The early cash out feature, also known as the buy out at some sportsbooks, allows bettors to close their outstanding bets early to cut their losses or lock in a win.
If a bettor’s team is winning, but the game looks too competitive for comfort, they can use the cash out option to settle the bet right there. Doing so pays less than letting the wager ride, but it locks in their profit no matter the game’s outcome.
Cash out bets are a staple in sports betting, and almost every mobile sportsbook offers the feature.
Below, BettingUSA will explain how early payout bets work, how bettors can use them, and whether they provide any real benefit to bettors.
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Cash Out Bets Explained
The cash out concept is simple: it’s a mechanism by which bettors can settle their wagers before completion.
For example, consider a bettor who has wagered $100 on the Red Sox moneyline and is now feeling squeamish about their one-run lead in the 6th. In this case, the bettor can activate the cash out feature to close the bet, and their payout will reflect the current odds.
If the Red Sox end up blowing the lead, the bettor can take satisfaction knowing they locked in a little profit they wouldn’t have otherwise. If the Red Sox go on to win, the bettor doesn’t have to feel too bad because they still netted a profit, even if it was less than letting the bet ride.
The cash out amount is always less than what the wager would have paid had it won outright. Likewise, it is always more than $0. In that way, the cash out feature functions as a type of risk mitigation vehicle by which bettors can lock in a smaller win or steer clear of total disaster.
Cash outs are unique in that instead of promoting high variance like so many other sportsbook innovations do, they encourage players to mitigate risk. In this respect, they share similarities to hedging.
Of course, since online sportsbooks are in the business of making money, there is an added cost associated with buy outs. Bettors who use the early cash out feature get a second helping of juice (or vig), which is sometimes in line with the current in-play vig but often higher.
In other words, the conveniences that cash outs afford come affixed with a hefty price tag.
Early Payout Bet Restrictions
Cash out eligibility varies wildly from one sportsbook to the next. At the very least, they should be available for select pregame markets. Point spreads, totals, and moneylines are typically buy out friendly wagers.
Some betting apps take it even further. For instance, DraftKings Sportsbook offers cash outs on pregame, in-play wagers, futures, and parlays for many (but not all) sports.
PointsBet sportsbook takes a different approach, with cash outs available on all pregame fixed-odds bets, regardless of the market.
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Typically, bets placed using free bets or bonus funds do not qualify for early cash outs. Additionally, bettors who have opted-in to a risk-free bet promotion or other promos that offer insurance against losses do not qualify for free bets or refunds if they cash out early, even if their picks ultimately lose.
In other words, the early cash out betting feature usually does not play well with promotions. If a bettor has an active promotion, they should check its terms and conditions before using the buy-out feature.
How to Initiate a Buy Out at Sportsbooks
Bettors can tell if an outstanding wager is eligible for a cash out by visiting the active bets area (often titled something like “My Bets” or “Open Wagers”) when logged in to their mobile betting accounts.
Some sportsbooks, including the BetMGM Sportsbook app, integrate the active bets menu into the betting slip as a separate tab:
Customers can initiate a cash out by visiting the pending wagers page or tab before the contest has completed and finding the wager they wish to close early. If the bet is eligible for an early cash out, the sportsbook will list a cash out price. The bettor can either accept the current price immediately or wait to see if the price moves in their favor.
Note: Just as sportsbooks can suspend in-play betting at their discretion, they can also stop offering cash outs whenever they choose.
If a sportsbook suddenly disables the cash out feature during a contest, it often means the oddsmakers are adjusting the in-play odds. In that case, the sportsbook will likely reactivate the cash out feature with a new payout amount momentarily. However, the likelihood of a sportsbook permanently disabling cash outs on a particular bet increases as the game draws nearer to a conclusion.
Should You Ever Take a Cash Out?
There are a few instances where taking a buy out makes sense.
One is if the bettor has clearly bet over their bankroll and is now having second thoughts. In this scenario, bettors can think of the cash out as a “get out of jail free” card.
A second is the rare but fortunate instance in which the bettor is positioned to win life-changing money but could just as easily walk away with nothing. In that case, it is worth considering taking an early cash out.
For example, a BetMGM bettor once placed a $25 16-leg NFL parlay and managed to hit the first 15 legs. The bettor stood to win $736,959 if the final leg came through, which was a wager on the Detroit Lions at +400 odds.
The bettor decided to settle for $133,000 before kickoff, representing 5,230x his initial bet. It proved to be a smart move, as the Lions went on to lose the game.
Interestingly, the bettor placed the $25 parlay with a free bet, which is normally not eligible for cash outs. However, BetMGM made an exception for the bettor due to the special circumstances. If it wasn’t for cash outs, the customer’s only other way to mitigate risk would have been to hedge, but that would have required an enormous bankroll.
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Exceptions aside, most serious bettors agree that they’re better off fading cash outs altogether. The problem lies with the vig, which can be enormous.
For example, this author recently placed a $20 run line bet on the Red Sox at +105. The Sox got off hot, jumping to a 2-0 lead in the first. Not surprisingly, the in-game line shortened all the way to -200, representing true odds of roughly -175.
The cash out offer on that bet at that time was $23.21. That seemed awfully low, so I ran the numbers. At -175 odds, the probability of the Red Sox winning was 63.63%, meaning a fair offer would have been that percentage of the offered cash out.
But by taking the cash out option, I would have paid a tax of $2.88, which is a whopping 11%. And that’s on top of the vig I already paid for the privilege of placing the initial wager.
If a bettor is having second thoughts or desperately wants to lock up a win, then there’s nothing wrong with accepting a cash out offer. However, bettors should remember cash outs will gouge their bankrolls over the long haul. The best advice for regular bettors is to use cash outs sparingly and with caution.
Cash Out Bets Frequently Asked Questions
In which states are buy out bets available? The buy out feature is available in most states with legal online sports betting. Which sportsbooks offer early cash outs? Most major US sports betting brands have embraced the early cash out option. Not only is the concept popular among bettors because it gives them an extra level of control, but it gives sportsbooks an additional revenue stream. Can I cash out a parlay wager? Yes. Most sportsbooks allow bettors to cash out their parlays early. Cashing out a parlay incurs a sizable penalty relative to letting it ride. However, if the buy out price is a significant sum of money, the bettor may find it better to collect the guaranteed payout even if it’s not the mathematically optimal decision. Can I cash out live bets? Some sportsbooks offer early cash outs for in-play wagers that haven’t yet resolved. DraftKings Sportsbook is the most prominent operator with cash outs available for in-play betting markets.
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