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How to Optimize Insurance Promos

by ROI Guy | Last Updated: March 31, 2024

One of the most popular promotions we’ve been seeing recently is the SGP insurance promo from Draftkings. My plays for this promo have been extremely profitable, and many people have asked how I come up with them.

Beyond the obvious answer of looking for lines with value, it is also important to tailor the play for the specific promo you are using. Below, I’ll go over some of the most important factors to consider for this specific promotion, and what makes each of these factors so important.

Promotion Terms

First, let’s talk about rules. Insurance promos are very common, with most major books offering some form of this promotion in the past. Don’t be fooled though – promos that seem similar can actually be very different depending on the exact terms of the promo.

The terms of this specific Draftkings daily insurance promo are as follows:

Building an Insurance Play

When trying to optimize a promo, the question you should be asking yourself is “how is this bet different than a regular bet”? In this case, the difference is that if exactly one leg loses, you get a nice compensation prize. Therefore, all else being equal, your goal with this promo should be to create a bet with the highest possible chance of 1 leg losing.

Here is a list of best practices designed to do just that:

  1. Only use 3 legs (the promo allows you to use more legs, but we should keep it at 3)
  2. Make sure each individual leg is as close to -300 odds as possible
  3. If you can find a 3-leg SGP that includes some negative correlation, that is ideal. If not, at the very least avoid any positive correlation.

Let’s go through each of these best practices and explain the reasoning.

1) Only use 3 legs

When you bet a parlay, there are many ways you can lose. You can have one leg lose, you can have all legs lose, or anywhere in between. The more legs there are in the parlay, the more likely it is that more than 1 leg loses. Since we want to maximize the chance of specifically 1 leg losing, we always use the minimum number of legs we are allowed (in this case that’s 3).

2) Each leg should be close to -300 odds

Making sure each leg is as safe as possible is probably the most important factor in maximizing this promo. When 3 “safe” legs are used, the chances of losing more than 1 leg are lessened. This makes sense logically, but if you’d like to see it mathematically, check out the below example. If not, just skip to the next section.

Case 1: You have a 3-leg parlay (assume it’s a regular parlay for now – as we’ll see soon SGPs have some extra wrinkles to consider) with each leg being -300 odds, as well as having a fair value of -300 (i.e you expect that leg to have a 75% chance to hit). The parlay comes out to +137. Here are the chances of each of the following happening:

In this example, we have a 42.2% chance of hitting insurance. Not bad! If you bet $10 on this parlay, you have a 42.2% chance of returning $23.70, and a 42.2% chance of getting a $10 bonus bet back, which is worth $7 (bonus bets are typically worth 70% of their value). $23.70*.422 +$7*.422 = $12.96, for an expected ROI of 29.6%

Case 2: each leg is +100, with a fair value of +100. The parlay comes out to +700.

Now we only have a 37.5% chance to hit insurance. A $10 bet would have a 12.5% chance of returning $80, and a 37.5% chance of returning your $7 worth of bonus bets. $80*.125 +7*.375 = $12.63, for an expected ROI of 26.3%. Still profitable, but not as profitable as when we made all 3 legs -300 odds.

3) Aim for negative correlation and avoid positive correlation

When betting on an SGP, there’s another wrinkle to consider: correlation.

Consider the following example:

Remember, we want to maximize the odds of exactly 1 leg losing. Typically all 3 of these legs would be very likely to hit individually. But this would almost certainly NOT be a good play for the insurance promo.

There are many reasons why Patrick Mahomes might fail to throw for 250 yards. The Chiefs might rely on their ground game one week, they may take a big lead and not have to throw, Patrick Mahomes may get injured… you get the idea.

Most of these scenarios would not only hurt Patrick Mahomes, but they would also hurt the projections for his receivers. While it is certainly possible that Travis Kelce can get 40 receiving yards while Mahomes does not get 250 passing yards, it is far more likely that he would get 40 receiving yards if Mahomes has a big day passing the ball.

Likewise, the more Mahomes throws the ball, the more points are likely to be scored. It is unlikely for both Mahomes and Kelce to have good games in a very low scoring game, and it is also unlikely that one of Mahomes or Kelce struggle in a high scoring game. Because of the correlation, if this play loses it is likely that 2 or 3 legs will lose, instead of the single leg loss that we are aiming for.

Let’s look at the opposite example:

In this example, if Patrick Mahomes does not get 249.5 passing yards, the other 2 legs are fairly likely to hit, giving us our 1 leg loss. While the correlation between the Kelce leg and the total is positive, the negative correlation of the overall parlay should outweigh this, making it a much better option for insurance.

Final Thoughts

To maximize promos, more is required than just finding value. While that’s obviously important, simply finding lines with favorable odds is not enough if you want to fully take advantage of this promotion. By finding valuable lines specifically designed to maximize the promo, you can ensure the maximum amount of profit long term.