Edit [1/19/24]: for those interested in using OddsJam or other software to find arbitrage opportunities (as opposed to maximizing signup bonus EV) on US sportsbooks, it looks like there is considerably more exchange risk now than there was two years ago.

I don't know how likely a sportsbook is to refuse to pay out a winning bet where the odds were an "obvious error", but I would advise against placing big bets on long odds arbitrage opportunities right now (or at least until you have successfully gotten paid out on similar smaller bets from the same sportsbook). 

This post was written in January 2022, and any claims about $EV/hour reflected the state of online US sportsbooks at the time of writing. Opportunities in 2024 are likely considerably less lucrative.

Anyone physically located in one of twelve US states currently has a unique opportunity to earn roughly $500/hour for up to 17 hours by taking advantage of new user promotions at online sports betting sites. In this post I'll list the qualifiers to participate, then explain the process and math that allows for this opportunity, and finish with my personal experience with this process. 

I am sharing this in good faith that EAs who participate will donate whatever they earn beyond a reasonable value of their time to effective causes. This opportunity is unlikely to exist in two years as I suspect a critical mass of people will utilize this process and sports betting sites will modify their new user bonuses. For this reason, I ask that readers please not publicize this opportunity to the general public before the EAs who want to participate have gotten a chance to. 

If this option of earning to give can have more impact than your alternatives, I encourage you to give this post a read despite its length. I am not affiliated with the software recommended in this post. And as a hook and anecdotal success story: I traveled to Colorado with two friends earlier this month and the three of us collectively made over $50,000 across 106 bets in five days through this process (though our expected returns were roughly half that.)

If you have questions or ideas about how to use this concept to do good, I'd love to chat! My Calendly -  calendly.com/sam-anschell. 

A Summary of the Opportunity

In 2018 the US supreme court ruled that states could permit legal online sports betting at their own discretion. Since then, sports betting operators (such as DraftKings and Fanduel) have been racing one another for share of the US sports betting market. 

In an effort to build brand loyalty and recognition, operators (also called sports books) are offering generous new user bonuses. When a user opts in to one of these bonuses, the operator loses money on a bettor's first wager (using the bonus) but recoups its loss from bettors who choose to continue betting after the bonus has been used. If a bettor places exactly one bet with every operator that offers a profitable new user bonus, the bettor can make roughly $500/hour. The more operators you have to bet with, the more hours you can spend churning through bonuses at that high hourly rate. 

The risk of loss from bad luck can be combatted in two ways. First, by placing enough unique and uncorrelated bets, the law of averages will allow your actual results to revert toward your expected results. Second, you can bet on both sides of the same game using two different sports books so that the result of the game is meaningless to your bottom line.

Since 2018, 20 states have approved gaming licenses for sports betting operators and twelve states have approved licenses for more than five operators (with fewer than five operators, your opportunity is limited.) In descending order of the number of licensed operators, the list of states with at least five legal online sports betting sites is as follows: New Jersey, Colorado, Pennsylvania, Michigan, Indiana, Virginia, Iowa, Tennessee, Arizona, Illinois, West Virginia, New York.

You must be physically located in one of these states to participate - using a VPN to bypass the operators' geolocation barrier is illegal. However, you do not need to live in these states (I am a Washington state resident who visited Colorado just to participate). If you do travel to a state to participate, make sure you'll be there for at least six days (bonus funds can take up to 72 hours to post, and your withdrawals may be delayed if the operator requests additional verification.)

Finally, operators set their betting "lines" (the odds assigned to a bet-able event) independently. Because of this, bettors can seek out the best bet a sports book has to offer relative to other sports books' odds using OddsJam, a tool that compares odds between sports books in real time. OddsJam allows a bettor to get the best of both worlds - unlocking a profitable new user bonus while making a bet that is neutral or positive expected value (EV) in its own right. 

Qualifiers to Participate

1. Itemizing Your Taxes 
   This process involves winning and losing many bets, and unless you itemize your taxes you will not be able to write off losses against wins. Without the ability to offset losses against wins, your tax burden may offset all winnings and then some. Luckily, charitable donors also benefits from itemizing so there are natural synergies for effective altruists!
    
2. Being Located in (Though Not Necessarily a Resident of) New Jersey, Colorado, Pennsylvania, Michigan, Indiana, Virginia, Iowa, Tennessee, Arizona, Illinois, West Virginia, or New York
   Always use your real address, phone number, and email address. Using fake information will look like fraud and you will have a hard time cashing out. If you bet with a group of people in the same location, be sure to use cell phone data rather than shared wifi since many sports books will only pay one promotional bonus per internet IP.
    
3. Having at Least $10,000 Liquid or Liquefiable for a Low Tax Penalty
   This process involves placing numerous bets, usually for either $500 or $1,000. The total amount of money needed to make the most of this opportunity depends on what state you're in (i.e how many operators you can bet through) and whether you want to hedge bets fully, partially, or not at all. States like NJ and CO require as much as $13,900 to make all bets unhedged, whereas NY only requires about $6,000.
   
   In my experience, the best way to fund accounts is by using PayPal. Most banks/debit cards have low monthly limits for point of sale transactions (how online transfers to sports books are coded). Certain banks won't allow transactions to sports books altogether for fear of underaged gambling or fraud. Many sports books do not accept credit cards, and those that do code the purchase as a cash advance. If a sports book doesn't accept PayPal, the next best method is an ACH bank transfer.  
    
4. Having ID (Drivers License or Passport) and Proof of Residence (Bank Statement or Utility Bill)
   To verify your identity when depositing and withdrawing money, sports books will ask you to upload these documents. They may also ask for a picture of you holding your photo ID so it is important that you have it with you.
    
5. Having No History with Problem Gambling, Lack of Impulse Control, or Moral Reservations about Placing Sports Bets
    
6. *Edit* Financial and Emotional Stability in the Event of a Net Loss
   Like with any gambling, +EV or -EV, you should only play with money you can afford to lose. Especially for EAs betting from states with few licensed sports books for whom the law of averages least applies, making unhedged bets carries a real risk of loss. 
   
   As a frame of reference: If you were to make all bets on +400 (4-1) odds and you only had the ability to bet on one site that offered a risk-free first bet (meaning you earned site credit that you had to wager if your first bet lost), your odds of losing money overall would be 64%. If you were able to bet on three sites with this promo, all for equal amounts of money, your chance of loss would be 26.2%. 
   
   If you have $5,000 to your name that you need for essentials/an emergency fund, it would be crazy to risk $3,000 on something that returns $0 over a quarter of the time. You can use a binomial distribution calculator to estimate your risk of ruin and either hedge your bets or choose bets with shorter odds to help control your risk to a level you're comfortable with
   
   Big thank you to Vivian.LwD for emphasizing this so that readers recognize the financial risk involved. This is not free money unless you hedge, and you're only >95% likely to net gain betting on long odds when you can use ~15 or more sports books . 
    

The Process and the Math

There are two main promotional categories that sports books offer: A Risk-Free First Bet, and a Deposit Match. To find a list of all operators offering worthwhile new user bonuses in your state, check out American Gaming's interactive map and click on the online/mobile tab after selecting your state.

Risk-Free First Bet

For this offer type, if a bettor loses the first bet they make on the sports book, they will be given site credit equal to their bet amount. The site credit cannot be withdrawn, it must be used to place a bet. Typically the site credit does not return the stake, only the winnings of a bet it is used to place. If the bettor wins their first bet on a site, they are not given site credit.

With this offer type, it is in the bettor's interest to make bets with long odds (bets with a low likelihood to win, but a high payoff if they do win.) The reason for this is that a bettor wants to lose her first bet as often as possible without sacrificing EV in order to have a high chance of unlocking the free bet. She should also make her free bets with long odds because her EV is actually higher the longer of odds she bets (because free bets do not return the stake).

Here is a mathematical comparison of the EV of a free bet that does not return its stake made with even odds vs long odds: 

A $100 free bet at +100 (1-1 odds) has a 50% chance of returning $100 and a 50% of returning $0, or an EV of $50. A $100 free bet at +400 (4-1 odds) has a 20% chance of returning $400 and an 80% chance of returning $0, or an EV of $80.

A $100 first real-money bet at +100 has a 50% chance of returning $200, and a 50% chance of returning $0 but giving a $100 free bet which, as shown above, has an EV of $80 if used on an event with +400 odds. This results in an overall EV of $200(.5) + $80EV(.5) = $140. 

Similarly however, a $100 first real-money bet at +400 has a 20% chance of returning $500, and an 80% chance of returning $0 but giving a $100 free bet which has an EV of $80 if used on an event with +400 odds. So the overall EV of placing your first $100 real-money bet at +400 odds is $500(.2) + $80EV(.8) = $164.

This assumes that all bets are being placed at "fair odds" (that is to say, a bet at +100 actually is going to happen 50% of the time.) Usually the odds that sports books give you are 10% below fair, however OddsJam provides betting opportunities that are very close to fair, and placing a bet through this promotion would be profitable even if sports books made 10% on each of the two bets. 

With risk-free first bets, you want to avoid bets that push. Say for example you can bet on a hockey team to win by more than two goals (puck line -2 ), or you can bet on the same hockey team to win by more than 1.5 goals (puck line -1.5).  If you bet on the team to win by more than two goals, your bet will push when the team wins by exactly two goals (meaning that you'll get your money back, but you don't win anything and you relinquish the opportunity to earn a free bet). If you bet on the team to win by more than 1.5 goals, your bet never pushes and you maximize EV by allowing all outcomes to either win money or unlock a free bet. It's ok to allow pushes on bets made with site credit, you'll just get your site credit back if the bet pushes.

There are two favorable variations of the risk-free first bet: The risk-free first bet, win or lose, (as offered on Caesars and BetFred) in which case your first bet should actually be made on short odds to reduce variance and tax liability. Or a risk-free first bet where the site credit returns the stake (as offered on Barstool and Fanduel) in which case your free bet should be made on short odds for the same reasons.

Deposit Match

A deposit match is a promotion where a sports book gives you site credit just for depositing money. These sports books require that you bet both the money you deposited and the bonus funds before you are allowed to withdraw the bonus funds, but this is a very easy type of bonus to profit from. You simply bet the real money and bonus funds once, then withdraw after.

The crucial detail to look out for in deposit match promotions is the rollover requirement. A rollover requirement is the multiples of your deposit you must bet before you can withdraw the bonus funds. Certain sports books like Draftkings and TheScore have 20x rollover requirements, rendering the promotion to be a fairly useless "get 5% cash back on bets" rather than "here's a bunch of free money." Any sports books with 1x rollover requirements are very profitable, and even sports books with 2x rollover requirements like PlayUp are well worth doing. 

Certain sites give you bonus funds in free bets that don't return the stake (like MaximBet and PlayMaverick). Like with site credit earned through risk-free first bet promotions, that credit should be used on events with long odds. Other sites give you credit that does return the stake (like BetRivers, and TVG). Credits of this type should be used on events with shorter odds to reduce variance and lower tax liability. 

No matter what the promotion on offer is, be sure to read the terms and conditions and always deposit the maximum that the bonus allows. Certain sports books won't let you bet bonus funds at odds shorter than -200 (PlayUp) or longer than +300 (Bally Bet). Other sports books require that you opt in through the promotions page rather than when you're creating your account (Foxbet). And while they may not say so in their terms, some sports books don't let you bet your entire deposit at once unless you make very popular bets, such as a team winning rather than a certain player scoring (Barstool, Twinspires, Bally Bet, Elite Sportsbook). 

If you attempt to place a bet and you get a message that only a fraction of your wager is approved, cancel your bet and look for a new one. For a risk-free first bet promo, only the first bet is "insured," so if you are limited to a $200 bet from your $1,000 attempt, the remaining $800 of your deposit bonus goes to waste. The customer support chat at any given sports book is a great way to resolve uncertainties.

Sports books reserve the right to suspend your account if you're "abusing bonuses," which is usually defined as betting both sides of the same game on the same sports book to unlock bonus funds, or betting both sides of the same game from two accounts in the same household. Your bonus funds may expire if you don't use them within a certain number of days, and you may not earn bonus funds if you don't place your first bet within a given time period after creating your account. It's usually a good idea to wait to open an account until you're confident you'll be able to place a bet within a week.

Hedging Your Bets

Hedging your bets using different sports books is always acceptable, since sports books do not see your activity on rival sites. To hedge bets made with long odds, you'll have to place a 3-5x larger bet on the other side of the game using a different sports book. Best practices for hedging your bets are to open up sports book accounts one at a time so that you don't need $50,000+ liquid to be placing hedged bets at every operator. Simply go through the process with one sports book, withdraw your funds, then use those funds to repeat the process at the next sports book.

OddJam's Arbitrage Calculator and Freeplay Calculator are great tools to learn how much to bet on the other side of bets made with long odds. Here is a mathematical example of how to hedge bets to convert these bonuses into cash risk-free:

Team A is playing team B in playoff football, there are no ties allowed so one team has to win. A $1,000 risk-free first bet placed on with real money at +400 odds on team A, and a $4,000 real money bet is placed on a different sports book at -400 odds on team B. $5,000 real money has been bet in total. 

If team A wins, the first bet returns $5,000 and the second bet is lost. If team B wins, the first bet is lost, but the bettor earns $1,000 in site credit and the second bet returns $5,000. In either outcome the bettor breaks even, but the bettor has a high chance of unlocking the $1,000 free bet.

Now the bettor has a $1,000 free bet that does not return the stake. The bettor finds a different football game to bet on, say between team C and team D. A $1,000 free bet is placed on team C at +400 odds, and a $3,200 real money bet is placed on team D at -400 odds. $3,200 real money has been bet in total.

If team C wins, the first bet returns $4,000 and the second bet is lost. If team D wins, the first bet is lost and the second bet returns $4,000. In either outcome, the bettor profits $800, essentially "converting" the $1,000 free bet into $800 real money. 

How to Use OddsJam

I recommend signing up for the free trial of OddsJam's monthly Industry plan. Once you're signed up, you can find the best bets on each site through the +EV page, the Arbitrage page, and the Low Holds page. The more data you have on an event, the better. For example, if only BetMGM and FoxBet are providing odds for a game, it's difficult to tell what the fair odds should be. However, if 15 different sports books are all providing data for a game, you can more reliably assume that an outlier among the 15 is giving better or worse odds than they should.

For sports books that OddsJam doesn't list, you can manually compare odds by looking through upcoming games on OddsJam and comparing the market's odds to what you see on that sports book's betting app. Never bet on a hunch -- the sports market is debiased and everything is priced in -- bet exclusively using data.

OddsJam's YouTube channel is a great resource for learning the nuances of advantage sports betting (e.g., how to take advantage of other sports book promos beyond sign up bonuses, why market width is important, how to properly track your performance). 

My Experience

I have taken advantage of these promotions on two occasions. Two months ago I coached a friend in Michigan who chose to partially hedge his bets. With considerable luck he profited around $10,100 in about 13 hours of work. Earlier this month I took a trip to Colorado with two friends. The three of us collectively profited a bit over $50,300 in our 5 days in CO. We were completely unhedged (because our sample size was large) and we were also quite lucky. Still though, I'm confident enough in the proof of concept and math behind this venture to recommend EAs replicate this process.

My biggest takeaway from this process was to avoid sports books with bad software and small bonuses. For example, Betway offered a $250 risk free first bet. Getting money on and off their app was a nightmare, the EV of the promo is only $150ish, and their lines were very unfriendly so it took too long to find bets I was satisfied with. This should be a novel and enjoyable endeavor; I'd recommend skipping any sports books that frustrate you and deferring to customer support rather than guessing and stressing about unclear site rules.

I think that this could be a really fun way to get people into EA. The idea of betting on sports in a clever way is glamorous to the everyday person. You might frame this process as bringing down the house to battle the world's most pressing problems. If you give this a try, please let me know how it goes at sanschell@wesleyan.edu. It would be really valuable to learn more about people's experiences and how I can better optimize this guide.

If you'd like to continue advantage sports betting after grabbing the lowest hanging fruit of signup bonuses, you can continue to place +EV and arbitrage bets through OddsJam. The amount you can make depends on the size of your bankroll (i.e a $2,000 bet generates twice as much EV as a $1,000 bet.) You'll likely be limited by sports books within a couple of months (they'll restrict you to $5 per bet once they know you're a winning bettor,) but making smart bets is perfectly legal and you will always be able to withdraw your money, limited or otherwise.

Thank you for reading. This is my first post so I'm keen to read feedback and get more involved in the forum. With my share of the Colorado trip winnings I plan to donate to GiveWell's Maximum Impact Fund, unless a donation matching program offers a high-leverage opportunity and doesn't list GiveWell as an option.