The cash out feature has unquestionably revolutionised the way that we bet online over the last decade or so. There are few features that have become so prevalent so quickly in the industry, and with pretty much all major bookies now offering the feature it’s important to know how the process works and if it offers any value.
The bookmakers will have you believe that the cash out feature is a bettors best friend, there for locking in a profit or limiting a loss. Previously you would just have to let these things ride, but now you can close bets early and be on your way.
They make it all sound very easy and very innocent, but the reality is that the bookmaker makes good money from bets that are being cashed out. Just like when you place the bet, they have worked in a margin to the cash out price and make their money again. So although it may seem like a great deal from the punter’s point of view, rarely, if ever does it offer good value even when it is the right call.
The first part of this article first needs to address the overround that bookmakers charge. This is sometimes referred to as ‘vig’, ‘juice’ or just simply as the bookmaker’s ‘margin’. It’s basically the percentage that the bookie will take as profit from each market. We’ve loads of articles that go into this in depth, so if you want to learn more about how this works, then go check those out first.
Overround is applied to every market that you bet on. Here’s a quick example of the overround charged by BetVictor on the Match Result market between Liverpool and Norwich.
- Liverpool to win = 1.167 = 85.7% implied probability
- Draw = 8.5 = 11.8% implied probability
- Norwich to win = 21.0 = 4.8% implied probability
- Total implied probability = 102.3% – 100 = Overround 2.3%
From the above example we see that BetVictor are going to take 2.3% of all bets made as their margin for this game. This is actually quite low for a betting market as BetVictor are known for having great odds on football, which is good for the punter. Anything lower than 5% is considered to be pretty good going and anything higher is not great.
You pay the overround for each bet that is placed because of the odds you are given. The punter never gets true odds here as the margin is higher, if you get the margin to 100% then you will have what the bookmaker considers to be true odds, but this is rarely, if ever the case.
If we look at the draw result as our example, we can see that BetVictor are offering odds of 8.5. If we take into account that the overround has been applied, we can state that the true odds for the draw might be nearer 9.0. The difference is their cut.
Let’s say we place a £10 bet on the draw at odds of 8.5. This means that our £10 bet will return £85 if the draw comes in.
But what you will notice is that as soon as you place your bet the bookmaker will offer you a cash out price that is less than your original bet. The majority will offer a price of 5% less than the stake that you have placed. So, this would be £9.50 before a ball has been kicked.
This is because not only do you pay for the overround on the original bet but you also pay for the overround on the cash out bet as well, and in a lot of cases this number is higher than that of the original overround. If you were to cash out before the game had started, you would have paid two lots of overround to the bookmaker and you are down 50p from your £10 wager.
Let’s assume we leave the bet to run and the game gets to half time at 0-0. The bookies have changed the price of the draw to just 6.00 as it now looks more likely. A fresh £10 bet at this point would now only return £60.
However, as we have already made our bet our odds stay at 8.5, but our cash out odds are adjusted based on the current price. If we run this through a cash out calculator, we can see that we should be getting around £14.17 as our cash out price at this point – a profit of £4.17.
But the bookmaker is taking their 5% margin that we spoke about earlier and only offering us £13.47, which is less than the true value should be.
We decide to let the bet ride and at 80 minutes it is still 0-0. The in-play price for the draw has dropped to just 1.80 as the game looks like it’s going to end that way. At this point the bookmaker should be offering up £47.22 for our cash out, but again, the 5% overround kicks in and they are only offering £44.86, some £2.36 less than it should be.
The moral of this example is that whenever you take it, the cash out price is always going to be adjusted with an additional overround for the bookmaker. It’s something that not many people are aware of, but it should be factored in to your decision. Think of it as a service fee for using the feature.
The margins are going to change with each bookmaker, but from our research we have seen most bookies start and continue at 5% which is about par. But the fact you might have paid this twice means that you’ve paid a 10% margin on your bet. If the initial margin and the cash out margin are higher than this, you could be looking at 15, 20, even 30 percent on a single bet.
So is Cash Out Bad Value?
From a purely mathematical perspective you would have to say yes, it is bad value. You are taking two hits on the same bet and paying the bookmaker double. You may think you’ve won because you have taken the money, but the bookmaker has your cash out bet covered with the exact opposite bets and even uses exchanges to make sure they are covered for bigger payouts.
The fact that so many bookies employ the cash out feature and market it heavily should instantly ring alarm bells for the punter. They are in the game to make money and they aren’t going to include a feature that is going to leave them out of pocket.
We’ve spoken about accumulator bets in previous articles as well, and they do a similar thing with those: take a margin for each bet that you include to create a huge overround for the overall bet. If you think that you have a 3% margin on 5 bets, then the numbers tilt in the bookies favour massively. Apply the cash out overround to that and you could be looking at overrounds of 30%+ on your bet. Madness!
However, there’s more to it than a simple mathematical equation. Football betting has a lot to do with numbers, but we think there are times when taking the numerical hit can be a good thing that the punter should strongly consider.
When to Use Cash Out
There are times when the cash out feature works well, but they are going to differ from bettor to bettor. In the plainest terms, if you are happy with the sum of money being offered by the bookmaker and prefer guaranteed profit to further risk, then take the money. It’s all well and good working overrounds and value into these bets, but at the end of the day you are still walking away with more money in your pocket.
For example, let’s say you’ve a 5-fold accumulator bet priced at 100.0. You’ve put £10 on and it’s set to return £1,000 if it comes in. With 10 minutes left all 5 teams are winning by just 1 goal. This means that 1 goal in any of those games could ruin the whole bet. The bookmaker is offering you £750 for your bet.
You know that in reality the price should be nearer £800, but you also know that £750 pays for a nice week away somewhere hot. Yes, you are losing some value or edge from cashing out at this point, but that’s always going to be the case if you decide to cash out. That £750 is a great return on a £10 stake and your bet is still very much on the knife edge. This would be what we call a “real-world” cash out and one that should be taken every time if you ask us.
That said, no one can tell you when you should or shouldn’t cash out. You can make more informed decisions based on value and overrounds, for sure, but if the cash helps you in the moment, take the money.