Cash Out – Should You Use It?

Almost all of the big bookmakers now offer a Cash Out option on in-play bets, but why was it introduced and is it worth using? You only have to go on any of the big bookmaker’s websites now to see Cash Out offers, with Ladbrokes, William Hill, Paddy Power, Coral, Bet Victor and many, many more offering you the ability to Cash Out your bet. The Cash Out option originally started on Betfair as a simple way for traders who had backed and layed selections to work out how to close out a position without having to calculate odds and stakes around it.

Other betting companies saw how popular the Cash Out option was on Betfair and began designing their own versions of it. The difference being that Betfair introduced their Cash Out option as a service tool to their customers rather than a way to make money off them, obviously the same cannot be said of the other online bookmakers.

So whilst bookmakers such as Ladbrokes are offering you the chance to close out your bet before it has concluded, they are not offering the same value for money as Betfair were.

The bookmakers operate what is called an “overround” and this is how they make money. Put simply, this means if there was an event with a 50/50 outcome, like the toss of a coin, they should offer you even money on heads or tails, but they do not.

Most bookmakers offer you odds of 10/11, or even sometimes 5/6 if they are particularly harsh with their odds. That means if you placed an infinite amount of bets with them, you would be guaranteed to lose money overall.

The overround is especially important in In-Play betting; in most events the overround stands at about 10%, sometimes up towards 20%, but during In-Play betting it can sometimes be as much as 50% in the bookies favour which will impact how much of a Cash Out offer they give you.

Offer Betfair Cashout
Fig.: Betfair Cashout offer

The Cash Out option sites such as Ladbrokes and William Hill is nothing like the one that Betfair will offer you. Betfair will give you the best possible deal that they can, whilst Ladbrokes and William Hill will offer you a deal that suits them.

Even though it may look like you are making a quick profit by cashing out, you are almost certainly getting a rough deal. The bookmakers would not offer this option unless they were backing themselves to make more money from it than the customer, so don’t be so quick to press the Cash Out button. You will almost certainly make more money if you work out the odds for yourself and go onto a betting exchange like Betfair and trade out the necessary amount to cover yourself.

Don’t be so quick to take the Cash Out option in the future as you are almost certainly being offered a deal which is very much in the favour of the bookmakers. Shop around and do your homework before you even consider pushing that button.