A bonus bet is not free cash. It is, exactly as the name implies – it’s a bet.
Your return from the use of a bonus bet is the profit from the transaction only. If you place a $100 bonus bet on Manchester United at the odds of $2.00 to win, your cash return in the event of United winning is $100 only; ($100 x $2.00) – $100 bonus
If you placed $100 of your own cash on this same bet, the return would be $200; the $100 you outlaid and $100 profit.
People will often learn the lesson on how to use bonus bets the hard way. For example, say you place your $100 bonus bet on Roger Federer to win the first round of Wimbledon at $1.02 thinking this will just about guarantee you a return of $102.
In actual fact, this would only return $2.00 to your account; ($100 x $1.02) – $100 bonus
The key to all of this is to stop thinking about short-run actual profits and to start thinking about your long-run expected return.
Table 1 shows the possible outcomes of placing your $100 bonus bet on 3 different bets. Placing your bonus on a $2 bet gives you approximately a 50% chance of winning $100 (remember, you don’t keep the $100 bonus portion). This implies your expected value from this bet is $50.
The bet on $1.02 gives you roughly a 98% chance of winning $2.00, implying an expected return of $1.96
Alternatively, you could place your $100 bonus bet on a $4.00 runner. This gives you about a 25% chance of winning $300 which equates to a long run expected return of $75!
As you can see here, there is a relationship between higher odds and higher expected return when it comes to bonus bets.
Conclusion: Spending a bonus bet on the $4 runner is better as it both: