Risk-free bets have steadily become the promotional vehicle of choice among US online sportsbooks. Nearly all betting apps offer one as part of their signup package, and they’re making more frequent appearances in recurrent promotional calendars.
The allure of risk-free bets can be intoxicating. Sports betting is a risky business, so any attempt to circumvent risk must be a net positive, right? That may be true, but new bettors must be aware that risk-free bets aren’t actually devoid of risk.
In this guide, we will discuss their pros, pitfalls, and how to best utilize risk-free bets to build a bankroll.
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How Do Risk-Free Bets Work?
Risk-free bets are not guaranteed protection from losing; they’re more of a second lease on life.
They’re comprised of two stages. The first stage merely consists of placing a cash wager, much like a bettor might normally do.
The second stage is conditional and only triggers if bettors lose their initial wager. In this case, bettors receive a full refund, up to a designated amount, as either a free bet or site credit.
The obvious pitfall of risk-free bets is that bettors only benefit from the promotion if their first wager falls flat. Those who win receive their winnings but nothing more.
For example, imagine a new customer claims the Caesars Sportsbook bonus consisting of a risk-free first bet worth up to $5,000. The bettor has an eye on an NFL moneyline and bets $500 on a +150 line.
If the bet wins, the bettor receives the initial $500 stake back plus $750 in winnings for a total of $1,250. They do not receive one dime extra – it’s like the promotion never existed.
If the bet loses, the $500 Caesars Sportsbook subtracts the initial stake from the bettor’s cash balance. However, Caesars will gift the bettor a $500 free bet.
Caesars Sportsbook will then return any profits earned by the free bet as cash, which players can immediately withdraw or use to fund future bets.
What Is a Free Bet?
Free bets are bonuses awarded by sportsbooks that customers can use to place wagers on the house.
The terms and conditions attached to free bets vary, but there are some near-universal constants:
- Free bets that win do not return the initial stake, only the profits. For instance, if a bettor uses a $100 free bet on a -110 NFL point spread and wins, they only receive the profit margin. In this case, that amount is $90.91.
- Customers must use free bets in one shot. For example, they cannot spread a $50 free bet across five $10 wagers. However, some sportsbooks do allocate free bets in small increments.
- Sportsbooks often restrict bettors from using free bets on heavy favorites. Typically, bettors cannot use free bets on markets featuring odds of -200 or shorter.
The most common way to earn free bets is via risk-free welcome offers, but betting sites also issue them to customers for other reasons. For example, a sportsbook may host a temporary promotion during which it awards free bets to all customers who wager a minimum amount on a select sport.
Bettors can also often earn free bets via parlay insurance promotions. A common theme among online sportsbooks is to refund customers with free bets if they place a parlay that comes up exactly one leg short.
Other books get even craftier with their free bet offers. For example, one of the most popular PointsBet bonuses gives bettors who place moneyline wagers free bets for every touchdown, 3-pointer, or goal their teams score.
What Is a Site Credit?
While most online sportsbooks award free bets to users who place first wagers that lose, a few take a more generous path and issue site credit.
The FanDuel Sportsbook bonus takes this approach. Bettors who claim FanDuel’s $1,000 no sweat first bet welcome offer receive site credit refunds if their initial wagers lose. This facet alone makes it one of the best welcome packages in the industry.
There are two reasons why. First off, bettors can spend site credit however they wish, without restriction. The only real caveat is that customers are subject to a 1x rollover requirement before they can withdraw their winnings.
Additionally, customers who place winning bets with set credit receive payouts that include the profits and the initial stake. That’s in contrast to free bets that only return the net profit and is the most significant advantage of promos that award site credit rather than free bets.
The stark difference becomes apparent when considering an example.
Imagine a bettor has eyes on the Golden State Warriors moneyline at +200 odds. If the bettor uses a $100 site credit to place the wager, the potential payout will be $300 ($100 initial stake + $200 profit). However, the return is only $200 if a bettor places the same wager using a free bet.
To sum it up, bettors should strongly consider taking up any risk-free bet offers that issue refunds in the form of site credit. Not doing so is like leaving money on the table.
Do Horse Racing Betting Sites Also Issue Risk-Free Bets?
Yes. While racing sites are more likely to offer deposit match bonuses to new players, it’s not uncommon to find risk-free bet promos.
For instance, TVG welcomes new players with a $300 risk-free promo. If a new customer’s first bet loses, TVG issues a full refund as a wagering credit. The wagering credit functions like a site credit in that bettors can use it however they like and receive their initial stake back on winning bets.
The FanDuel Group owns TVG, so it’s not shocking that TVG’s new player bonus is set up similarly to FanDuel’s.
Risk-Free Bet Terms and Conditions to Watch Out For
Bettors should always comb the fine print before claiming any betting bonus or welcome offer. One sportsbook’s risk-free bet may look like another operator’s welcome offer, but the terms and conditions often reveal critical differences.
Below are some basic questions every bettor should ask before taking the plunge:
Beginner Tips for Getting the Most out of Risk-Free Bets
Even if utilized sub-optimally, risk-free bets are positive expectation wagers. If possible, bettors should take full advantage of them by placing a wager equal to the maximum refund amount.
Anything more is counterproductive. A $1,000 risk-free bet promo will kick back $1,000 on losing wagers regardless of whether the wager is $1,000, $2,000, or $5,000.
On the other hand, bettors shouldn’t feel forced to wager the max. Those with limited bankrolls are better off first claiming risk-free bets with lower monetary caps and tackling larger offers after building a reserve.
Additionally, a part of a sound betting strategy is always to read the promotional terms and conditions first. Do this before making a deposit and ideally before signing up.
Again, all risk-free bet offers are advantageous to the bettor, so the optimal strategy is to claim as many as possible. But not everyone has that luxury. In that case, go for the ones that offer the most bang for the buck – namely bonuses that issue site credits or don’t burden bettors with unfavorable restrictions.
Betting Strategy for Extracting Maximum Value from Risk-Free Bets
The vernacular “risk-free” is a misrepresentation, as bettors looking to maximize their returns are best off embracing significant risk. In other words, they’ll generate more value by using their risk-free bet and subsequent refund on appealing longshots.
Why? Because betting on underdogs increases the likelihood of receiving a refund. This logic may seem contradictory at first. After all, why would bettors ever want to increase their chances of losing? But the math holds.
For simplicity, assume that a book offers fair odds. A bettor uses their risk-free bet on the Dallas Cowboys, which are -200 moneyline favorites against the Philadelphia Eagles. The implied odds of Dallas winning are 66.67%. If a bettor places a $500 risk-free bet on Dallas, there are the two possible outcomes:
- Dallas wins: The bettor pockets $750 ($500 stake + $250 profits). No free bet or site credit is awarded. This scenario occurs 66.67% of the time. The expected value is exactly $500 ($750 x .6667).
- Dallas loses: The bettor loses $500 but wins a $500 free bet. This happens 33.33% of the time.
Now, imagine the bettor wagered on Philadelphia, a +200 moneyline underdog. A winning wager would pay out $1,500 and occur 33.33% of the time. The expected value is still exactly $500 ($1,500 x 0.3333). However, now the bettor receives a site credit or free bet 66.67% time – twice as often as before.
The expected value doesn’t change, but the frequency the bettor wins a free bet doubles. Thus, the overall expectation of betting a +200 moneyline underdog is higher than banking on a -200 moneyline favorite.
This isn’t to say that bettors should just go crazy and use their risk-free bet on a 10-leg parlay at +10000 odds, but it showcases a critical point: The longer the odds, the more valuable the risk-free bet.
The same logic applies to free bets. Remember, free bets don’t return the initial stake. If a bettor uses one on a favorite and wins, they’ll end up with less money in their cash wallet than the value of the original free bet.
Let’s use the same example as before to showcase this point. If bettors place a $500 free bet on Dallas at -200, they will win $250 66.67% of the time and lose 33.33% of the time. Over the long haul, bettors who take this approach can expect a return of $166.68 on their free bets. That doesn’t sound like a great deal.
Instead, if the bettor chooses the Eagles at +200, they will win $1,000 33.33% of the time and lose the other two-thirds. The expectation skyrockets to $333.33.
In this scenario, the bettor is also twice as likely to walk away with nothing. Risk-averse types won’t love that, but unfortunately, the best way for bettors to maximize value is to cross their fingers and go long.
At the very least, use free bets on wagers at +100 odds so the return is equal to the size of the wager.
Wes Burns co-founded BettingBonuses.com to help bettors clearly understand offers and promotions at legal online sportsbooks and betting sites. Wes has worked in the regulated online betting industry since 2008.