Cash out – Bookies Love It, Punters Shouldn’t

My general rule with bookies is that if the bookie is happy for you to do something then they must have a good reason, which suggests it’s unlikely to be in your best interests.

Cash out falls into this category.

It can be hard to tell why it’s bad for the punter but here are a couple of examples that demonstrate the poor deals.

I was shown a £1 double at odds of 10/3 and 6/1 with Ladbrokes. The first leg won and they offered a cash out of £2.10.

How do we know that’s poor value? Well, £1 at 10/3 returns £4.33, so if the bet had been a single that would have been the payment.

Admittedly, you are being given the option to close the double out, so perhaps you should be paying for that privilege. Let’s say that 6/1 shot should really be a 7/1 shot, so we’ll give you 7/8’s of your money back, returning you £3.79. That’s a long way off the £2.10 offering which is the equivalent of having £1 at 11/10 instead of 10/3. They are offering under a half of what the bet would have paid out if it were a single.

This is just one scenario and the customer wouldn’t usually avail themselves of that offer, so let’s find a more plausible one.

The second example is a 4-timer on football matches at odds of 13/10, 5/6, 1/2 and 5/1. A £1 stake could return £37.95. The first 3 selections all won so the bet was running on to the final leg, the 5/1 shot.

Ladbrokes came up with the cash out offer of £4.17.

Was that generous or stingy? To know that we need to be able to work out the odds. Just a £1 treble on 13/10, 5/6 and 1/2 would have paid £6.325 (23/10*11/6*3/2), so somewhere in that area wouldn’t appear too wide of the mark.

Again, I appreciate bookies aren’t there as a benevolence fund so maybe the 5/1 shot should really be 6/1. Tell you what, I’ll give you 6/7’s of your money as cash out - £5.42.

Still nowhere near as low as the £4.17. The customer has risked that £1 to build it up to £2.30 after the first leg, then £4.22, up to £6.325 by the end of the third leg. The bookie has then played snakes and ladders, or in their case just snakes, and offered £4.17, this time under 2/3’s of what it would have paid as a treble.

So, what should you do? Not take the cash out for sure.

Option 1. Let it run. That was the bet you placed, so it’s all in.

Option 2. Hedge it at a reasonable price where you’re not giving so much profit away. That’s an area where exchanges can be helpful with the odds being somewhat more realistic.

The 5/1 might be available to lay at 6.0 decimal (5/1 odds), so you are giving somebody else the opportunity to back the team at 5/1.

As this is a real example we have a halfpenny in the equation, the money running on to the last leg stood at £6.325, so consider the outcome if you could lay the lot to somebody else at 6.0.

If the final selection won, Ladbrokes would pay £37.95 for a £36.95 profit, and you would pay somebody else £37.95 for a £31.625 loss, with a final outcome of plus £5.325.

If the final selection lost, you would lose £1 to Ladbrokes and somebody else would pay you £6.325 for a final outcome of plus £5.325. Job done.

Life is never quite that simple though. There’s the commission to pay for your winnings on the exchange, sometimes as high as 5% and there’s no guarantee you’ll be able to lay off at the same price as the bookies gave you.

So here’s a more likely outcome but one that still improves significantly on the cash out offer.

The 5/1 shot was available to lay at 6.6 on the exchange. The winning pay out would be £37.95, so be prepared to pay that out on the exchange and lay 37.95 / 6.6 = £5.75.

That way if the last leg wins you keep £4.75 and if it loses you keep £4.46(after a 5% commission), still well ahead of the Ladbrokes cash out of £4.17.

Surely Ladbrokes aren’t the only bookie providing this rip-off cash out service, but come on guys, give the punter a fairer deal.