How To Maximize Welcome Bonuses at Legal Sportsbooks

How To Maximize Welcome Bonuses at Legal Sportsbooks

This article is part of our Betting Advice series.

Professionals and sharps aside, the house takes enough juice to have a long-term advantage over bettors. At typical odds of -110, we need to win 52.4 percent of wagers to break even. Which doesn't sound that hard, but apparently is, as evidenced by juice/vig more or less staying the same over time while new legal sportsbooks, casinos and betting apps pop up all over the place.

There is one time when the house is at a disadvantage compared to an average bettor — when we first sign up with a new book and get a new-user or first-deposit bonus. These bonuses at offshore sportsbooks or brick-and-mortar establishments tend to be small, or else are accompanied by complicated playthrough requirements that shift odds back in the house's favor. But that's not the case these days with apps and legal online sportsbooks.

Take Advantage of Welcome Bonuses in Legal Sports Betting

There are some great bonuses available with all the apps popping up, especially in states with immature markets where big companies like DraftKings, MGM, Caesars and FanDuel compete with a number of lesser-known providers to capture market share early in the game. Relatively populous states like New York, Illinois, Pennsylvania, Indiana, New Jersey, Arizona, and Colorado had up to 10 sites offering bonuses at the same time at one point.

In some cases, these are straightforward deposit matches, e.g., we deposit $250, have $500 to play with after a 100 percent match and then can withdraw all remaining money once we've bet through the full $500. If we divide that $500 between 50 bets, or even 15, it's highly likely we end up with more than the $250 we started with (assuming -110 odds, we only need to win 14 of our 50 $10 bets to surpass $250).

Most apps won't make it quite that easy, instead offering what's known as a "risk-free wager." The name is misleading — deposit matches actually entail less risk — but often these "risk-free" offers have a higher expected value (EV), a.k.a. the mean outcome or average profit. Paradoxically, the way to maximize EV on risk-free bets is actually to welcome risk by betting underdogs.

What Are Risk-Free Bets?

A "risk-free" offer returns a losing wager in the form of either site credit or a "free bet" of the same value. You might call it a form of insurance, often available for new users on first bets up to $1,000 (though some sites only do $250 or $500). If we make that first bet for $1,000 and win … nothing happens, apart from the usual procedure of receiving our initial stake and winnings. Now, if we lose our first bet, that's where things change. Instead of the usual diddly squat that losers get, we're left with either $1,000 in site credit or a "$1,000 free bet."

In other words, the prize for winning our first bet is the same as ever, while the penalty for losing is hugely reduced. We thus maximize EV with long shots — like a parlay or an underdog moneyline — rather than a typical bet at -110 odds or thereabout. The median outcome might be better if we made those traditional bets, but EV (mean expectation) rises as we shift to longer and longer odds. This doesn't mean we need to bet an eight-team parlay or anything outrageous like that; most of the benefit has been captured by the time we're in +250 or +300 range, which means a parlay with two or three legs should do the trick.

The big thing to be careful with is when apps return "free bets" rather than straight-up site credit for a lost wager. It might sound like the same thing, but it's not, at all. Free bets, unlike site credit, typically don't include the initial stake in the return, which means that if we win a $1,000 free bet at -110 odds we'll receive $910, not $1,910 (the original $1k isn't included). If we plan to bet at -110 odds, making what's essentially a 50/50 pick, our EV is half of $910, a.ka. $455.

How To Maximize Your Risk-Free Bet

The trick here, again, is that we improve EV by going with long shots on these free bets. Take, for example, a typical two-team parlay at odds of +264, with implied win probability of 25 percent (the line would be +300 if not for vig). Three-fourths of the time we'll lose and get nothing, while one-fourth of the time we'll walk away with $2,640 from our $1,000 free bet. Our average outcome is $2,640 * ¼, or $660, much more than the $455 mentioned above when betting at -110 (#math) — see the chart below.

If mean expectation is the goal, our best strategy is to commit to betting underdogs and parlays from start to finish. It's easy to see, though, why many people won't do this, as we end up losing $1,000 just as often or more often than we end up winning. 

When we do win, however, it'll be more than a $1,000 profit. If we stick with the two-team parlays at +264 and win our first bet, we'll walk away with $3,640, turning a $2,640 profit. And this is what will happen 25 percent of the time for an average bettor. As for the other 75 percent … 25 percent of that is 18.8 percent, which represents the scenario where we lose our first bet but win the second/free bet, thus walking away with $2,640 (see example to the left) for a profit of $1,640.

So yes, we lose $1,000 slightly more than half the time (56.25 percent), but our mean outcome nonetheless is a profit of $405 (2,640*.25 + 1,640*.1875 + -1,000*.5625). Following the same process at normal -110 odds and thus an implied 50/50 chance of winning each bet, we get an average profit of only $182.50, with half our scenarios resulting in a $910 profit, one-fourth in a $90 loss and one-fourth in a $1,000 loss. 

I say "only $182.50" because there's a better opportunity available for the risk-tolerant, though a projected profit margin of 18.25 percent obviously is still miles better than what we normally expect when betting on sports or anything else.

The app/book is making their own bet, of course — that customers either won't notice the bonuses, will continue betting afterward and lose back any winnings, or else will return to the site at some point in the future after a positive first experience. The risk-free offers are not a winning proposition for problem gamblers, nor for those who lack funds or risk-tolerance.

Sign Up For Multiple Sportsbooks To Maximize Your Return

For anyone with some money, risk-tolerance, a bit of time and an interest in sports betting, the best way to approach this is to sign up for multiple apps, use the deposit offers on each and then withdraw all the money (perhaps to use on yet another app with a risk-free bonus?). 

Consider it a bonus that we get to look at all the different apps and figure out which is our favorite, if we do indeed intend to bet recreationally even after the sign-up offers are gone (the providers certainly hope so).

For the truly enterprising, some sports betting providers even allow us to use the same bonus again if we sign up for their app in a second state. The only requirement is to physically be located within a state when placing a bet on the associated app. Not every provider allows for this, but it's worth a look for those who travel a lot or live near the borders of states with betting apps. Here is an example of how to take advantage of multiple online sportsbooks:

If you sign up at BetMGM with the BetMGM bonus code ROTOBONUS, you get up to a $1,000 bet in most legal states. Then, you can sign up with the Caesars Sportsbook promo code ROTOFULL for a $1250 bet. Now you're at up to $2500 in bonuses. You can then sign up with the FanDuel promo code for an additional bonus. After nearly $3,500 worth of offers, you can use other promotions such as the WynnBET promo code for $100, the DraftKings promo code for a 20% deposit bonus, or the BetRivers bonus code which gets you $250 if you deposit $250. Other bonuses include the PointsBet promo code and up to a $500 match using the Betsafe promo code.

And that brings us to the boring-but-important part — a reminder to read the terms and conditions. Even if you never read T&C otherwise, like a normal person, this is the time to do it. It isn't just a matter of being cautious, or crossing T's and dotting I's. It's about figuring out the exact terms of the bonus to maximize expected return. That need not always mean a pen, paper and calculator, though it's certainly encouraged, but at least make sure to understand exactly how the whole thing works before plopping down hundreds or thousands of dollars.

This article appears in the 2022 RotoWire Fantasy Football magazine.

Jerry Donabedian
Jerry was a 2018 finalist for the FSWA's Player Notes Writer of the Year and DFS Writer of the Year awards. A Baltimore native, Jerry roots for the Ravens and watches "The Wire" in his spare time.