Bettie: Sticky Bonus Queston

[Bettie]

Hi gang! I'm posting this question from a friend of mine, who sent it directly to me recently. I don't have the necessary experience to answer it, so am reaching out to see if any of you can help. Thanks!

"We want to exploit something called sticky bonuses that some online websites offer. If you don't already know, that is when the site offers an amount (usually 2 or 3 times what you deposit) that they let you gamble with but not let you take out. For example you give them $100 and they put $300 in your account. You can never pull that $300 out but if you run through your own $100 then you have a chance to make some of it back by using that bonus money.

A way to exploit that is to deposit $100, get your $300, and then make a $400 bet. If you win then you can pull out $800-$300=$500. Of course if you lose then you are out $100 but you are getting 5:1 odds on your bet. (Kinda... you do have to play through $1600 or so in cash before you can cash out but you can grind through BS and expect to lose $10 or so.) A few of us are thinking of pooling our capital and each of us doing this at 5 sites for a total of 15 times and then splitting anything we make. Of course there is a definite chance we will lose everything (or something) but I am looking into what our chances are.

I could go on about other stuff related to this but I want to ask my question. It's about surrender. Am I right in thinking that we should never surrender? We are getting 5:1 odds and the ev for a surrender situation if you hit is a little less than -0.5. Obviously the ev for surrender is -0.5 but if we do surrender then we are left with $200 that we could never take out so we would have to bet that and hope to win to have $400. Then we could only withdraw $100 (net $0). It seems obvious that we should not surrender but I want to make sure that my thinking is correct.

I'm thinking as I am typing this and I wanted to try to explain it (more to myself) in a different way. Assuming we are already in the surrender situation then if we surrender we expect to make $49 or so on average. (expected return of .99 and it's like a normal $50 bet because if we win we get $100 but if we lose we get nothing) We would expect to lose $51 per bet in that situation.

If we don't surrender then since our ev is < -0.5 then our chances of losing are > 3:1 (or call it 3.1:1). For every 3.1 times we expect to get $0 we expect 1 time to get $500 so we should make $122 (net $22) on average per situation. So we should never surrender, correct?"

[Don Schlesinger]

> A way to exploit that is to deposit $100, get your
> $300, and then make a $400 bet. If you win then you
> can pull out $800-$300=$500. Of course if you lose
> then you are out $100 but you are getting 5:1 odds on
> your bet.

That last sentence is all wrong. First, if you pull out $500, $100 is your original money, so your profit is $400, not $500. Moreover, that's the wrong way to look at it.

Were you to do what you describe, you'd have a (roughly) 50% chance of losing $100 (-$50 EV) and a 50% chance of winning $400 (+$200 EV). Together, your EV is +$150 on a $100 investment, which is a lovely 150% return, but nothing like the 5 to 1 odds you mention.

Don

[Don Schlesinger]

Naturally, we haven't yet addressed the $300 that would remain in your account after the first winning bet. Technically, part of it is "yours."

But, we'd have to describe how you're going to bet after the first bet, if we are to determine how much of the remaining funds you might eventually get to keep.

Don

[The Friend]

Hello. I'm The Friend.

Someone doing this would play basic strategy after the initial bet (or variations based on rules, deck size, ect.) in order to minimize loss.

Even with the problems and corrections you pointed out, this is still a goob bet, correct? What about the questions concerning surrender?

[Don Schlesinger]

> Even with the problems and corrections you pointed
> out, this is still a good bet, correct?

Yes.

> What about the
> questions concerning surrender?

I believe it would be correct to not surrender.

Don