Content warning: gambling is addictive and generally loses money. Please don't make any bets with negative expected value.

tl;dr: New York State recently legalized online sports gambling, so casinos are offering large incentives for signing up on their websites. I got about $4,400 out of this (you can probably do better; see below) and will be donating it to GiveWell. You must be located in New York or another eligible state while signing up and making the bets.

How to exploit this

There are various casinos, sportsbooks, and other gambling establishments located in New York State. Online sports gambling was legalized there in January 2022, so they are giving out introductory offers where they will match your deposits or give you free bets when you sign up. Basically, you can open an account on each site, deposit the minimum amount required to qualify for the promotion, make one bet, and then withdraw your initial deposit plus the bonus and any winnings from the bet. (I strongly recommend only betting the bonus amounts and not your own deposited money.) The expected value from doing these five bonuses in this screenshot is $4,800, and there are probably others I don't know about. I recently spent a day in NYC and a friend insisted I sign up for two of them while I was there, which took about 20 minutes each.

Source: https://www.nj.com/betting/online-sports-betting/new-york-sports-betting-sites.html

FAQ

Q: Isn't gambling immoral?

A: Not in this case. These sites are offering these bonuses to try to get people addicted to gambling, and will probably earn a large profit despite giving away lots of money upfront. I think it would be unethical not to do this, because it reduces their profits and redirects the money to altruistic causes.

Q: Does this entail any financial risk?

A: No. As long as you only bet the bonus money and don't gamble your own funds, there's no way to end up with less than you started. I recommend making one bet on each site, then withdrawing your money and closing your accounts immediately after each bet ends.

Q: What's the catch?

A: You'll need to temporarily deposit around $2,000 but will get it back once the bets resolve. It takes about half an hour of setup and maybe a day of waiting. They might ask for a photocopy of your government-issued identification. You must be located in New York or a few other eligible US states while placing these bets. You must be at least 21 years old.

Q: Online gambling is illegal where I live. Can I still do this?

A: Yes. I did this while I was transiting through New York yesterday. Hat tip to Daniel Gold and Michael Bogaty from NYC EA, who are really smart, won't shut up about sports, and insisted I do it. The minimum time commitment if you're out of state would be to go to New York for a few hours, sign up and wait for your deposits to clear, place bets, leave, and cash out when the bets resolve.

Q: What outcomes should I bet on?

A: Depends on the type of bonus and your level of risk aversion. For sites that do deposit matching, I recommend betting on a very likely outcome, which will only pay out a little extra if you win but guarantees you can cash out the bonus and then withdraw the money. For sites that offer a free bet as the incentive, I suggest betting an unlikely outcome because this maximizes your expected payout (but if you are very risk-averse, you can get a higher chance of some winnings at the cost of lower EV by betting on a likely outcome). You can improve this by hedging with friends and each betting on different, mutually exclusive, unlikely outcomes, which will both maximize EV and guarantee one of you wins.

Q: I don't follow sports at all and don't know which teams are good.

A: Neither do I. Just go on fivethirtyeight and look at their predicted outcomes for some upcoming sports games.

Q: I'm bad at math and/or don't know how to convert between odds and probability.

A: That's fine, use an odds calculator.

Q: I have a different question.

A: Great, leave it in the comments and I'll add the answer here.

Update

Sam Anschell has written a more detailed guide about this same opportunity. Please go check out the post! EA Fundraising Through Advantage Sports Betting

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45 comments, sorted by Click to highlight new comments since: Today at 11:50 AM
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Should we be concerned at all about Casinos refusing to release funds because of 'wagering requirements' (also see HERE or something like this? Are we sure these offers don't come with hidden wagering requirements or other catches?

Also these tips seem helpful to not getting your account shut down.

Yes, you should be, so it's important to read the fine print. Part of the reason the Caesars' promo is so lucrative right now is that it's play-through requirement is 1x, whereas typical requirements are more like 25x. You can hedge your bets on other books to meet the play-though requirement risk-free. 

My understanding is that wagering requirements that severely reduce the EV of promotional offers (but still keeping it positive in some cases) are standard in the industry. That said, maybe the situation in NY is exceptional now.

To my knowledge, you are generally right. The situation is exceptional this month because the market was just legalized and these sites are trying to grab market share while it's brand new.

The Fanduel one isn't actually risk free (though still +EV).  The promotion is that if you lose your first bet up to $1000, they give you your wager amount back in site credit, which can't be directly withdrawn (and if you win you just get your bet winnings).

The BetMGM one has the same $1000 promotion as Fanduel (actually worse, since you receive five free bets at 20% of your initial bet amount rather than a single one).  Can you update your post to reflect this?

Oh, good catch, I will edit that. What is the EV from those offers, then? It seems to still be nearly +$1000 and nearly risk-free with the following approach: bet $1000 on something very unlikely (EV of the payout will be $1000, but as something like a 1% chance of $100000). If you lose, bet the $1000 of site credit on something extremely likely, so you end up with $1000 cash. Then withdraw that.

For BetMGM, repeat the same approach but do 5x very safe bets of $200 with the site credits.

That still works for $1000 expected profit, right?

One thing to note is that some books have different definitions of "free bets" or "site credit." If you place a $100 free bet on a +100 market on FanDuel it pays out $200 (your $100 stake, and your $100 winnings). But on BetMGM a $100 free bet on a +100 market pays out $100, because you don't get your free bet stake back. 

This means that on sites like BetMGM or DraftKings (and I believe some others), "free bets" or "site credit" are not as good as cash. They're value in cash typically 70-80% of the face value of the credit because you can convert them into that amount of cash. See good markets for free-bet conversion here

In this case BetMGM seems to be negative EV. In OP's example above, if the $1000 of site credit is only worth $800 or so, you have 1% chance of +$1000 and 99% of -$200.

Edit: bad arithmetic on my part here, it should be 1% of +$99000, for total EV +$792.

It is not negative EV. You are either misunderstanding the offer or someone's example.

Perhaps I'm misunderstanding your example above or @martin_glusker's comment about the free bets. As I understand Martin's comment, you don't get your free bet stake back, so if you bet on something extremely likely you'll just get the small winnings but not the notional value of your wager. For instance, if you bet on something at -1000 with $1000 of free bet, you're likely to win, but you'd only get $100 of winnings, not $1000 of stake plus $100 of winnings.

I can see how bets could be constructed that would recover more value using martin's link, but as shown there they mostly top out around 80% of the value.

Thus in your example above

If you lose, bet the $1000 of site credit on something extremely likely, so you end up with $1000 cash.

in this case you'd end up with around $800 of cash (by careful construction of bets; much less if you just bet one something likely with low payout) in the much more likely losing case.

I can see how the offer could be used in a way that is positive EV (e.g. bet opposite sides with another free bet offer so you win on one side and get the free bet credit on the losing side), but I think the example you posed is not positive.

I think I understand your confusion @shrek. There are two stages: the initial risk-free bet and then then free bet (if necessary). 

--

1st bet, $1000 on +100 odds (50% implied probability)

Win the bet: Payout is $2000 ($1000 stake, $1000 winnings)

Lose the bet: Payout is $0 cash, $1000 free bet

--

2nd bet (only necessary if lost 1st bet), $1000 free bet on +100 odds

Win: Payout is $1000 cash

Lose: Payout is $0

--

The EV calculation is then: 0.5  x 2000 + 0.5 x ((0.5 x 1000) + (0.5 x 0)) = $1250

Thus we see that it is positive EV. 

This can get much fancier, and you can optimize it for higher EV, lower risk, etc, but this shows the basic intuition. 

Yep, that makes sense, thank you. I agree with your calculation and the positive EV result in this example, and I agree you could construct other bets with different EV / risk profiles.

As @KaseyShibayama originally noted above, this isn't risk-free, so these "risk-free bet" offers differ from the deposit bonuses OP describes, where one gets "free bet" money immediately and can keep the original deposit money to withdraw without risking any of it.

I still think OP's example here isn't quite right, because you can't easily convert the $1000 of site credit to $1000 of cash.

Edit: I see now the error in my calculation; OP's example is indeed correct. Any positive value on the site credit drives the total EV positive (assuming the original bet is 0 EV).

I agree with that analysis (and someone risk-neutral should bet the 2nd game on whatever game has the lowest vig).

Worth considering taxes, though.

Betting the Fanduel promo alone carries risk, you're right. But you can de-risk it by taking the opposite side of the market and hedging your bet on a different, so that the worst case is 0 loss and best case is a free $1000 bet. You can then arbitrage that $1000 free bet again for a roughly $1000 gain (see this oddsjam link for potential markets to convert free bet into cash, basically markets with low to no vig).

You can actually go further than that by optimally sizing your hedge bet such that your payout is the same regardless of which side of the bet wins. If you're interested I can copy my optimal hedge bet sizing excel calculator into sheets (and clean it up so that it's understandable to other people, lol) and share it with you. 

Why is it optimal to size the hedge bet such that you get the same payout for either outcome? Why does that have greater EV than if the bets are skewed in either direction?

EV is the same, you're just reducing volatility (risk is maybe a better word?) by guaranteeing the outcome either way. A downside is that the hedge does increase the necessary bankroll. That said EV does vary with how long the odds are. 

EV is the same, you're just reducing volatility (risk is maybe a better word?) by guaranteeing the outcome either way.

Oh, I see. Yes, this is what I thought - the EV doesn't change but you can reduce your exposure to particular outcomes.

Like Martin and Rob, I also thought of EA when I found this opportunity. Here is the full guide I wrote on how to make the most out of sign up bonuses (two friends and I were able to make over $50,000 in five days) https://forum.effectivealtruism.org/posts/29EZBsbLovTgu6C3B/ea-fundraising-through-advantage-sports-betting-a-guide

 

I know this post was written about NY bonuses, but there are 11 states with better opportunities for this than NYC. In order of most new user bonus dollars to fewest, here are the twelve states with at least five licensed online sports books:

New Jersey, Colorado, Pennsylvania, Michigan, Indiana, Virginia, Iowa, Tennessee, Arizona, Illinois, West Virginia, New York.

 

To Kasey's point, taxes are a HUGE consideration when considering whether this is worth doing. If you take the standard deduction, you will not be able to deduct losses against wins and you're forced into a strategy that attempts to lose very few bets (which is actually opposite of the strategy that maximizes EV of promos like Twinspires' and BetMGM's.)

 

Also: most sites do not let you bet bonus funds before betting your deposit. The only way to eliminate risk is by betting both sides of the same game.  Most sites have a stipulation that you must bet odds longer than -200 to claim bonus funds, so you cannot be more than a 67% favorite to qualify for this promo by betting one side. I think it is reckless for someone who only has $2,000 to their name be betting $1,000 via these promos, though the Caesars promo does give the bettor very favorable terms.

 

It's easy to see this as completely free money both due to survivorship bias and the availability heuristic. Rob ran above EV, so did I, and so did the friend I coached through this process in Michigan. There is risk involved, particularly with such a small sample of books in NY. We should be careful about how we advise EAs to risk their money, as trust in the community is worth much more than a few thousand dollars. 

Lmao, I was thinking about writing this post, but then didn't. I guess I shouldn't be surprised that another EA wrote it up haha. Unilateralist's curse in action! 

The Caesars promo in NY right now is particularly lucrative. You can also make a good amount of money traveling to legal gambling states and signing up for new accounts in each state. It doesn't work for a lot of books, but for BetMGM you can make a new account and get a $1000 risk-free bet (EV is 600-800 profit) for each state you visit. 

Also, I think the optimal way to capture EV while minimizing volatility is to arbitrage the bets by betting both sides of a market on different books. I highly recommend oddsjam.com for finding arbitrage opportunities (you need to pay for that) or low-hold bets, basically worse arbitrage because you have 0% profit or a very small guaranteed loss. Oddsjam lists those for free and has a calculator for converting free bets into cash.

Another secondary benefit of people like us (presuming we are not problem gamblers) doing this:

  1. Online Casinos are probably using these to hook problem gamblers

  2. They have a limited budget for these offers and will only do it if it seems likely to be generating a profit

  3. By 'exhausting' these offers and making it seem unprofitable to the casinos we may be preventing problem gamblers from getting hooked/drawn in again.

(Maybe Robirahmanhad this point in mind already)

Yes, this was something I was thinking earlier. I was in an ideal position to take advantage of the offers without getting hooked because: I hate sports, have good background knowledge of probability, don't like gambling, and don't live in NY and thus couldn't make any more bets even if I wanted to. If I'm the one taking these offers rather than a NY resident who might end up with a gambling problem, that's a very good social outcome in addition to the donation directed to charity.

Hi!  Separately from this current arbitrage opportunity, does the new NY law represent any kind of meaningful advance for the legality of prediction markets?

Also, if there are any rationalist sports fans out there with hot takes (or perhaps cold ones) on how I should bet, I'd be open to taking your advice.  After all, if I sign up for this, I will have to end up placing some random sports bets one way or another.  Might as well try to grab some of that mythical rationalist alpha while I'm at it.

OP, could you elaborate on how exactly you ended up with $4400? It would be interesting to know the bets / payouts involved, as well as how much of your own money you had to temporarily deposit (you say $2000, but it seems like for each bonus in the screenshot it's necessary to deposit an amount roughly equal to the bonus amount).

Also, you say six bonuses and $5800, but I only count five and $4800 in the screenshot.

Yeah, here are some examples. I was in NYC from 5pm Saturday to 7pm Sunday.

I signed up for the BetRivers match promo. They asked me to verify my identity by uploading a photocopy of my driver's license (I used my passport, which was accepted). Upon depositing $250, they gave me $250 in matching funds. The soonest upcoming sports game was the Kansas City Chiefs vs the Buffalo Bills, which was at -110 moneyline odds (meaning the Chiefs were 55% favorites according to the sportsbook). FiveThirtyEight had them as 65% favored, so I bet on the Chiefs. They won, so I got a $200 payout. I withdrew $700 (my original $250, the matching $250, and the bet payout). If the Chiefs had lost, I would've withdrawn my original $250 and quit. Definitely don't gamble your own money, that's how they get you.

I also used the Caesars promo to bet on the San Francisco 49ers vs Green Bay Packers game, that the total score would be under 47.5 and the 49ers would lose by less than 3.5 points. This required a $1500 deposit and no document verification. The final score was SF 13-10 GB so I won $3967.

The total amount of money I had to temporarily deposit for these two was $1750. As you say, it's usually a deposit equal to the bonus amount. You can do them all serially if you only have $1500, or simultaneously if you have $6000 to spare and want to finish the process quickly. And you are right, I only screenshotted five; I'll edit that.

Thank you, those examples make it much clearer.

Don’t misread the Caesars one. It seems like you need to deposit the full $1500 on your first deposit to get the max free bet.

Yes, that's correct. Optimal usage of that offer is to deposit $1,500, use the free bet on an unlikely event that resolves very soon, and then withdraw your deposit quickly, plus winnings if any.

FYI: It can be rather hard to make deposits -- these sites don't take many forms of payment, it seems, and many banks refuse it.

Also, in case you were considering using an IP blocker to access another state (and I'm not encouraging it) I don't think this will work.

Correct. They might ban you and confiscate your money if you use a VPN to obfuscate your location.

It appears that the tax situation in the U.S. is extremely disadvantageous for sports betting.  Total winnings (not net) are taxed as income and losses can only be deducted if you itemize.

For example, if you win $800 and then lose $1000, you are stuck paying taxes on $800, even though you have no net profit (if you don't itemize your deduction).  The tax rate for gambling winnings appears to be 24%, though I'm not sure if this is correct.  So for people who are trying the approach "bet $1000 on something very unlikely... if you lose, bet the $1000 of site credit on something extremely likely", keep in mind that the modal outcome using this strategy is a loss of ~$240 when you consider taxes.  

Great point Kasey, and the tax rate for gambling winnings is actually just your marginal tax rate, but sportsbooks will withhold 24% for people who win 30x their stake on a given bet. This is a good resource for taxes in sports betting.

Thanks for sharing this!

You have to be 21 (hope these or similar offers are still available when I turn 21!); I might add that to your tl;dr.

Good point, thanks! I added a note in the FAQ.

I'm on a 'bonus trip' now (also visiting Dad in upstate New York). Will keep you abreast of how it goes in my shortform here.

I hope others might benefit from my experience and help us learn to do this better.

You must be located in New York or another eligible state while signing up and making the bets.
 

 

Just to confirm -- do these bets require New York residency, or just being physically present in New York? What forms of identification are requested -- does it have to be a New York state ID (e.g. driver's license)? 

It's physical presence only. It does ask for your address for ID verification purposes.  I think ID requirements vary from person to person, so I didn't have to submit pictures of my ID, but I have some friends who had to. Doesn't have to be NY ID though.

it sounds like physical presence only, from his post. He only used a passport.

Physical presence is enough. They have geolocation applets on their site and prohibit you from placing bets unless you are in an eligible location. I live in Massachusetts but went to NYC for about a day. I used my passport for identification because I didn't bring my driving license.

Just curious, how was the expected value calculated? Wouldn’t this depend on the bets you make?

I used the maximum EV you can get without risking any of your own money. If you want to have less exposure to outcomes, you can choose lower-EV bets with higher likelihood of payouts, but if you're doing this for charity, it doesn't really make sense to do that.

For example, suppose you have a $1000 free bet. It doesn't pay out the principal if you win, just returns payouts for whatever you bet on. You can bet on an outcome that is 91% likely, in which case you have a 91% chance of winning $100 and a 9% chance of winning nothing, for an EV of $91. Or you could bet on an outcome that is 1% likely, in which case you have a 1% chance of winning $100000 and a 99% chance of winning nothing, for an EV of $1000. If you're donating your winnings to charity regardless of the outcome, you should do the riskier bet, but if you have sharply declining marginal utility of money, you might want the safer bet with lower average payout.

Any inkling how long these offers will last?

I'd guess a couple more weeks. The Caesars one was just reduced from $3000 to $1500. They were most generous right at the beginning of legal online betting but are decreasing the incentives as everyone who will end up signing up has done so.

Re: this -

  • Q: Does this entail any financial risk?
  • A: No. As long as you only bet the bonus money and don't gamble your own funds, there's no way to end up with less than you started. I recommend making one bet on each site, then withdrawing your money and closing your accounts immediately after each bet ends.

I don't think this is accurate because most of these free bet offers require that you gamble your own funds to unlock the bonus (in VA, all but one require this - BetMGM, Barstool, and Unibet), and none of these sportsbooks lets you withdraw the bonus.  There is a long discussion coming to this conclusion in KaseyShibayama's comment thread but I really think it's worth amending the actual post since I know there are EA's who have lost money on this.

[+][comment deleted]4mo 22