Monday, January 10, 2022

How I made 399% on Saturday

By Whitney Tilson

Update: Since I wrote this, the sports betting sites (including three new ones, MGM, Wynn, and PointsBet) have reined in their promotional offers, so much of what I highlighted is no longer available. In particular, be careful of the "risk-free bet" offers in which, if you lose your initial bet, the site gives you a free bet equal to what you lose. This is not the same as crediting your account for the loss, so taking advantage of this offer is not risk-free.

This example shows why: if you open a new account, deposit $1,000, wager it, lose, and get a $1,000 free bet, you have lost money because, when you make another wager using the free bet proceeds, you will either win approximately $900 (in which case, you're down $100) or lose, in which case you've lost your entire $1,000.

The offer here is still attractive: a 50% chance of a $900 profit, a 25% chance of a $100 loss, and a 25% chance of a $1,000 loss, which works out to an expected value gain of $175. But if you lose your initial wager, you will take a loss.

There are still attractive offers out there – both for new customers and ongoing – but there are fewer of them, so read the fine print and be careful!

I try to educate and entertain, but at the end of the day, my primary goal is to help my readers make money.

Usually, this involves recommending a stock, exchange-traded fund, or sector that I think is attractive.

But no matter how compelling I think an investment is, there's always some risk: I could be wrong, and my readers could lose money.

But today, I want to tell you about four companies that are giving away money to residents of 14 states, if these folks play it right.

I studied the offers carefully, opened new accounts, funded them, bet everything on one game in which I had high conviction, and quintupled my money in a matter of hours two days ago. Here's how...

Online sports gambling is now legal in 14 states

On Saturday, New York became the 14th and, by far, the largest state to legalize online sports gambling, joining Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Louisiana, Michigan, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia. These states account for 34% of the U.S. population – a number that is sure to grow.

Four companies entered the New York market on day one and are offering various promotions to entice state residents to sign up (as best I can tell, the same deals are also being offered in the other 13 states).

They are all offering various types of free money in the hopes that people will become long-term customers and eventually give all of that money back – and a lot more!

Therefore, to win at this game, you must not become a long-term customer. Sign up, make a handful of strategic bets, pocket your likely winnings, and walk away.

When it's OK to bet

I am very comfortable betting – and possibly losing – large amounts of money. That's what I did professionally for nearly 18 years as a hedge fund manager.

But – this is the key – I only bet when I'm highly confident that the odds are significantly in my favor. That's always the case when I (usually) buy a stock or (occasionally) invest in a private company.

That's also why I've never purchased a lottery ticket, played any casino games (especially slot machines, which are as addictive as crack cocaine – I'm not exaggerating – see this Atlantic article: How Casinos Enable Gambling Addicts), or, until Saturday, ever wagered on sports.

These are all examples of bets in which the odds are against you – often heavily against you. I have zero interest in such wagers.

But when companies make offers that shift the odds meaningfully in my favor, I'm happy to take advantage...

Details of the four companies' offers

I'd like to first review the four companies' offers, ranked in order of attractiveness, and then share how I took advantage to turn $950 in wagers into $4,743 – a 399% return...

  1. FanDuel offers you a risk-free first bet of up to $1,000. First, open a new account and deposit $1,000. Then pick one game that you have a really strong feeling about and bet it all.

(Note that this must be your first bet on the site after your first deposit – don't get tempted by their bonus funds or small bet offers.)

If you win, you win whatever the payout is. If you lose, you get a site credit.

Now, FanDuel isn't completely crazy... You can't just withdraw the site credit – you have to bet with it. But, if I understand the fine print correctly, you can make, say, 40 $25 bets on a range of games and, odds are, if you just pick randomly, you'll have close to $1,000 left, which you can then withdraw.

Alternatively, bet it all on one game and, at the same time, on one of the other three sites, bet $1,000 on the other team, and either way you win (minus the house take).

  1. Caesars will credit your account with $300 when you open a new account and will also match your first deposit up to $3,000 if you enter the code CZRNEW. So, your $3,000 will give you $6,300 to bet.

I tried to deposit the full $3,000 via a bank transfer, but my bank blocked it, so I instead did an "ACH transfer" of the $500 maximum permitted. Thus, with the $500 match plus the $300 bonus, my account had $1,300. I then tried a $100 bank transfer, which went through, but was not matched, so I stopped at $1,400 (unfortunately, only the first deposit is matched).

  1. BetRivers will match your first $250 if you use the code 250MATCH. You can register here.
  2. I couldn't figure out what the best DraftKings offer is, so I don't know whether to list it last or first. I had my daughter download the app, and there was a banner at the top with a "Free bet up to $5,000" promo that appeared to be similar to the $1,000 FanDuel offer, but I couldn't find this offer anywhere else, nor did I fully understand the fine print (if you lose the initial bet and receive a credit, you may have to bet it many times before you can make a withdrawal).

When I opened my new account, I didn't get any bonus at all, so I only deposited $100. (I think that's because I inadvertently downloaded the DraftKings Fantasy app and opened an account there, rather than the DraftKings Sportsbook app. Had I not made this mistake, I think I would have received a 20% bonus on my initial deposit, up to $5,000 – meaning, if I'd deposited $100, I would have $120 in my account, etc. That's not very attractive, so no big deal...)

My bets

Having established all four accounts, I had a decision: I could play it safe and pretty much guarantee roughly doubling my money by making lots of small 50/50 bets, thereby converting the bonus money to funds I could withdraw, or I could bet it all on one game and make five times my money.

Given that the expected value of the latter is higher – roughly an expected value of making 2.5 times my money versus a double – and that I could afford to lose the amount of money I was wagering, I chose the latter.

I also had a strong feeling about one game: the New York Knicks versus Boston Celtics NBA game on Saturday night. I've been a Celtics fan for more than 40 years since I grew up in New England during the Larry Bird era, so it was quite irritating when, on Thursday night at Madison Square Garden, my favorite team blew a 22-point lead late in the third quarter and lost to the Knicks on a miracle three-pointer as time expired.

On Saturday night, the Celtics were again facing the Knicks, but this time were at home and, I thought, would be looking to make a statement and get revenge. Thus, I figured they'd easily cover the seven-point spread, so I bet everything on this.

When the Celtics won 99-75, here were my winnings:

  • At FanDuel, my $1,000 bet (all my money, but with a full site credit if I lost) paid $909 
  • At Caesars, my $1,400 ($600 of my money plus $800 in bonus and matching money) paid $1,273
  • At BetRivers, my $500 (half mine, half match) paid $470
  • And at DraftKings, my $100 (all mine) paid $91

So, in summary, I risked $950 (which I would have lost entirely had the Celtics lost or won by fewer than seven points), bet $1,000 risk-free, collected $1,050 in matching money (which I will have to bet before I can withdraw it), and won $2,743 when the Celtics prevailed, so my four accounts now have a total of $5,743.

Subtracting the $1,000 that wasn't at risk, I turned $950 in bets into $4,743 – a 399% gain, for a total profit of $3,793.

And here's the thing: it should have been a lot more! If my bank hadn't declined the $3,000 transfer to Caesars, I would have had $6,300 to wager there, not $1,400, and would have won an extra $4,455 – though I would have then been risking another $2,500, which would have made me sweat!

Is this ethical?

Some might argue that it's unethical to take advantage of these offers if I have no intention of sticking around and becoming a long-term (or even short-term) customer.

I actually might agree that this argument could have some merit if we were talking about a good and reputable company like Costco Wholesale (COST).

But these are gambling companies. They use every trick in the book to try to convert as many people as possible into gambling addicts (again, see the article I linked to above: How Casinos Enable Gambling Addicts), so if a lot of people game their promos and make a lot of money, as I did, I view this as wonderful, karmic justice.


I debated whether to share this e-mail with my readers for two reasons...

First, I worry that some of them might bet as I did – but lose. That's up to you. As always, never bet more than you can afford to lose. And remember, you can play it safe and, with a little effort and cleverness, almost double your money risk-free.

My bigger worry is that some of my readers sign up and become hooked on sports gambling (which is exactly what these companies want).

Sadly, this is a real risk. New Jersey residents are now betting more than $1 billion per month, and New York recorded 5.8 million geolocation transactions (including four of mine!) in its first 12 hours of operation, more than double the previous record set by Pennsylvania.

Don't fall into the sports gambling trap!

It is a sucker's game. It's as bad as day trading options on Robinhood (HOOD) which, as I've warned my readers many times, is another sure way to rapidly lose all of your money.

So if you choose to do it... be smart, make some quick money, and walk away.

Best regards,


P.S. I welcome your feedback at [email protected].

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Empire Financial Research

Whitney Tilson

Empire Financial Research founder and CEO Whitney Tilson is the editor of the Empire Investment Report, a monthly investment advisory that focuses on cheap, high-quality stock ideas.

Whitney graduated with honors from Harvard University and Harvard Business School, where he earned an MBA and was named a Baker Scholar. Whitney spent nearly 20 years on Wall Street, during which time he founded and ran Kase Capital Management, growing assets under management from $1 million at inception to a peak of $200 million.

Once dubbed "The Prophet" by CNBC, Whitney predicted the dot-com crash, the housing bust, the 2009 stock bottom, and more. Now, he's sharing his secrets and strategies with followers of his latest endeavor, Empire Financial Research.

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