This is a brief introduction to online gambling. A fellow BLH member asked me to create a fanpost. This is specifically intended for betting on boxing in the United States. Online betting is highly regulated and very few boxing betting sites exist for US residents. People living outside the US typically have a much wider range of betting options and typically under much better terms. If anyone wishes to add or correct what I say, I whole heartedly appreciate your help. I know there are many people on BLH with more experience with finance and betting than I do.
Disclaimer #1: All of my statements are based on personal experience. Nothing is intended as individualized financial or legal advice. I assume no responsibility for your actions. You assume all risk in using the statements below.
Disclaimer #2: Online betting is incredibly risky. It is a high risk/high reward form of investment. Making a considerable amount of money from online betting either requires considerable initial capital or very risky betting strategies. For most people, conventional forms of investment are vastly superior. In the US, the major stock markets have an annual rate of return of 7%. This is a slow but safe form of making money and vastly superior for most people.
1) You need to find a betting website. You should do numerous google searches on what betting websites are allowed for US members. It is not wise to sign up for an account with a betting website that does not allow US citizens or residents. First, they will not normally allow you to create an account without proof of citizenship. Second, even if you are able to sign up, they may deny disbursement of your deposits and winnings based on citizenship.
Beware, there are many scams on the internet. Many betting websites are frauds that only want your personal information. Use third party review websites to confirm the legitimacy of your betting organization. You should probably use multiple review sites because it’s possible fake review sites exist. You may also want to do common google search like "Betting site X scam" just to see if anything pops up. Most betting sites require various forms of identity, including: social security number, passport, driver’s license, bank statements, and more. You do not want this information falling into the wrong hands.
For our purposes, I’m going to be talking specifically about "betonline.ag". They are the site I use. It is one of a handful that are legal within the US. Unfortunately, there are drawbacks to betonline.ag. They do not offer the best odds for boxing (often ~100 points away from the best odds). They have terrible, just terrible, support staff. Also, they have a number of annoying traps for new members. However, overall, they appear to be a credible betting website and I’ve had general success with them.
2) You need to decide how to deposit money and the corresponding fees. There are many ways to deposit money into your betting account. Some methods are instant, some take weeks to process. All of the methods vary tremendously in cost.
The two most common methods are credit card charges and bank wires. The advantage of using a credit card is instant access to funds. You can charge your credit right before a fight and bet on it within minutes. There are numerous disadvantages. First, credit card charges have numerous fees. Credit card charges are taken as cash advances. Your bank will charge a set or variable rate for cash advances (mine was $12). On top of that, the betting organization will charge a fee. My site charges a 15% additional fee. This means, after both fees, a $500 deposit would come out to roughly $465 available balance. A $100 deposit would come out to $75 available balance.
Another common option is wire deposits. Wire deposits typically cost $40-60 from the issuing bank. My site does not charge an incoming fee for wire deposits. However, the site I use is based in Panama and cannot receive direct wire deposits. They need intermediary banks to receive the bank wire and send them the money (which I assume is common). This creates an incredible hassle. WARNING: When you send out a wire deposit, the money is gone for good. There is no fraud protection on this money like with a credit card. Only send wire deposits when you’re sure about the validity of the recipient
I tried sending a two thousand dollar wire deposit to my betting site for the Pacquiao/Rios fight. The money never arrived. The entire method of sending the money was very, very sketching. I’ve used wire deposits in the past with other banks and it’s always been a smooth process. With this betting site I waited 4 weeks, the money was never accepted, and it was eventually sent back to my issuing bank. I talked with support staff approximately 6 different times about the issue and, after hours of being on hold, they never helped me with the issue. It turns out the money had been there several days after the wire deposit but they never processed the claim. It’s an example of terrible customer service. I was very fortunate to receive the money back in my checking account.
Credit cards are probably the best option for small deposits due to a sliding rate. However, these rates can quickly add up. Once you reach a certain level, for my bank that would be $420, you will save more money by making a wire deposit rather than paying the escalating credit card fees. This is assuming you are not using "Free Play" bonuses.
3) The basics of betting. There are many guides on google on how to bet. I’m just going to go over the basic mechanics of the site I use. For most fights there are only two options. First, you bet on who you think will win the fight. Second, you bet on the over/under for a KO. The odds are always better for over/under bets but there tends to be significantly more risk. Personally, I find the difference in odds is usually too small for me to take the risk. KO’s are relatively rare on the elite level and it’s just not worth the chance of making an extra 20% payout.
Betting odds for most sites are in "American Betting Odds". This means there will be a three or four digit number with a corresponding (+) or (-). The (-) means the fighter is the favorite. The (+) means they are an underdog. The number essentially represents what the public at large think are the odds of who will win. For example, a fighter with a -400 odds has a 80% chance of winning. If you bet $100 on that fighter, and he wins, then you would win $20 ((1-.80)*100=$20). Conversely, if the fighter has +400 odds then he has a 20% chance of winning and you will win potentially win $400. Here is an excellent odds calculator: http://www.therx.com/odds-converter-payout-calculator
A common tactic used is called "hedging" a bet. This is when you make multiple, conflicting, bets on a single event. This decreases the risk of losing money but also decreases potential payout. For example, let us say that you are positive a fighter is going to win but not completely sure he’s going to KO the other guy. You could: 1) bet everything on him winning and make a little money; 2) bet everything on him KO’ing the guy, win a lot of money, but take a huge risk; or, 3) bet on him both winning and KO’ing the guy. #3 is what’s called hedging your bet (admittedly, a simplified version). This way you can make sure you’ll make money (assuming the guy is going to win) but also take an additional chance on making more money from the KO. If the KO happens, you get more money than the safe bet. If the KO doesn’t happen, you get less money than betting everything on ‘win’ but you still make money. Just like with regular betting, you can be more or less aggressive depending on your level of risk. For instance, you could bet just enough on ‘win’ to cover your losses on a KO. Or, you could bet very little on the KO and have it more of a metaphorical cherry-on-top of your winnings.
Things change a little bit for big fights. With the site I use, the big fights have more betting options. You can bet on individual round stoppages, bet on UD/MD/SD/RTD/etc. Each of these options have varying degrees of risk depending on their level of likelihood. My site only does this for the biggest boxing and MMA fights (ex: Mayweather, Pacquiao, GSP, Silva).
4) Free Play. This is what really got me when I started online betting. Free Play is where the betting site will give you free money to bet. Usually this is based on a percentage of your original deposits. The site I use gives 25% free play bonuses for your first $1,000 in deposits. This sounds great, right? FREE MONEY!!!
Not so fast. Free play bonuses come with a series of caveats and restrictions. First, it is only available for some forms of deposits. My site allows credit card transactions to be eligible for free play. Wire transfers are not (even though it says so on their website and support staff have confirmed this, they still don’t allow it). Second, if you accept free play then you’re forced to bet a minimum amount of money before being allowed to withdraw your funds. Typically, this is 5x your initial deposit. This number varies greatly by betting website and is something to check into before you sign up.
My personal example: I deposit funds for the Pacquiao fight and hedged my bets between a "KO" and a "win". I bet thousands of dollars on this fight and used the free play bonus. However, the bet didn’t count towards my free play requirement. Hedging doesn’t count towards the requirement (which is unfortunate, because then I could just hedge on a future fight to get an expected payout of $0 and completely avoid the free play betting requirement). So now I’m stuck with a lot of money in my account, winnings and principle, with no way to retrieve the money until I pass the betting requirement.
5) Withdraw. Withdrawing your money is rather easy. Most sites use check, bank wire, or other services. All of these have rather exorbitant prices (ex: My site charges $12 for check and $50 for wire deposit). The key here is identity verification. Sites often require additional identity verification for payouts. They are happy to accept money with very little documentation. However, paying out money is a different matter. I had to send in separate documents and a copy of my passport to be eligible for payouts. It would be an awful shame to go through all the risks of betting only to find out that the site won’t pay you!
Final Thoughts: Go big or go home. Don’t expect to bet $50 and make money. You won’t make anything. All of your money will be eaten up in fees unless you bet on a really big underdog. Ex: Depositing $100 will cost ~$25 in deposit fees and $15 in withdraw fees. That means you’ve got $75 to win at least $40 to come out even. Just to break even you would have to bet on ~-150 odds. To make any serious money you would have to bet on a serious underdog (ex: Soto Karass if he had beat Keith Thurman).
This comes to my second point: If you plan betting on big favorites like Mayweather/Pacquiao/Rigondeaux/Ward/etc then plan on putting down thousands of dollars. They are favorites for a reason. The betting odds are supposed to correlate with their odds of winning. The only way to make money off of them is to bet a lot of money.
My third point: You have to be prepared to lose money. If you don’t think you can spare the extra $100 – DON’T BET IT!!! Nothing is a sure thing and sports betting is incredibly risky.
My final random thought: Sometimes it pays to bet on people you think are going to lose. If the odds on the website are significantly different than your personal opinion you may want put down money on the guy you think is going to lose (the difference can loosely be associated with "arbitrage"). For example, I thought Adrien Broner was going to win against Marcos Maidana. Vegas odds had it at roughly 75/25 odds. I personally thought it was a toss up and more like 55/45. I saw the difference and bet a lot of money on Maidana even though I thought he’d lose. This turned out to make me a lot of money. It’s important to not get carried away here. Typically Vegas odds tend to be pretty good at predicting outcomes.
I hope this guide gives you a basic introduction to online sports betting. I’d appreciate recommendations and comments/corrections. I have no formal affiliation with any website mentioned within this fanpost. Furthermore, this is not individual financial or legal advice. You assume all risk.