Matched Betting

Matched betting is the process of converting bookmakers’ free bet offers into real money. When executed correctly there is no risk of losing any money at all, regardless of the presence of the word “betting”. This guide will show you in detail exactly how this is done. A free tool will be included to help you with all related calculations.

First of all, here are some important points to consider. The best free bet offers are available to new customers only and are a one off thing. Of course there are recurrent offers as well, but not always, not with every bookmaker and generally are much less spectacular. So once you go through the process, it is a done deal. This is why it is very important to arrange the process in such a manner that maximum amount is extracted with minimum room for error. Hopefully this guide will help you achieve this goal.

The very first thing to do is open an online betting account with a bookmaker. Which bookmaker? There are hundreds of websites that have lists of all the bookmakers under the sun, this site is no exception, but I would advise you for your very first matched betting to pick a bookmaker that offers the smallest size free bet. Why? Well, it is just common sense really to start with the small offers and work your way up to the juiciest ones, get some practice first so that if you make a mistake (hopefully this will not happen), it will cost you less. Agree? And by the way when I say it will cost you less I don’t mean that you will lose money, but not winning the maximum possible amount is in fact losing, so that is what I meant…

The term “matched” means that the bookmaker matches the amount that you bet for the first time with them, up to a certain amount of course. Now, to state the obvious, the bookmaker is not going to simply give you a free bet for absolutely nothing, they want you to place a bet with them first and only then they will honour their promise. This first bet (or a series of bets in some cases) is known as the qualifying bet, that is the bet that gets you the free bet, and remember it is the free bet that you are after. At this point probably you are getting worried, as the word betting was used a lot in the above paragraph. Do not worry and read on.

To place the qualifying bet you will need to have done two things beforehand.
1) Open an account with the bookmaker and make a deposit. The deposit should be from a debit card in your name (no other deposit methods qualify, like for example Moneybookers or other e-wallets). You should deposit only the amount that is required to extract the free bet. To determine this amount, read point 2 below.
2) Read the terms and conditions of the bookmaker regarding the free bet offer. Do not take anything that you have read on any website for granted, be warned that the bookmakers change the rules as and when they wish, so if website A tells you this bookmaker’s terms are this and this, please double check the information or better still, don’t read it at all and instead go straight to the bookmaker’s website and read the terms and conditions in real time. This is how you find out how much you should deposit in order to be able to complete the requirements and get hold of the elusive free bet. Be warned that requirements can vary significantly from one offer to the next. You could be asked to bet above certain odds, to bet X number of times before you can withdraw, to bet X number of times before the free bet (or the second free bet) is credited, etc. etc. Make sure you are aware of all that before you even deposit, if you find that the requirements make it too hard/not worthwhile, simply move on to the next bookie. Maybe this one will change its policy in the future, so not everything is lost, make a list of the ones that you skip (for whatever reason) so that you can check for any changes later (say once a month).

I hope this doesn’t sound as too much work, because it really isn’t. Reading several paragraphs of text (the T&C’s small print) should not be regarded as work. If you believe that it is too hard, remember – matched betting is not for impatient or lazy people.

OK, you have read the small print and have deposited X amount of your money into your brand new betting account. What do you do next?

Before you place any qualifying bets you need to make sure that you are not actually taking any risks while betting. Yes, you read this correctly, you will not be betting, you will be “matched betting” which is something completely different as far as risk is concerned. So to make the bet risk free you will need to offset the bet by placing another bet covering all the other outcomes that the initial bet does not cover. As this sounds a bit vague (even I don’t like it, and I’ve just written it) I will use a simple example:

Champions’ league football match: Barcelona v. Chelsea
Barcelona odds: 1.8
Chelsea odds: 4.6
Draw odds: 3.8

I am using decimal odds here, and this is done on purpose. Say you want to place a qualifying bet on this match. It might not be possible, as there are certain criteria that need to be met first (explained later), but let’s assume the match qualifies and the qualifying outcome is the draw. So you will be betting on the draw using the amount you just deposited in your account with the bookmaker. But you don’t want to bet, you need the bet to be risk free so that you can collect the free bet bonus afterwards. This simply means that you have to cover the other outcomes-in this case, the home win and the away win-by betting on them elsewhere. The best and in fact the only way to do this is by placing a lay bet on a betting exchange. A lay bet is a bet that something will NOT happen, so laying the draw means you are betting on both the home win and the away win. A betting exchange is a website (behind it is a registered company of course) that provides the environment in which one person can bet against another person anonymously on any given event or outcome, the 3 biggest advantages of betting exchanges are: better odds, the option to bet against an outcome (and not only for an outcome, as with bookies) and no maximum bet limits.

So you need to lay the draw (in the above example) on a betting exchange. This means that you need a separate account with a betting exchange and you need some funds deposited in it as well. The good news is opening an account takes minutes and the betting exchange itself will give you a free bet for becoming a customer of theirs. There are a few betting exchanges, but the one that I would recommend using full time when match betting is Betfair. Later you can open accounts in the other exchanges too, but just to take advantage of their own free bet offers (don’t forget to read the small print, as ever, make a habit of it).

So the framework of the matched betting consists of having a Betfair account to offset any qualifying bookmaker bets by laying the same outcome (betting against it). Once you “exhaust” one bookmaker‘s offers, you simply move on to the next one (becoming in fact a betting parasite, but don’t expect me to feel sorry for the “poor” bookmakers). Or your can “work” several bookmakers at a time, as long as you have sufficient funds to cover all your bets. Now let’s move on to the particulars.

The event/sport – which one? It doesn’t really matter, as long as it is not excluded by the bookmaker’s T&C (short for terms and conditions). Most of the time it will be football (or soccer, as known in the USA, Betfair list it as soccer too).

The odds. In the above example I used decimal odds, because that is the format that Betfair and the other exchanges are using. Since the risk offset bets (the lay bets) will be placed on Betfair, this means that for all your matched betting activities the only odds that should be used are decimal odds (also known as European odds). Whoever is not familiar or comfortable with decimal odds should not start to match bet before he gets familiar/comfortable with this format. This is a must. Usually people who are less familiar with decimal odds are those from the UK (where fractional odds are popular for some unknown reason) and those in the USA (where American odds are being used for equally unknown reasons). And don’t get me started on the Hong Kong, Malaysian or Indonesian odds…Anyway, I will justify my sarcasm regarding other-than-decimal-odds by saying this: decimal odds are the only popular ones that use small enough fractions (2 digits after the decimal point), which makes them the only solution when exact odds are required, hence their use on the exchanges, and thanks to Betfair and the other exchanges decimal odds are getting more and more popular and quite rightly so. Bookmakers offer decimal format too, so that is the format used when match betting.

On the subject of odds’ value – in the above soccer example we said that the draw qualifies for the matched betting, with odds of 3.8 at the bookmakers. Now how did we find out that the draw in this particular match qualifies for our bets? There is one thing and one thing only to consider here – the bookmakers’ odds of any given outcome of any event should be as close as possible to the available lay odds for the same outcome of the same event on Betfair. Ideally the lay odds should be a bit lower. Now why is that? Because we want not to lose, meaning we want to collect all our wagers back whatever the outcome, and by doing so meeting the bookies’ requirements for the release of the free bet. So our aim with the qualifying bet’s odds is to lose as little as possible, even better-to break even or even win a little. If we do win on our qualifying bet this simply means that we have found an arbitrage betting situation, thus in fact we have taken advantage of 2 risk-free methods at the same time. Because arbitrage actually brings profit, it can be done on its own, but as the aim of this article is to explain matched betting we will just say that arbitrage could complement nicely the placement of qualifying bets.

I am sure by now you, the reader, start to get a more complete picture of the whole process. The hardest part of matched betting is finding the events that meet our odds criteria. The good news is there are now many free websites that compare odds in real time (they update by the minute or even more often, how convenient is that), and this makes the whole thing possible really, because let’s face it, if we were to manually sieve through all the bookmaker’s markets and then compare the odds with the same markets on Betfair, the whole process would become impractically time consuming and therefore impossible. Long live the Internet then (and the odds comparison websites)!!!

Maybe here will be the best place to explain some calculations that need to be done. Now, first of all, I have prepared an MS Excel spreadsheet whose sole purpose is to perform all the calculations for you once the odds and the stakes are entered. A download link will be provided below.
In our soccer example (from above) the draw was priced at 3.8 at the bookmakers. In order for it to become our selection for the qualifying bet it must be priced as closely as possible on Betfair’s lay column. Let’s say it is priced 3.7, or 3.8, or 3.9. And let’s say our qualifying bet must be £10 and Betfair commission is 5%. The 3 scenarios are:

If lay odds are 3.7
This is actually lower than the bookmaker’s price, and it is the best scenario for us. How much do we need to lay, assuming our bet with the bookie is £10 at odds of 3.8? We have to work out the lay stake, the lay liability (we should have enough funds in our Betfair account to be able to cover the whole liability of any lay bet that is placed), we have to not forget Betfair’s 5% commission on winning bets. After all the calculations are completed the result is:
Lay stake: £10.41
Lay liability: £28.11
Profit/Loss:
if bookmaker bet wins: -£0.11,
if lay bet wins: -£0.11

I have not included any formulas here, as I said all the formulas are embedded in my spreadsheet and once the bookmaker bet size and the odds and the lay odds were entered, I got the above result instantly. As you see, the final profit/loss is automatically equalised, so whatever the outcome we end up with the same profit/loss.

If lay odds are 3.8
Lay stake: £10.13
Lay liability: £28.37
Profit/Loss:
if bookmaker bet wins: -£0.37,
if lay bet wins: -£0.37

If lay odds are 3.9
Lay stake: £9.87
Lay liability: £28.62
Profit/Loss:
if bookmaker bet wins: -£0.62,
if lay bet wins: -£0.62

As you no doubt have noticed all the 3 above examples end up with a net loss on our qualifying bet. We lose even if the lay odds are 0.1 lower than the bookmaker odds; this is because of the 5% commission. Obviously the higher the lay odds the bigger the net loss is. Ideally the lay odds should be either lower or just a fraction higher than the back odds, just as in the above 3 examples. That is why patience is required when hunting for qualifying events/odds.
I am sure you know what follows after this. Let’s say we laid at 3.8 after backing (betting for the outcome) at 3.8. We are about to lose £0.37 on our £10 qualifying bet. Why would be accept a loss? Because once we place the qualifying bet the bookmaker will credit our account with the free bet that we are after (once the event/market is settled that is, in some instances could be within 24 hours of bet’s settlement).
Once the free bet is credited…We simply repeat the process once more, only this time we use the free bet and not our own money, again we lay at Betfair at favourable odds to offset the bet, and all we have to do then is wait for the bets to be settled.

Important: The proportions between the back bet and the lay bet are different this time, as we are using the free bet and not our own money. Again this is all done for you automatically with my free spreadsheet, so no need to write any formulas in this guide. Just for informative purposes though (these are not exact figures) – the lay bet will be around two thirds of the lay bet of the qualifying bet, so this time we are laying roughly a third less. This is when the bookmaker does not return our free bet. Amazingly, there are bookmakers that do return the free bet. If so, the lay bet will be the same as with the qualifying bet. Again, this option is covered in the free spreadsheet.

So what would be the end result, I hear you ask? In our example above, we will lose £0.37 on the qualifying bet. Let’s assume that when the free bet is credited we place it on an event with exactly the same odds-3.8, and lay it with the same odds-3.8. Then, the net profit will be £6.91 (calculated by the spreadsheet), we deduct the £0.37 loss on the qualifying bet and the net result is £6.54. This means our retention percentage on the free bet (£10 in this example) is around 65%, which is not bad at all.

Important: The retention percentage could differ considerably, but is entirely under our control. It is influenced by the odds, but in two different ways. First it is the difference between the back odds and the lay odds, the lower the lay odds the better (if lay odds are not low enough we simply don’t get involved with that event and look for another one). Secondly, not all odds result in the same retention % – the principle here is very simple, the higher the odds, the better the retention % will be. By this I simply mean that if you find an event that offers 2.3 at the bookies and 2.2 to lay at Betfair, but you spot another one – 4.5 at the bookies and 4.4 to lay at Betfair, you should choose the second one, the one with the higher odds, as it will be that one that will result in a better retention/profit. So even if the margin between back and lay odds is a bit smaller, but the odds are considerably higher, the higher odds event should be chosen. Again, I am just being informative here, as the exact figures will be at your disposal once you download my free spreadsheet and enter odds and stake – the table will show you all the figures, so you can compare any number of events in a matter of seconds and choose the one with the highest retention potential. You will know in advance what the result is, if not happy just find a more favourably priced event, there are no time deadlines here (if any, they will be mentioned in the small print of any offer, but they are generous so will not affect you-usually you should place the free bet within a full month of it being credited, I am sure you will agree that such a timeframe is not an issue, so take your time if you need to…but do read the small print/T&C)

As I mentioned earlier, the matched betting process looks much more complicated than it really is. There is plenty of information on the subject online, including the guide that you are reading at the moment, free calculators are available (don’t forget my free spreadsheet), and there are even websites that compare bookmaker and exchange odds. So if you have never opened an account with a bookmaker, why not do it now and take advantage of all those free bet offers? For a minimal effort you can earn some money to boost your regular income, if only for a while. Please note that I never made any claims as to how much money you can make in total (if you do all the offers at any one time), and this is simply because like any other company bookmakers change their offers and the total figure is not static. Suffice to say that the figure is in the hundreds at all times, simply because there are so many bookmakers competing for your custom.

Things to be aware of (possible problems):
1. Human error – this could cost you a lot, but it is up to you to avoid it. Make sure you lay the same event that you backed at the bookmaker, make sure the event doesn’t start soon and you have enough time to place both bets (if it starts and you have placed only the lay bet, for example, you will not be able to place the back bet and will be left with an open bet, this could lead to a loss as you risk will not be offset). Make sure you are familiar with decimal odds, with the lay liabilities that you will have on the lay bets, make sure you have enough funds to cover your bets (including the lay ones, their liability increases dramatically with the increase of the odds)

2. Technical issues – internet connection issues, computer issues, loss of power etc. Remember that all the time you are placing 2 bets-one with the bookmaker and one with Betfair, so if you place one bet and for whatever reason (technical or not) you can’t place the second bet, the matched betting turns into betting and from risk-free becomes gambling. Now the 2 bets are usually seconds apart, but it pays to be aware of anything that could go wrong, at the same time do not hurry like a maniac, as this on the other hand could lead to human error.

3. Voided/cancelled bets – very rarely indeed, the bookmaker could price an event very wrong, and change the price later to the one that was intended. Your bet with them could be cancelled. When you take a price with them, if it is an obvious mistake, don’t place the bet. Sometimes Betfair voids bets as well, but this is very infrequent too (on racing events most of the time, but probably all your bets will be on soccer anyway). If you happen to have placed your 2 bets at both the bookie and the exchange, and one of them gets cancelled/voided, there is nothing you can do. You could either win or lose in this case, as you will simply have an open bet. So even if it does happen, you could still win, but let me assure you that no match bettor is put off by this, it will be almost like saying “I will never go out on the street as I might get run over by a car”.

4. The bookmaker could refuse to credit you any bonuses if they think you are using someone else’s identity. They could assume this if someone from the same address has already taken advantage of their offers. Basically they link addresses and possibly IP addresses too, so ideally you should be the first one in your household to sign up with them. Again, this is not likely, and some bookmakers don’t mind giving free bets to customers from the same address, and of course you can always ask in advance if you have any suspicions. Simply read the terms and conditions again.