Jan 7, 2019
Jan 7, 2019

Cash Out betting: What should bettors know about Cash Out?

What is Cash Out?

How is Cash Out calculated?

Alternatives to Cash Out

When is Cash Out useful?

Cash Out betting: What should bettors know about Cash Out?

The option to Cash Out a bet has become an increasingly popular offering from online bookmakers. What is Cash Out? Is the Cash Out option ever profitable? How is Cash Out calculated? Read on to find out?

What is Cash Out?

Cash Out is a facility provided by some bookmakers which allows a bettor to immediately take a guaranteed amount of money in exchange for closing their bet before it is settled.

It is a popular option among recreational bettors as it eliminates the chance a bet will return nothing, however it is usually not the optimal option.

How is Cash Out calculated?

Cash Out is calculated by using the potential winnings from a bet alongside the current odds you would receive if that bet was placed now.

For example if you have a €10 bet on Barcelona to win a match at odds of 4.0 and they are leading at halftime the new odds on them to win the game may be 2.0.

Ignoring the fact the bookmaker’s margin has been added to the odds already, a “fair” Cash Out value can be calculated by dividing the potential winnings of the bet by the current odds available:

“Fair” Cash Out value=potential winnings/current odds

For the Barcelona example “fair” Cash Out value would be:


Of course this is not usually the offer made by the bookmaker. In addition to initially adding their margin to the current odds a bookmaker will often add an additional margin to the offer.

For example, in the Barcelona match discussed above the “fair” Cash Out value (including the bookmaker’s original margin) at halftime is €20. However, the bookmaker is likely to take an additional percentage from this offer.

The Cash Out value will likely be €19 or less. In the long run this will have a negative impact on a bettor’s profitability.

Cash Out bet example

This is a real example of a Cash Out offer available at one of the leading bookmakers.

The initial bet is a €100 stake on Liverpool to win the Premier League at 6.00 odds. This bet returns €600 if Liverpool win the Premier League title.

Midway through the season a Cash Out offer is available at €150 for this bet. The current odds on Liverpool to win the league with the same bookmaker are 3.25.

“Fair” value for this Cash Out is:

€600 (potential winnings) /3.25 (current odds) = €184.61

By taking the €50 profit from the available Cash Out offer the bettor is missing out on an additional €34.61 of profit.

Alternatives to Cash Out: Hedging

In the long run it is usually better to allow bets to run their course and avoid paying additional margins, fees or commissions.

However, in one-off scenarios it may make sense to secure profits or prevent losses early. Even in these cases it is usually better to find an alternative to cashing out with the same bookmaker.

In the example above the bettor has bet on Liverpool to win the league at 6.00 and the odds have fallen as the Merseyside club are now more likely to lift the trophy. One way to secure a profit instead of taking the Cash Out offer is to place a bet on the other side of the market otherwise known as “hedging”.

At the time of writing "Liverpool to win the league no" can be backed on Pinnacle at 1.370.

By using Pinnacle’s arbitrage calculator to find the amount that should be hedged to guarantee a profit we can see that a bet of €437.96 on Liverpool not to win the Premier League would secure a guaranteed profit of €62.04, €12.04 higher than the Cash Out offer.

When is Cash Out useful?

Despite its flaws Cash Out is not useless in every situation. In what situations can Cash Out be a useful option for bettors?

Mitigating opportunity cost

The opportunity cost of having money tied up in long running bets and hedges can be high. In the hedging example above €537.96 would be locked up in open bets until May which has the potential to be problematic. This is of course less of an issue for shorter term bets.

Irrationality and rare scenarios

Consistently profiting from betting is a long run game involving finding a way to beat the odds and then placing enough bets to ensure that edge is fully realised (which can take longer than most bettors are aware).

However, there are situations where rational thinking becomes less of a factor, such as when a bettor is dealing with larger than usual sums of money.

For example if a bettor has placed €100 on a bet at odds of 5000.00 and the current odds have fallen to 2.00 the "fair" Cash Out value of that bet is €250000. The Cash Out offer may only be €200000. This means the bettor would win more long term by seeing his bet through to settlement.

However, such a bet would only reach this stage one in 2500 times. The bettor may never be in this situation again, let alone find himself in the same position enough times for randomness to even out.

The Cash Out offer is higher than market price

Very rarely the Cash Out value of a bet is higher than the odds offered by other bookmakers. This suggests the Cash Out offer may be above fair value and it is optimal to take the Cash Out amount offered. The Cash Out amount could then be re-bet at the other bookmaker for a higher return.

Why winners cannot Cash Out long-term

Frequently utilising Cash Out for profit or consistently finding positive expected value bets will cause bettors to be banned or limited from many bookmakers.

Pinnacle offer a unique Winners Welcome policy which allows bettors to win long term.

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