Introduction to Cash Out Betting
Cash out betting is a relatively new phenomenon at online bookmakers and gives users of a site the opportunity to either lock in a profit or to cut their losses. In the past, when placing a bet you’d wait until the end of the match/game/tournament before either simply winning or losing – cash out gives users another option.
In this article I start by describing exactly how cash out works, giving two separate examples of when you might like to use the service. I move on to describe why online bookmakers find the service favorable. The article finishes by looking at the pros and cons of cash out betting.
How Cash Out Betting Works
You’ll find the cash out service at a growing number of sportsbooks and within these sites you’ll find the service on a growing number of different sporting markets. Cash out only works when you have actually placed a bet already on a market. At some point after that (perhaps immediately) the cash out service will tell you how much you can actually cash out for. You'll find this feature - along with the famous exchange and other advanced betting options - over at www.betfair.com.
Here are two examples of cash out in action:
You’ve placed a £10 bet on the win market of a televised Premiership football match. The bet is on the home team at odds of 2.1 (11/10 in fractional odds) – which means that should they win the game, you’ll make a profit of £11. You’re particularly happy when the home team go in at half time with a 1-0 lead. At this point you check the cash out value of your bet. At this point, the cash out value of your bet is £15.50. That is to say that you can take an immediate profit right now of £5.50 and the second half of the match is now irrelevant to your bet. Of course, you don’t have to take the cash out – the choice is yours.
You’ve had a £5 treble on the televised horse racing on a Saturday afternoon. The first two horses in the treble have won at odds of 2/1 and 5/2 and the final race is ten minutes away. At this point you have £52.50 riding on the last leg of the treble. You look at cash out, and you are being offered £49.00 if you cash out now. Once again, this is your call – let it ride or take the money and run?!
Why Do Bookmakers Offer Cash Out?
There are two main reasons why a bookmaker or sportsbook like the cash out option.
The first reason is because users of the site like it! Having an option like this gives the gamblers at the site some more flexibility and it makes gambling more interactive, and therefore interesting. Interested gamblers will keep coming back and spending money at the site.
The second reason is because it actually makes more profit for the bookmaker. Let’s go back to example One and see how. In this example the team was winning 1-0 at half time. At this point the bookmaker will evaluate exactly what the true odds of that team winning are – in this case they might have thought the team had exactly a 77% chance of winning. This means that 77% of the time they will expect to pay out the full £21 to the person who has placed the bet, and 23% of the time they expect to pay out nothing! A quick calculation shows that 77% of £21 is £16.17. So, in this example they are of the opinion that they will on average pay out £16.17 here, but are only offering £15.50 as cash out – therefore paying out less than they should all things being equal.
The Pros and Cons of Cash Out Betting
The biggest advantage of cash out betting is the fact that you can secure a profit on a bet without having to wait until the end. You might feel slightly nervous heading into the latter stages of a game with your team holding a slender one goal lead, or you might have backed a tennis player at long odds to win a tournament and he now finds himself in the final – in both cases you can secure a profit, and not have the tension associated with letting it run. Of course you can also use cash out to cut your losses. You might be involved in a football match that is going horribly wrong and that favored team you have backed are 2-0 down at half time – here you can salvage at least a little of your money back using cash out.
The main disadvantage of using cash out is that you’ll not win as much if your original bet does indeed go on to win. This can lead to a situation where you’ll actually feel a little disappointed despite having placed a perfectly good winning bet – denying yourself the high of simply placing a winning bet and seeing it through to the end.
I think this feature is here to stay, and that we should be seeing innovations built around cashouts soon - perhaps in combination with live betting. As usual BetFair are at the forefront of this innovation. The options at their sportsbook get more impressive all the time. Check out www.betfair.com for yourself now!
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