Bookmakers generally offer 2 distinct types of bonuses/incentives: deposit bonuses and free bets.
There’s a very important difference between the two and this influences the mathematics behind the scalping of each.
Deposit Bonuses
These bonuses take the form of extra money being added to your account balance. Of course, there are restrictions on withdrawing this money before conditions are met.
However, the point is that when you place a bet with this bonus money, it acts as though it were real money – the stake is deducted from your account and if the bet wins, you receive the full return of Stake + Winnings
Scalping A Deposit Bonus
Let’s consider a typical deposit bonus where you deposit £500 and receive a £100 bonus. Assuming that you started with a zero balance, your account balance will now show as £600
Of course, were you try to withdraw this £600 without fulfilling the bookmaker’s rollover requirements, you would forfeit the bonus and only receive a payout of the original £500 that you deposited.
A typical rollover requirement might be to bet 5 times the deposit + bonus. In this example, you would be required to make £3,000 in bets before you may withdraw the bonus money.
Clearly, these requirements create problems for normal punters and the bookmakers rely on the fact that the vast majority of their customers end up losing both their deposits and their bonuses way before they become eligible to withdraw.
However, for a trader, the rollover requirements present no obstacle. All you need to do is execute arbitrage trades with a yield of 0% or better and continue this either until you fulfill the rollover requirements or lose the entire balance at the bonus bookmaker, thereby transferring it to another bookmaker from which you may withdraw without penalty.
The mathematics behind this type of trade are EXACTLY the same as for a standard arbitrage trade.
Here’s an example:
Bookmaker 1: Deposit £500 | Bonus £100
Find an arb of 0% or better which involves Bookmaker 1
NFL: Carolina Hurricanes vs Tampa bay Buccaneers
Carolina Buccaneers:
11/10 @ Bookmaker 1
Tampa Bay Buccaneers
10/11 @ Bookmaker 2
This is a 0% trade.
Bet £600 @ Bookmaker 1 on Carolina at 11/10
Bet £660 @ Bookmaker 2 on Tampa at 10/11
Your total spend is £600 + £660 = £1260
If Carolina wins, you receive £600 + (£600 x 11/10) = £1260
This is a break-even situation and although you have not managed to scalp the bonus out at this stage, you have bet £600 towards your rollover requirements
If Tampa Bay wins, you receive £660 + (£660 x 10/11) = £1260
This is also a break-even situation but this time you’ve moved your initial deposit and bonus from your account at Bookmaker 1 to your account at Bookmaker 2 from which you may now withdraw it without any penalty.
The end result of this is that you have made a risk-free profit of £100
Free Bet Bonuses
These types of bonuses do not show up as extra funds on your account. They are ‘tokens’ which allow you to place a bet without coughing up the initial stake.
You can place this free bet on anything (within the terms of the bookmaker) and if it loses,, nothing happens to your account balance. If it wins, then you receive the winnings but you do not receive the initial stake.
You can scalp these free bet bonuses for a risk free profit, but your technique must take into account the fact that you will not receive the stake back.
To do this, find a bet at your bookmaker with high odds. Generally, the higher the odds, the better your end profit will be.
Next, lay the same bet on a betting exchange such as Betfair. Laying is the opposite to backing. The net result will be that you will have covered all possible outcomes (Team wins | Team does not win) and if you stake your bets correctly you’ll be left with a profit regardless of which bet wins. This technique is also known as ‘matched beting’
Here’s an example:
Bookmaker 1: £50 Free Bet
Bet £50 on Hewitt to win Wimbledon at 50/1
If Hewitt wins, you will receive £50 x 50 = £2500 but you will lose the bet at Betfair below so your total profit will be £2500 – betfair loss
Lay Hewitt on Betfair:
£35.00 @ 1/60
If Hewitt wins, you have to pay £35 x 60 = £2100
In this case, your total profit will be £2500 – £2100 = £400
If Hewitt loses, you will lose the free bet at Bookmaker 1 and win the lay-bet at Betfair. Your profit will be £35.00 minus your Betfair commission (usually 5%)
£35.00 – (5% of £35.00) = £33.25
You can alter the size of the lay bet to make the profits a little more even for both outcomes, if you wish. However, by biasing your stakes as shown above you stand to gain a RISK FREE windfall profit if Hewitt wins.