Sports Book Arbitrage

As a service worker, several hundred bucks can mean a few nights of tips or even a month of rent (a partial month if you're in New York).

Sitting at the intersection of tech and coffee, I wanted to let my fellow baristas in on an opportunity to arbitrage new sports betting promotions, made available by changes in gambling regulation.

When regulatory changes create an opportunity for tech companies to capture market share, they'll often set aside generous marketing budgets to acquire users (paid marketing).

Because Sportsbook betting is now legal in New York,

• FanDuel is offering a reimbursement of up to $1000 on a user's first bet; if you lose ≤$1000 on your first bet, up to $1000 will be credited to your account in the form of site credit within 72 hours.
• And Caesars Sportsbook is offering a match of up to $1500 in cash deposited.

By betting on both sides of a game twice, you can convert promotional bonuses ("house money") into real money.

* I encourage you to read the fine print of both offers before depositing your money.

How it Works

Table Stakes

With a smartphone and $3000 of disposable income, service workers can take advantage of promotional bonuses to make an additional ~$1500 to $2500** with near zero risk.

Because sports betting is considered gambling, you will also need to share your personal information (KYC) with both betting platforms and the IRS in order to proceed with betting.

** Updated 2/25. While bonuses originally allowed for up to $3000 in upside, Caesars has since changed their promotional offer to limit returns. Specifically, the free bet stake will not be included in any potential winnings. For example, a winning $1500 free bet at +100 odds would return the user $1500 total (the wager profit), not $3000 ($1500 original stake + $1500 profit) that you would receive from a normal wager.

See this sheet for math.

Playing Both Sides of a Game with "House Money"

In Sportsbook betting, you're betting against the house. Companies like FanDuel and Caesars predetermine the odds of a game, and players stake cash in order to bet for or against the odds.

To take advantage of promotions, the general idea is to bet on both sides of a game in a way that balances the payout of the game as such:

Ex. Nets (FanDuel) vs Lakers (Caesars)

Payout =
Amount bet * Odds of Winning (Nets) =
Amount bet * Odds of Winning (Lakers)

You’ll be making two straight, moneyline bets (i.e. you’re only betting on who wins, nothing else) where the odds of the games are fairly close.

You need to make two bets, because the FanDuel reimbursement only kicks in after you lose $1000 in the first bet. Because the $1000 reimbursement is in site credit, you’ll need to make a second bet using the credit in order to convert the "house money" into real money.

As of February 2022, Caesars has changed the payout of bets using the promotional "Deposit Match". Therefore, after making the second bet using FanDuel site credit, you should immediately cash out before the game is played, thereby converting site credit into real money.

Betting on games with similar odds ensures that your payout on both sides remains fairly balanced, giving you enough wiggle room to make the second bet.

Use this spreadsheet to calculate how much you should bet in each app for each game. Alternatively, you can run the following JavaScript to check your odds.

let uDog = "Knicks"; 
let fav = "Nets"; 
let uDogOdds = -100.0; 
let favOdds = 110.0; 

function uDogOddsToP(uDogOdds) {
  let pUDogWin = (-1.0 * uDogOdds) / ((-1.0 * uDogOdds) + 100.0); 
  return pUDogWin;
}; 

function favOddsToP(favOdds) { 
  let pFavWin = 100.0 / (favOdds + 100.0); 
  return pFavWin;
}; 

function payoutFactorCalc(odds){
  let absOdds = Math.abs(odds);
  
  let direction = -1 // default is underdog
  if (odds > 0) {
    direction = 1;
  }; 
  
  let winFactor = Math.pow((absOdds / 100), direction); 
  //  exponent raise base absOdds to exponent direction
  let payoutFactor = winFactor + 1.0 
  return payoutFactor
}

function betCalc(betCount, uDogOdds, favOdds) { 
  if (betCount == 1) { 
    let csBet = 1500; 
    let payout = payoutFactor(favOdds) * csBet; 
    let fdBet = payoutFactor(uDogOdds) / payout; 
  } 
  else if (betCount == 2) {
    let fdBet = 1000; 
    let payout = payoutFactor(favOdds) * fdBet; 
    let csBet = payoutFactor(uDogOdds) / payout; 
  }
};

Tactical Tips

The UX for both FanDuel and Caesars can be confusing. Below is a step by step guide with specific callouts.

Sign up Guide for FanDuel and Caesars

1. Download the FanDuel Sportsbook app and register for an account. No FanDuel promo code necessary.
2. Download the Cesars Sportsbook app.
3. Apply the bonus code ESNYXLCZR (you can also use any of the other promo codes listed on in the fine print attached below). No Deposit Code necessary.
4. Ensure that the bonus promotional bonus has been applied.

Deposit Cash

1. Deposit $1100 into FanDuel Sportsbook
2. Deposit $1900 into Caesars Sportsbook
3. (Optional) On Caesars, you can also get $150 in NBA credit.
4. Tap Promo
5. Tap the NBA banner
6. Tap more and opt into the promotion

As always, you should do your own research. Read the full terms of each promotion below.

Conclusion

Sportsbook betting is now legal in New York. Because FanDuel and Caesars want to acquire new users, service workers can take advantage of promotional bonuses to convert "house money" into "real money".

By betting on two sides of the same game twice (a general rule is to bet on the Underdog with the app that has the highest payoff),

With my earnings, I'm taking friends out to a good meal and reinvesting the remaining into cryptocurrency (now is a perfect buying opportunity).

Oh and I’m definitely copping a jersey with my $150 in NBA Store credit.

Thanks to James H. for the initial tip-off.

End Notes

Taxes

The federal tax rate for gambling earnings above $600 is 24%.

The NY State tax rate is a function of your income and ranges from 4% to 8%. Download a copy of your bets — even if you don’t hang it up, you’ll have to hand it to your accountant.