To cash out or not to cash out is the question! The concept of closing a bet before expiry to guarantee a win first came into the public domain towards the end of the 2015/16 Premier League season. Leicester could have been backed at 5,000/1 to win the title at the start of the season. Surely nobody had backed them at that price! In fact a number of loyal supporters had placed fivers and tenners on their team to be the champions of England against the odds. It became the biggest upset in the history of team sport and Hollywood made a movie about Jamie Vardy.
Bookmakers calculate the returns when a bet is cashed out. Any innovation will be in their interests so you can assume the cash out facility works in their favour. The offer to punters cashing out is calculated to be attractive but also make more money for the bookmaker. Not only does the action guarantee a win for the customers it guarantees that the bookmaker will not have to pay out the full amount. The trade-off between a guarantee and reducing the maximum potential win is good business for the bookmaker and that’s why the concept was introduced.
The Leicester City case is a good illustration of this point. If a bookie had taken £100 in bets on Leicester at 5,000/1 the liability is half a million pounds. Depending on the odds at the time cash out may mean a guaranteed payout to the punters of £200,000. In effect the bookmakers have saved £300,000 and the cost is that they have to pay out punters who cash out even if Leicester had not won the league. The bettor and bookmaker are giving up one thing to guarantee another. If the option is mutually beneficial cash out is the best option but the punter loses more from the deal.
Backers of Leicester to win the Premier League were in a unique position because never has a team looked like winning a league at 5,000/1. As the odds tumbled the mainstream media latched on to the story and the bookies PR staff went into overdrive. As each week went by with Leicester not faltering the amount of the no-risk profit increased. Some Leicester backers bailed out early in the piece and most cashed out at some stage but others stayed with the bet and were paid out at 5,000/1.
Even though cashing out is a relatively new option bookmakers offer the facility on several main betting sports and the appropriate markets. The most common cash out opportunity is when a team backed to win a match scores the first goal. It depends on the stage of the match but the odds fluctuate to such an extent after a goal that cash out is a good option. If the backed team concede the second goal the match odds return to something like the original if the match has some time to go. A late equaliser means the draw odds are slashed but draw backers are few and far between.
Cash out suits some bettors who believe in the saying ‘A bird in the hand….’ But others prefer to go all the way. If you are backing an outcome in the first place it seems strange to bail out on the bet at disadvantageous odds. Its all about the timing as several Leicester fans know to their cost or benefit.