risk-free bet, 30 % Qualifying bet]."
This is the most common US offer, so I feel like it could use its own post, or at least some further explanation. I'm trying to make sense of how to deal with these.
I can't just treat it as a free bet and put it all on an underdog while hedging at another book, because if the underdog wins, I'd end up losing money due to the hedge. Is this where the 30% qualifying bet part comes from? Only hedge 30% of the first bet at another book? Then if it loses, hedge the free bet at 70% of what I would for a "true" free bet at that value? Does that lock in the same profit?
I'm trying to model this type of offer as well with different vigs and odds to teach myself how it works and get my bearings, but I'm having a harder time wrapping my head around how to approach it (or how you are suggesting to approach it).
Thought about it back when they were created but decided not to due to the following reasons:
- Qualifying Bet & Exchange Calc will show negative profits [how much you're losing], which can be confusing. Extra so since Freebet & Risk-free Bet will show positive ones.
- Master Calculator will combine Qualifying Bet P&L's [always negative] with Freebet P&L's [always positive] and therefore yield mysterious & irrelevant 'expected profits'.
- Many offers are "one offer packaged within another". People will therefore expect to earn ~65-70 % of their "freebet inside risk-free bet"-offers after consulting the calculators, only to believe something's off when only being able to realise 50 % of the nominal value.
Will reconsider the decision though, perhaps +EV to add this feature [with some clarifying comments] to all but the Master Calculator.
I'm finding that these "promo" bets are worth ~70% of a true free bet, which in turn is worth ~70% of the nominal value. So you really only get about half (0.7 * 0.7) the value of the "promo bet" in profit, which is a bit disappointing. For some reason I felt like these should be an even better value. Guess that's psychologically why they use them.
Quick aside, I read your "qualifying bet" advice to basically mean bet all sides of a game and accept the vig loss as the cost of doing business to meet the conditions to free up the money. i.e. you should expect to lose ~3-5% of your money for every dollar of qualifying betting you have to do, so try to keep it to a minimum.
So I think I see now what you meant in the original quote. You have to bet the nominal value of the "promo bet" but it's equivalent to a "true free bet" of only 70% of the value. The other 30% is effectively a qualifying bet that you have to make. And indeed, whatever percent I assume a free bet is worth of the nominal value, if I use that and 1-that as a qualifying bet on your master calculator, I'm getting the same hedge value recommendations as my code.
This took a lot of thinking and coding for me to start to grok, so I definitely think it deserves its own post with a clearer explanation at some point for the sake of everyone else.
"I'm finding that these "promo" bets are worth ~70% of a true free bet, which in turn is worth ~70% of the nominal value. So you really only get about half (0.7 * 0.7) the value of the "promo bet" in profit, which is a bit disappointing. For some reason I felt like these should be an even better value. Guess that's psychologically why they use them."
This is correct.
"So I think I see now what you meant in the original quote. You have to bet the nominal value of the "promo bet" but it's equivalent to a "true free bet" of only 70% of the value. The other 30% is effectively a qualifying bet that you have to make. And indeed, whatever percent I assume a free bet is worth of the nominal value, if I use that and 1-that as a qualifying bet on your master calculator, I'm getting the same hedge value recommendations as my code."
This is correct.
& yes, thanks for your input, this will be the topic of our next post.
Another question for you.
"As mentioned in one of our previous posts, a common offer in the US is a risk-free bet, which if lost, is returned in freebet credits. Since the true value of a freebet is ~ 70 % of its nominal value this kind of proposition is equivalently modelled as the combination [70 % Risk-free bet, 30 % Qualifying bet]."
This is the most common US offer, so I feel like it could use its own post, or at least some further explanation. I'm trying to make sense of how to deal with these.
I can't just treat it as a free bet and put it all on an underdog while hedging at another book, because if the underdog wins, I'd end up losing money due to the hedge. Is this where the 30% qualifying bet part comes from? Only hedge 30% of the first bet at another book? Then if it loses, hedge the free bet at 70% of what I would for a "true" free bet at that value? Does that lock in the same profit?
I'm trying to model this type of offer as well with different vigs and odds to teach myself how it works and get my bearings, but I'm having a harder time wrapping my head around how to approach it (or how you are suggesting to approach it).
Thanks for another great question. Will get back to the matter, either here or in, as you suggest, a new post.
PS: I really think you should add an "expected profit" line to all of your website's calculators to go along with the recommended bets.
Thought about it back when they were created but decided not to due to the following reasons:
- Qualifying Bet & Exchange Calc will show negative profits [how much you're losing], which can be confusing. Extra so since Freebet & Risk-free Bet will show positive ones.
- Master Calculator will combine Qualifying Bet P&L's [always negative] with Freebet P&L's [always positive] and therefore yield mysterious & irrelevant 'expected profits'.
- Many offers are "one offer packaged within another". People will therefore expect to earn ~65-70 % of their "freebet inside risk-free bet"-offers after consulting the calculators, only to believe something's off when only being able to realise 50 % of the nominal value.
Will reconsider the decision though, perhaps +EV to add this feature [with some clarifying comments] to all but the Master Calculator.
Ok, I *think* I managed to model it. I added to my previous script and came up with this to explore it. The comments explain some of my thinking.
https://gist.github.com/ethankruse/fb3e3355f14ca388972dd8131ffe093a
I'm finding that these "promo" bets are worth ~70% of a true free bet, which in turn is worth ~70% of the nominal value. So you really only get about half (0.7 * 0.7) the value of the "promo bet" in profit, which is a bit disappointing. For some reason I felt like these should be an even better value. Guess that's psychologically why they use them.
Quick aside, I read your "qualifying bet" advice to basically mean bet all sides of a game and accept the vig loss as the cost of doing business to meet the conditions to free up the money. i.e. you should expect to lose ~3-5% of your money for every dollar of qualifying betting you have to do, so try to keep it to a minimum.
So I think I see now what you meant in the original quote. You have to bet the nominal value of the "promo bet" but it's equivalent to a "true free bet" of only 70% of the value. The other 30% is effectively a qualifying bet that you have to make. And indeed, whatever percent I assume a free bet is worth of the nominal value, if I use that and 1-that as a qualifying bet on your master calculator, I'm getting the same hedge value recommendations as my code.
This took a lot of thinking and coding for me to start to grok, so I definitely think it deserves its own post with a clearer explanation at some point for the sake of everyone else.
"I'm finding that these "promo" bets are worth ~70% of a true free bet, which in turn is worth ~70% of the nominal value. So you really only get about half (0.7 * 0.7) the value of the "promo bet" in profit, which is a bit disappointing. For some reason I felt like these should be an even better value. Guess that's psychologically why they use them."
This is correct.
"So I think I see now what you meant in the original quote. You have to bet the nominal value of the "promo bet" but it's equivalent to a "true free bet" of only 70% of the value. The other 30% is effectively a qualifying bet that you have to make. And indeed, whatever percent I assume a free bet is worth of the nominal value, if I use that and 1-that as a qualifying bet on your master calculator, I'm getting the same hedge value recommendations as my code."
This is correct.
& yes, thanks for your input, this will be the topic of our next post.