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Taking Advantage of Deposit Bonuses

by Ed Miller |  Published: Jul 03, 2019

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A dirty secret of professional gambling is that a very substantial proportion of the win comes directly and indirectly from the casino or betting operator’s marketing budget.

Back in the early 2000s, it was very easy to make a six-figure living playing poker full-time. Why? Because poker was the “hot new thing” (Buffalo Bill probably would have laughed at that one) and online poker operators were making it rain with massive marketing budgets. Advertisements everywhere encouraged brand new players to deposit money and promptly lose it to the pros.

Sites offered very generous deposit and reload bonuses, and professionals developed protocols to maximize these. And sites also ran affiliate marketing programs—these were designed to encourage professional marketers to use novel ways to reach new players. But this spawned “rakeback” where already established professional players would sign up for new accounts under one of these affiliates in exchange for being kicked back most of the money that was intended for the marketer.

Poker players were making money directly from the marketing budget (rakeback and bonuses) and indirectly (by enjoying a stream of fresh fish brought to them by the marketing). Once the frenzy died out and the money spigot got shut off, winning at poker became a whole lot harder very quickly. You had to actually, like, study the game and stuff.

The beauty of poker is that you play against other players, so when a clueless person sees an ad and deposits their money, you get a direct crack at their money. In sports betting, unfortunately, you never get direct access to someone else’s recreational dollars like that.

Nevertheless, as sports betting explodes across the country, so will marketing budgets (at least for a few years). You can and should funnel at least a few of these marketing dollars into your accounts.

The main thing to look out for are deposit bonuses. The sportsbook says they will double your first deposit up to some limit—say $500. Usually these offers come with a fairly substantial string attached. You have to bet some multiple of the bonus—maybe 10x or 20x—before you can withdraw the bonus.

So, let’s say you deposit $500. The sportsbook awards you a $500 bonus. You’re required to bet 20x the bonus, or $10,000 in this case, before you can withdraw.

If you have the ability to find winning sportsbook bets, then great. Just make your winning bets up to the $10,000 requirement and either cash out or don’t.

If you don’t have that ability yet, however, you can still profit from the bonus. The key idea here is a bit counterintuitive, however. You should try to go broke.

Yes, you read that right.

You want to bet in a way that maximizes the chance you bust the account. Because if there’s no bonus anymore because you lost it all, then there’s no more betting requirement.

Okay, I know this sounds like I’m being glib, but this is the actual perverse math of these bonus things. Here’s how it works.

Let’s say all you know how to do is bet into four percent holds with no skill. So, you expect to lose four percent of your total betting handle. If you have to bet $10,000, then your expected loss is $400. The entire bonus was $500, so after expected loss you’re only making $100 (on average). Not great.

Now let’s say you take my advice and go nuts with it. You bet the entire $1,000 on a +200 underdog. Let’s say this team actually has an 31 percent chance to win the game. Then 69 percent of the time, you will have bet only $1,000 and your “theoretical” loss is $70.

TL = -0.69 * $1000 + 0.31 * $2000 = -$70

The other 31 percent of the time you have a $3,000 bankroll and a requirement to bet $9,000 more. So you do it again. You bet it all on a +200 underdog. Now your theoretical loss is -$210 (because you’re betting three times as much).

Say you win this one too, and now you have $9,000. You have to bet $6,000 more to fulfill the cashout requirement, so you do that at a four percent hold for an additional theoretical loss of -$240.

Your total theoretical loss therefore is
TL = -70 – 0.31 * 210 – (0.31*0.31) * 240 = -70 – 65.1 – 23.06 = -$158.16

By going for broke twice, you’ve cut your theoretical loss to the sportsbook from $400 to just $158.16. This is because those times you went broke (0.69+0.31*0.69=0.904) you lost way less than the $400 in theoretical hold the sportsbook asked for in exchange for your $500 bonus. Only 9.6 percent of the time did you lose the $400 to the house.
I know this still likely seems like voodoo math, so I will break it down a different way as well.

Let’s presume that the sportsbook allows you to bet through your requirement by negative scalping yourself. Like they let you bet the Ravens -160 and the Steelers +135 in the same game to lock in a roughly four percent loss with no risk.

In the first case where you didn’t use my crazy strategy, you end up with about $600 every time. Your original $500, the added $500, and then the $400 loss from betting both sides of a few games until you met your requirements.

In the second case, 90.4 percent of the time you end up with $0. That’s how often you lose either the first or second big bet. The other 9.6 percent of the time you end up with $8,760—the $9,000 you have after winning the longshot games minus the $240 loss from negative scalping to meet your requirement.

Your average bankroll then is 9.6 percent of $8760 or $840.96. (This is $1,000 minus the theoretical loss of $158.16 I calculated above, modulo a couple rounding errors.)
Do it the lame way, you come away with $600. Do it my way, you come away with $840.96 on average. You make more money on average with these bonuses if you try to bust your entire deposit.

Obviously, you have to be very willing to lose your initial $500 deposit to make this strategy attractive. If $500 is a lot of money to you, you’re better off taking the sure thing than the wild gamble.

But if you can afford to burn through some $500 deposits, my strategy is much better. Not only do you make a lot more money over the long-term doing it my way, but sportsbooks will like it a lot better as well. They want you to gamble with the bonus money. They don’t want to see you grind it away and cash out at a small profit. If you plow that deposit and bonus straight into a wild longshot and lose, you’ve got a better chance at getting another marketing offer from them soon.

Deposit bonuses aren’t the only promotions you can use to your advantage. I’ll talk about more in a later article. ♠

Ed MillerEd’s newest book, The Course: Serious Hold ‘Em Strategy For Smart Players is available now at his website edmillerpoker.com. You can also find original articles and instructional videos by Ed at the training site redchippoker.com.