Why Do Bookmakers Pay Out Early?
Traditionally, even the most popular bookmakers are not always known for their generosity. So it does seem strange when you see them giving out money before they have to.
However, in recent years there have been several high profile instances of bookies paying out early. Sometimes it can cost them dearly. So why do they do this, and will it happen again in future?
When Have Bookies Paid Out Early?
Recently, Paddy Power have been in the news for paying out early on two big political bets. In March 2016, they paid out on Donald Trump winning the Republican party nomination before the result was announced. Of course, Trump went on to secure the nomination, but punters got their profits early.
However, later that year Paddy Power scored a spectacular fail. In October they also paid out early on Hillary Clinton winning the presidency. Clinton was the overwhelming favourite at the time. But we all know what happened there, and Paddy Power ended up having to pay out twice on the same market as Trump scored an unexpected election victory.
This was a very expensive mistake for Paddy, costing them around £800,000! It shows that paying out early is not always the smart move.
So Why Do They Do It?
As well as the examples above, there have been several times over the years when Paddy or other major bookies have paid out early. They will generally only do this when they are fairly certain of the result, although as you can see they can sometimes get it wrong. But what’s in it for them? There are two main advantages.
The main reason why bookmakers pay out early is for publicity. Although it can be very expensive when they get it wrong, they still gain a lot of media exposure. If they get it right, they still get the same exposure but it doesn’t cost them anything.
Stop Taking Bets
Another reason for paying out early is that it allows the bookie to stop taking bets. They won’t always want to do this of course, but sometimes if they are really sure of the result, they might not want any more bets on the favourite.
If they simply refused to take any more bets, people would complain and this would be bad publicity for them. But if they said the market was already settled, people would applaud them for being generous to the punters who had already placed their bet.
So that’s why bookies sometimes choose to pay out early. If it happens to you, then congratulations! But considering that they don’t always predict the right result, maybe you should consider investing some of your winnings on betting on the other outcome as well. That way you can easily win the same bet twice!