Are There Reasons Why Free Bets Rule US Sportsbook Offers?

For example, you can win $50 in free bets on a $100 wager, but your total wager has to hit the $450 mark. This is something called the rollover or playthrough. ^[1]

This is no big issue to a sharp bettor because they have the budget to support it. Casual bettors? They feel the pinch and have to make a decision: to add the additional $350 or fortait. Most chase it, something sportsbooks want. They want that volume.

Why Free Bets Are Better Than Cash Bonuses

Free bets and cash bonuses are different. You can use or take out cash bonuses safely. And this option makes it less valuable for the sportsbook. 

Free bets are quite different. They have an expiration date if you fail to use them. And this is why most people prefer them to cash bonuses. Tests show that more people use free bets, even if the amount is the same.

The expiration date helps too. A bettor might take some time off from betting, but they know they will still have room to bet with the free bet. This keeps them interested and may cost the sportsbook less than getting a new customer.

Rollover Requirements and Where Margin Accumulates

Here’s where the weighty costs come in: the rollover requirements. A 5x rollover on a $100 bonus means that you have to place bets worth $500. And this before you
withdraw the bonus value as cash. Assuming standard -110 odds, a bettor with a 52.4% win rate will lose -0.7% per bet.

For instance, DraftKings provides a 20% bonus on $500 deposits, resulting in a $100 bonus. To redeem this bonus, you must wager $2,500 within 90 days, receiving $1 for every $25 wagered. If your bet size is $20, you need to place more than 125 bets to fulfill this requirement and receive the bonus, which might lead to losses exceeding the bonus value. ^[2]

Some offshore books even have higher rollover requirements. For example, 10x or even 20x. This means that you will likely lose money before you can even use the bonus.

Market Restrictions and the Margin-Guiding Effect

Most sportsbooks restrict the bets that go towards clearing rollovers. Bets with odds worse than -200 are often not honoured. This may lead bettors to gravitate to markets that earn the sportsbook more money.

The margin on moneyline bets is normally 5-6%. Spread bets, on the other hand, have around 4.5%. If a sportsbook can clear rollovers on moneylines or totals, it can make more money off each bet. Some sportsbooks only count certain types of bets as net wins, not the total amount wagered. This can make the process go longer. These limits can be very significant to how much of a bonus is really useful for US bettors in NFL and NBA markets.

Why Bettors Think Free Bets Are Worth More

A $50 free bet isn't worth $50. If you win at -110 odds, you get $45.45 profit, because you don't get the $50 stake back. Based on the chance of winning, its true value is about $23.80 before you use it again. If you have to bet the bonus more, its value can fall even more depending on what you bet and how often.

But people often remember recent wins. If someone uses a free bet and wins, they think the offer is worth it. But if a loss comes after, it's as if it's not connected to the free bet. And this separation helps the companies that offer free bets.

Social media also plays a part. You will often come across posts on wins from free bets. But not the ones where you incur losses.

Keeping Customers is Better Than Getting New Ones

The real cost that US bookies use to get new clients is a secret. But estimates say it’s between $300 and $500 for each active user in competitive areas. So, a $50 free bet that keeps a customer active during a slow month is a smart way to keep them.

To keep people interested between major sports events, companies send regular offers such as “bet $50 this week, get a $25 free bet.” The NFL schedule brings busy times, and the gaps can cause customers to lose interest. Without some kind of offer, those who bet on NFL games may be less likely to wager in the spring.

The same idea works for NBA and MLS bettors. Bookies usually plan promotions around the off-seasons of each sport.