The ability to “cash out” a wager has fast become an integral part of many bettors’ armory of wagering tools. Likewise, many sportsbooks now offer their clientele the ability to take some money and run, for better or worse. Who is getting the better end? Well, it depends.
Originally pioneered by Betfair, specifically the Betfair Exchange, around the time that online in-play betting started to become very popular internationally, it is now a well-known tool utilized by many a bettor around the world for both pre-match and in-play bets.
I am sure we have all heard horror stories of those cashing out a bet for a very minimal amount when it would have gone on to win thousands. Rather than a bulging balance and an envy-invoking screenshot to show their friends, they now possess a sorrowful story that they would probably rather not share with anyone.
Let us take a deeper dive into who looks to benefit from the cash-out feature and how it can toy with the very fiber of our beings — even among the most seasoned bettors.
Mind games
Cash out or let it ride? 🤔 pic.twitter.com/LLQcjkTT1F
— BetMGM 🦁 (@BetMGM) October 3, 2022
This knowledge that you can cash out your bet can start to play, perhaps subconsciously, on your mind. You can place a pre-match bet with a perfect picture of how you believe the match in question may play out. You are fully prepared to live by the sword and die by it too.
The match begins and that narrative you had created doesn’t seem to be playing out perfectly. You tentatively look at your phone and see a number staring back at you, remembering that number is real money. Cashing out starts to become a little tempting, and you’re at least half-inclined to swallow the extra margin (the difference between the real probability and the odds offered by the bookmaker) and move the money on to your next wager.
Of course, the ever-changing variables in action within the match may make the cash out a wise play. Perhaps a better than expected first quarter or early score allows you to lock in a profit very early. Yet the initial investment, both in an emotional and a financial sense, has you curious about how your cashed-out bet is doing. Perhaps an easy route to frustration or despair?
As with everything in betting, it becomes a risk versus reward decision — with plenty of benefits and disadvantages to balance the seesaw. To my eyes, were it not, on balance, an advantageous move for the bookmaker, we would not still be seeing it today.
Generally speaking, bookmakers look to attach around a 5% margin or more to the cash-out offer on two-way events, with some bookmakers sitting well north of this — so much so you would be better off hedging the bet yourself by directly opposing it, where possible.
An example I encountered recently on an outright long-term market (with 20 backable teams): My bet was struck at odds of 5.00 with a stake of £100, returning £500 if it were to win. A few weeks later, the odds on the same market were 2.75. The fair (full) value based on these odds for this cash out, at this point, would be:
£500 (full potential winnings) / 2.75 (the current odds) = £181.81
The cash out I was offered at this point was £145, which is £36.81 less than the “fair” value, with a gargantuan 20% margin attached. My alternative in correctly cashing out of this market would either require backing all other possible winning selections or laying the selection on an exchange, which requires of a lot of capital on hand.
Spare a thought for this punter! They'll be regretting cashing out on this 13-fold @ 1914/1 🤯
✅ £28.50
❌ £19,140Oh, what could have been… pic.twitter.com/Za5c01zjVc
— Free Super Tips (@FootySuperTips) October 3, 2022
The future of cash out
The bookmaking world is ever evolving. The invention of the cash out was a large stride and one which some bookmakers still do not have the technology, ability, or fast-moving data to implement successfully.
But since the arrival of the cash out, there hasn’t been a huge amount of traction in its modernization or innovation. So what’s next? The ever-popular SkyBet, historically considered “bettor friendly,” frequently offers the option to cash out pre-match at the full stake – no margin attached.
This gives the perception to the punter that perhaps cashing out is very good value, as well as a fantastic tool. However, move into the in-play sphere and the margin will be attached to the price offered at any given time, with some very tricky calculations required to quantify how much you are essentially paying to “exit” your bet.
Partial cash out — essentially hedging — has been a step forward, available with a select few bookmakers, including bet365. This facilitates running your bet without risk of losing the stake, or simply reducing your risk.
I would hazard a guess at the future of cashing out involving incentives to do so, such as increased odds on your next selection of the same stake. Delving into the complexities of cashing out of “same game multi” bets would be a fantastic nut to crack for bookmakers, leading to readjusted odds and potential payout.
Cash out is king, but is it at the top of the bookmaker’s hierarchy? If nothing else, it can keep punters onsite and betting, akin to the desire of those who gain by keeping people at the tables in a casino. That can only be welcomed by bookmakers.
A. Phoenix is a seasoned sportsbook trader with experience scanning over two decades and recent expertise in the inside workings of the same-game-parlay over a plethora of different sports.
