Bonus bets: how they work and how to turn one into cash

What is a bonus bet?

A bonus bet is a free-to-use stake credited to your account, usually as a promotion or as a refund on a losing bet. Terms vary by book and by state, and the same idea goes by other names: free bet, free play, FanCash that converts to bonus bets.

What matters is the form. A bonus bet pays only the winnings. Site credit must be wagered once but its stake comes back, and cash is cash. SlateProof values a dollar of each at 65%, 95% and 100%. Some ads call a no-sweat bet that refunds in bonus bets "risk-free". It is not: what comes back is worth less than the cash you lost.

Do you get your stake back on a bonus bet?

No. A winning bonus bet pays the profit only. A $25 bonus bet at +400 that wins pays $100.00, not $125.00, and one that loses costs you nothing but the bonus. That is why short prices waste a bonus bet: at -500 the winnings are a fifth of the stake.

How much is a bonus bet worth?

Unhedged, a bonus bet is worth p x (d - 1) x B, where p is the fair chance it wins, d the decimal price and B the bonus. Hedged, the locked cash is B x (d1 - 1) x (d2 - 1) / d2, where d2 is the price you get on the other side.

For the $25 bonus bet at +400 (decimal 5.00) with a fair win chance of 18%, the unhedged value is $18.00, or 72% of face. If the other side were priced with no margin at all, you would keep exactly 1 minus the bonus bet's own implied chance. The table shows how much the price you choose matters.

Longer prices keep more of the bonus but need more cash to hedge. In SlateProof's offline strategy tests, a hedge locked about 78% of the bonus on the best bet of the day and about 59% on a typical single bet. Treat any figure as an estimate: real hedge prices carry a margin.

How do I convert a bonus bet to cash?

Bet the bonus bet on one outcome and bet the opposite outcome with cash at another venue, sized so you collect the same amount either way. The hedge stake is H = B x (d1 - 1) / d2.

1. Put the $25 bonus bet on a +400 outcome. If it wins it pays $100.00.
2. Find the opposite outcome at a different venue. Convert its price to decimal and, at an exchange, include the fee.
3. Stake H = $25 x (5.00 - 1) / d2 of your own cash on it.
4. Check that both results leave you with the same profit, then place the cash bet first if its price is the one more likely to move.

The Kalshi hedge buys 100 contracts at 80 cents plus a $1.12 fee, so it costs $81.12 and pays $100 if it wins. The bonus bet calculator works the same numbers for your own prices.

Which odds work best for a bonus bet?

Longer odds convert a bigger share of the bonus, as the table above shows, as long as you can hedge at a fair price. A heavy favorite keeps only a few cents on the dollar, and a long parlay compounds the sportsbook's margin on every leg.

Long shots have a catch. Player-prop prices at long odds carry the most margin, and the cash you need for the hedge grows with the price. SlateProof's tests pointed to roughly +300 to +700. Check each token's own minimum odds before you choose, and keep the bet on a single outcome with a clear result so the hedge is easy to place.

Can I hedge a bonus bet at an exchange or prediction market?

Yes, where the exchange is available in your state, and it often gives a better hedge price than a second sportsbook. In SlateProof's offline test, letting exchanges take the hedge raised the best daily bonus-bet conversion from about 52% (with only DraftKings and FanDuel) to about 78%.

Three things change. The exchange charges a fee that depends on the price (the Kalshi example above includes it). Contracts trade in whole units and you can only buy what other traders have resting, so check the depth. And settlement differs: if a player does not play, a sportsbook voids the bet, while an exchange may settle at a last fair price. Read each exchange's page and the state availability pages first, and see the prediction markets guide for the fee and settlement details.

Do bonus bets expire?

Yes. Seven days is common, and some expire within a day. The terms recorded in SlateProof's promo catalog show the range; the offer in your own app is the one that counts.

Dollar amounts marked as assumed in the catalog were not published by the book. Many tokens are targeted, so your account may show different sizes.

What about no-sweat bets and refunds paid in bonus bets?

A no-sweat bet refunds a losing stake, and the refund is worth what its form is worth. Every refund promo SlateProof checked on October 6, 2026 paid bonus bets, so it counts at about 65 cents on the dollar, not 100.

The value is S x (p x d - 1) + (1 - p) x c x S, where c is the refund's value per dollar. For a $25 no-sweat bet at +200 with a 31% fair chance, the bet itself is worth -$1.75 and the refund adds the rest:

In an offline test, a $25 no-sweat refunded as a bonus bet and hedged locked about $12.80, roughly 51% of the stake, against about $17.60 when the refund was site credit.

Are bonus-bet winnings taxable?

Yes. Gambling winnings are taxable income and you may deduct losses only if you itemize (IRS Topic 419). From the 2026 tax year only 90% of wagering losses are deductible (26 U.S.C. 165(d)).

A hedged bonus bet has a built-in quirk. If the bonus bet wins, the winnings are income and your cash hedge is a loss; if the hedge wins, the bonus bet that lost cost you no cash, so there is no loss to deduct. This table uses the $25 bonus bet at +400 hedged at a fair price, which locks $20.00 before tax, at a 24% federal rate. It is an illustration, not tax advice.

The last column weights the two results by the market's chances (the bonus bet wins 20% of the time). An itemizer under the 2026 rule keeps $14.82 of the $20.00 locked, and someone who does not itemize keeps $11.36. The quirk hurts arbitrage more, because both legs there are cash. Keep records of every bet and ask a tax professional.

What are the risks?

The main risks are a voided bet, a limit, a minimum-odds rule and a price that moves before you hedge. A locked profit holds only if both bets are accepted at the prices you used.

• Place the cash hedge first when its price is the one more likely to move or be limited, then place the bonus bet.
• A bonus bet can come with a minimum price, a sport or market restriction and an expiry. Read them before you pick a bet.
• Some promo terms bar betting both sides of the same event; read the terms of your offer.
• A player prop can be voided if the player does not play, and an exchange may settle the same prop differently.
• Prop stakes are often capped, so a large hedge may not be accepted.

Keep going

See what each new customer offer is worth in the sign-up offers guide, and how boosts and no-sweat bets work in the sportsbook promos guide. Use the bonus bet calculator and the hedge calculator on your own prices. Today's bonus-bet hedges, with exact stakes, are on the live board.