# Understanding Value

Sam Stoffel

11 Aug 2014

Updated: 13 Nov 2023

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One of the most common questions I get asked is one along the lines of: "Is this bonus worth doing?". Usually someone gets sent a promotion to their email inbox or they find an offer that isn't listed in the members area, and they want to know if it's worth attempting the offer. To the untrained eye it's not immediately obvious, but there are a few general principles you can use to determine whether an offer is worth attempting.

There's a lot of math's in this post. It's worth reading to gain a shallow understanding of, but don't worry if you don't understand it all. It's not required for you to understand.

The main way we determine if an offer has value is by its expected value, or +EV. An offer with +EV is worth doing, whilst an offer with -EV is not worth doing. Simply put, expected value means the average value of the offer. It does not necessarily mean the exact value (although it can, particularly with Sports offers).

In most situations, the EV of an offer is worked out like this: **Bonus - (Wagering * House Edge) = EV.**

## Casino + Bingo Bonuses

Take this as an example. A casino bonus requires a player to deposit £50 in exchange for a £50 bonus. If we take a look at the terms and conditions, it states that in order to withdraw the bonus, it needs to be rolled over 30 times on slots. Now, slots has a house edge of 5% (on average, though this does vary a lot), and in total we need to wager £1500 (£50 bonus x 30 = £1500).

So for this example, the EV works out like this: **£50 - (£1500 * 0.05) = -25**

This bonus has a negative value of £25. This means on average, you would lose £25 whilst attempting this offer. It is poor value and should not be attempted.

Now, if we use the same example as above, but say instead that the bonus needs to be rolled over on Roulette. Roulette has a house edge of 2.7%.

**£50 - (£1500 * 0.027) = +£9.50**

This bonus has a positive value of £9.50. This means on **average**, you would win £9.50 whilst attempting this offer.

It's important to understand the difference between EV and actual return. EV is only expected value, but it can be affected by something we call "Variance". When playing Casino or Bingo offers, you're ultimately playing a game of chance. Even though you have a mathematical edge over the long term (and you should do as many such offers as possible), it's still possible that you could end up making less of a profit, or even a loss. On the flipside, it's also possible you could make a much larger profit. The main point to remember is that as long as you are doing every +EV offer possible, even if you have a few losses here and there, you have a mathematical edge and will always win in the long term.

## Sportsbook Bonuses

Working out the value of a Sportsbook offer works in much the same way, although the "House edge" in our equation is determined by the quality of the match you can find. For example, if you only used bets that returned 97% of the bet amount (equivalent to a match with a rating of 97 on the oddsmatching software), then the house edge is effectively 3%. This means for Sportsbook offers, you need to consider how likely you are to get good matches in order to determine the value of the bonus.

For example, a bookmaker offers a £200 bonus in exchange for a deposit of £200. You need to roll over a total of £1200 in order to withdraw it. With this particular bookmaker, they have very good odds, so we know we can get a match of 98% or higher, so the house edge will be 2% or less. For this example, let's just assume we go for 98% matches every time.

**£200 - (£1200 * 0.02) = +£176.**

This bonus has a positive value of £176, if wagered entirely at 98% matches. This means that you would be guaranteed to win this much from this bonus. There's no variance involved because the outcome is guaranteed.

On the other hand, let's say another bookmaker offers a £100 bonus in exchange for a deposit of £200. You need to roll over a total of £1800 in order to withdraw. With this bookmaker, their odds are quite poor, so we will most likely only get matches of 94% or so, which equals a 6% house edge. For this example, let's assume we always take 94% matches.

**£100 - (£1800 * 0.06) = -£8.**

This bonus has a negative value of £8, if wagered entirely at 94% matches. This means that you would be guaranteed to lose £8 from this bonus. There's no variance involved because the outcome is guaranteed (although you could still get lucky and lose your first couple of bets and not have to bother with the wagering, which would make this offer still worth trying). You might also be able to find better odds if you waited a while.

There are some sportsbook bets that cannot be laid off. An example would be any bets on Virtual sports or bets on markets with no liquidity on the exchange. These are still worth doing because the odds (and therefore the profit) are stacked in your favour thanks to the free bet.

## "Refund If" Bonuses

There are some offers that we can't really work out their expected value. For example, William Hill regularly have Slots promotions wherein they give you £5 risk free on a particular slot. When you participate in these offers, you deposit £5 into William Hill and play on the designated slot. If you lose your £5 they refund the money as cash. There's no guarantee you'll make any money at all from this offer, but it's a risk free chance at a big win. We can't really designate any particular value to the offer because there's no actual bonus awarded, just a refund if you don't make money.

Some types of Sportsbook offers are similar. For example, during the World Cup Ladbrokes did a promotion wherein they would refund all losing Correct Score bets if Italy won the game against England. Our strategy for that offer was to back and lay any Correct Score market on that particular game (So for example, 1-1), and then hope that Italy won. This general strategy is called "Arb and Hope". You place a qualifying bet for no loss, or a small loss, and simply hope the desired outcome happens. Obviously, where you can place the bet and make no loss at all it's completely risk free. You're risking nothing for a potential £100 payout.

However, it's not always possible to find matches that result in no qualifying loss. On the above example, Ladbrokes were offering the Correct Score of 1-1 at odds of 6.5, and the closest match was with Smarkets at 7.2. With a £100 stake, this would result in a fairly high £9.72 loss. However, that bet was still incredibly good value, and here's why.

In that particular example, you're risking £9.72 for a chance to win £100 (although, really £90.28 in reality after the loss). So you're risking £9.72 for a chance to win £90.28. Italy were at odds of 2.5, which suggests a 40% chance of winning the game ((1 / 2.5) * 100 = 40). Italy have a 40% chance of winning the game, that means you have a 40% chance of winning £90.28 and a 60% chance of losing £9.72. The average expected value of this bet is £30.27. We can work this out like so:

**(Outcome 1 * Probability) - (Outcome 2 * Probability) = EV.**

So with that formula, Outcome 1 is us winning £90.28 and has a 40% chance. Outcome 2 is us losing £9.72 and has a 60% chance.

**(£90.28 * 0.4) - (£9.72 * 0.6) = £30.27.**

An easier way to work this out is to look at the odds for the team on the betting exchange, and figure out the total value of the refund. E.G, if you get a £50 free bet, we can safely assume this is worth around £40 cash, because a free bet usually returns about 80% of it's value in profit. You then divide that £40 by the actual lay odds of the team. This gives you the actual cash value of the refund.

E.G, for a £100 free bet, the value is roughly £80. If we do £80 divided by 2.5, that gives us an actual cash value of £32.

## In Summary

To sum up; it's good to know how much each bonus you attempt is really worth. If you have a small bank and you can't handle any losses, then just stick to the risk free offers (there are TONNES of them). However, once you get to the stage where you can handle some variance, you should attempt any and every offer with a +EV, regardless of whether it's risk free.