Hi guys, Joonas here, founder of Edge Alerter. Today I’m going to go through how we can convert bonus bets into cash at over 100%. Some of our betting course videos go in to bonus bet conversion but in this article I’m going to give a little bit more insight into the system and how that works and how you can get the most out of it as well.
My background for those unfamiliar, I’ve got a quant finance background, I’ve been a professional derivatives trader for many years. I did a stint at Bet365 for five years where I was as generalist in-play guy but also essentially the head of in-play golf for the Asian time zone and I’ve also been betting successfully for many years.
Key facts about bonus bets
You’ve no doubt seen the bookies out there with an unbelievable amount of promos. There have never been more as of right now February 2022 but the bookies continue to use these promos as a way to acquire and retain customers.
A key reason is that the punters out there are inefficient at using them and we’ll go through a mathematical breakdown of Edge in a sec but all you need to know for now is that because the general public are very inefficient at bonus bet conversion, the bookies dish them out everywhere so there’s a really special opportunity for us right now.
The main difference you need to be aware of with cash bet and a bonus bet is you don’t keep the stake.
If you have a cash bet of $100 on a $2.00 chance and it wins, you’ve got $200 of cash. if you have $100 bonus bet on a $2.00 chance and it wins, you’ve only got $100. Many people are aware of that but they don’t really care, they see bonus money or bonus bets as free money, free hits and hence the reason why they very inefficient on the whole.
Just quickly, on our results, historically we’ve tipped over 2000 bonus bet opportunities primarily in racing and golf with, if you look at the numbers on the whole, we’re converting bonus into cash at 106%. The profit on turnover, if you’re backing them with cash is 14%. This is pretty spectacular. I don’t believe there’s anyone in the market who could get anywhere near these numbers and again that’s a very big sample.
The other thing to note here which many might not be aware of is we just assumed sports bets prices for all the bonus bet tips, whether they’re in golf or racing or other. If you shop around you’ll get around 8% higher price but we like to be conservative with all our results as opposed to the many other players out there who assume top price best case every time.
So how do we convert bonuses into cash at over 100%.
Short answer is we’re finding value in the $8 to $30 price range. Sometimes the shortest we’ll go with the bonus bet tip is $6.50 and the biggest we’ve gone is $81 but 90% of them will sit in the $8 to $30 price range.
The mathematical short answer is we’re finding opportunities where the bookies are at least a dollar over fair value. This is from one of our betting tools but let’s just say the bookies the bookies are $10 and the true odds are $9.
If that’s the situation you can see it’s a dollar difference, the expected conversion of bonus bets into cash is 100%. The loss on conversions is $0. If you go up to $20 and $19, it’s minus 1, you’re converting at 100%. You’re not going to get many opportunities to do that. We’re not going to find the bookies are 5 when the odds are four, that’s a massive percentage difference however the bookies are very often out in that $10 to $20 price range especially that gives us a starting point for the big opportunities.
Then the next question is, true odds, well that’s great but how do you even define fair value? Well we’ve got a couple of key ways that we do it. In racing we’ve got a price and volume model that does that. It’s been proven to be bulletproof over a long term.
In golf we also use pricing volume model but we’ve also got a proprietary model that runs simulations in golf which helps us out a lot. In other sports we’ve got various angles but these are, in racing and golf they’re kind of our key, that’s about 95% even 98% of the bonus bed tips are in other racing and golf.
Some general theses in and amongst all of this as well, is that we have a we have a bias against popular players and teams. The real simple way to look at that is if there’s a popular player, they tend to have an imbalanced amount of money backed on them and the bookies tend to go shorter.
They might even anticipate that flow so the value is generally not on favorites/popular players or teams with a bias against heavily backed players and teams as well. The question then would be how do you know if some players being heavily backed? Well maybe they’ve been leading for the entire game or tournament or whatever, so just having a bias against that.
Bias against leaders, these two are somewhat correlated. The leaders, generally, on the whole tend to be backed in an imbalanced way again and the bookies know that so they have to shorten their prices so they can balance their books.
The final point here as a general thesis
We do respect market moves but you need to be aware of manipulation as well. Betfair, many assume blindly that it is true price, it is a fair price and there’s some validity in that however Betfair does get manipulated by big syndicates, by bookies at times.The medium and smaller ones typically but respect market moves if you’ve got some awareness for the manipulation risk as well.
Then remember we’ve got expectancy, that’s great, we’re converting at 106% long term but if you’re betting on $8 to $30 pops surely there’s a risk that you’re just going to get drilled in a two week unlucky period.
Very good point, that’s why I go back to two parts of professional trading betting.
Part one, finding quantifiable edges with positive expectancy and second part is managing variance. How do we manage variance? I’m glad you asked, we got three key parts to this. With the bonus bet tips in racing, they’ve got a negative correlation to the racing cash tips and that’s simply because if the cash tips are winning, the bonus bet tips in the same race can’t win. If the bonus bet tips are winning then the cash tips are not winning.Two horses can’t win a race. There’s this natural negative correlation which is nice.
The other way to look at it is that if the front end or the back ends of the fields tend to outperform, the fluctuations during the day pan out and if a front end tends to outperform/underperform then the back end is the exact opposite. We’ve got a natural shock absorber here which is nice.
Staking, we’ve got the quarter, half, full unit rules that we suggest based on the price that we tip. That’s just betting 101, having a staking plan and that’s part two.
Part three is specific to golf and in how we get a very high volatility in pricing so you might have two or three golfers, $30 into 10 after the first round and then you’ve got a couple of players after that first round who’ve gone, $10 into 30 for example and then you can back them at 30.
So, you end up backing, not the whole field but you might back five players in a tournament, all at sort of 20s for example. So that’s a nice variance reducer as well. In a very typical golf tournament, in four players you can see how there’s high volume. You can lay at the shorts and get them on at the bigger prices. The point there is this high volatility which is great for us.
In summary of how we do it, number one is expectancy, we find value in that 8 to $30 price range.
Second part is the management around variance. I talked about the negative correlation between the front end and the back ends. Ie; the cash tips and the racing bonus bet tips.
Staking plan, having that in there and ideally finding high volatility sports where you can back multiple runners.
Thanks for reading and the continuous support. Check out my Youtube Channel for more tips and success.