Matched Betting

This guide shows you how to make a guaranteed profit at bookmakers through the technique of matched betting.

Do not expect to fully understand this guide the first time you read it. Some of the concepts take a bit of getting used to, but persistance will bring great rewards.

What is matched betting?

When most people bet, they stake £x with a bookie on a particular outcome of an event, for example, that Arsenal will beat Liverpool at the weekend, or that Chelsea will win the Premier League this season. Matched betting or bet/lay matching as it is known, on the other hand, involves acting both as the punter and the bookmaker. You place a bet both as a punter that the outcome will happen, and also offer (or lay) a bet as a bookmaker that the outcome will happen.

So how does matched betting work?

When you make or place a bet at a bookies you ‘back’ your chosen outcome at particular odds, for example, you could back Team A to beat Team B at odds of 2/1 (decimal odds 3.0). If you won the bet you would receive back your stake of £10 and £20 in winnings (total £30). If you lost, you would lose your £10 stake to the bookie.

But what if on the other hand you were the bookmaker, rather than the punter, and offered the same odds to someone for the same outcome? Now, if Team A won the match you would have to pay that someone £20 in winnings, and if Team A did not win you would gain their £10 stake. This process is known as ‘laying’ a bet.

Thus, if you bet on the event both as a punter and act as the bookmaker at the same time, whatever the outcome, the bet side and the lay side of the bet cancel out completely. Look at the situations below:

Outcome 1: Team A Wins

You as Punter win £20 (£30-£10 stake)
You as Bookmaker lose £20
Net Result = £0

Outcome 2: Team A Doesn't Win

You as Punter lose £10
You as Bookmaker win £10
Net Result = £0

How do I make a profit from matched betting?

Above we saw how the principle of back/lay matched betting works; that if you act both as the punter and bookmaker, whatever you win or lose as one is always cancelled out by whatever you lose or win as the other. This might not strike you immediately as an obvious way to make money, but the technique can be used to extract guaranteed profits from bookies' sign-up offers and recurring promotions, offered as an incentive to new and existing account holders. This guide will concentrate on free bets as they are the most common and illustrate well the concepts involved.

Free Bets

A free bet is generally awarded to a punter after they have made a qualifying bet at the bookie. The meaning of ‘qualifying’ varies from bookie to bookie but typically stipulates the minimum bet amount and odds, for example, you must stake £25 or more at odds of evens (2.0) or above. Through using the technique of matched betting (as described below) you can lock in a certain profit, ranging roughly from 95% to 75% of the free bet amount depending on the exact bets made and the terms of the bookies offer; specifically whether the free bet stake is returned or not (see below).

Let us take the example we used earlier, but instead assume that you as the punter have already made a qualifying bet and so are not staking your own money, but are staking a £10 free bet which has kindly been given to you by the bookie. As you can see, irrespective of the outcome, your profit is £10 (the free bet size).

Outcome 1: Team A Wins

You as Punter win £30 (as the stake was free there is no need to deduct this from your profit)

You as Bookmaker lose £20

Net Result= £10 profit

Outcome 2: Team A Doesn't Win

You as Punter lose £0 (as the stake was free losing it incurs you no loss)

You as Bookmaker win £10

Net Result = £10 profit

So why have we said above that you can expect to secure a guaranteed profit of 95% to 75% when our above example shows a guaranteed profit of £10 (100%). The answer to that is in our reality check below.

Reality Check

Does this sound to good to be true? Well it is and it isn’t. There are a couple of minor points worth bearing in mind. The neat examples used above to illustrate the concepts of making profit through back/lay matched betting do not reflect reality 100%.

Firstly, in order to lay bets you need to use betting exchanges, and these generally never offer lay odds which are the same as those offered by the bookies. Secondly, there is normally always a commission of between 1% to 5% payable on winnings at the betting exchange. Thirdly, sometimes free bet offers do not return the stake with winnings. The above examples assumed exactly the same back and lay odds, 0% commission and the free bet stake returned with winnings. Nevertheless, even with these factors, it is still possible to use the bet/lay technique to qualify for the free bet with minimal loss, and retain most of the free stake money without any risk at all. This is why we gave the figure of 95% to 75%.

Matched Betting: A Practical Example

Now that you should have a grasp of the basics, like with many things, the best way to learn is to try it out for yourself, but don’t worry, we will be here to guide you each step of the way. We suggest that you work your way through the steps below. They will be necessary reading for your first time and may also be worth bearing in mind when taking part in subsequent offers.

Step 1 – Find a Free Bet

The first step is to find a bookmaker who is offering a free bet. Luckily, we have comprised our own list so it shouldn’t be hard. Just click here.

We recommend Coral as a good bookie to start with. At the time of writing (01/12/05) they are offering a £10 free bet which is credited after you have made a £10 qualifying bet on any sporting event, and is available through this link.

We will proceed on the basis for the rest of this guide that you are using Coral as the bookie. Of course if you are using a different bookie simply substitute the relevant parts, as the same principles and systematic process should apply.

Step 2 – Check the Terms and Conditions

It is a must, that you check the Terms and Conditions of the bookies offer. In particular check (a) whether stakes are returned with free bets, and (b) whether there is a bet through requirement before you can withdraw. The answer to these questions will determine what percentage of the free bet amount you can expect to secure, what odds you should be looking to match and whether you are likely to be able to make more profit by setting up the bets to lose at the bookie and win at the betting exchange.

In the case of Coral, at the time of writing (01/12/05) the free bet stake is returned with winnings (if any) and there is no bet through requirement.

Step 3 – Sign up at the Bookie

After checking the Terms and Conditions sign up at the bookie with the offer (i.e. Coral), making sure to keep a record of your username and password, as they’re very easy to lose; particularly as over the weeks you join more bookies. When signing up also if possible set your preferences to decimal odds (i.e. 1.2). It is much easier to compare decimal odds when looking at different sites. Those bookies that don’t ask for your preference when creating a new account often have an option on their main page.

Step 4 – Sign up at a Betting Exchange

In order to lay bets you will need to sign up to a betting exchange. There are several different exchanges, but the two generally regarded as the largest are Betfair and Betdaq. We recommend Betfair, as it generally has more money flowing through it, which means there is a greater chance of finding good matching odds.

Step 5 – Download Spreadsheet

Next download our matched betting spreadsheet, which you can find here.

The spreadsheet includes a sheet which allows you to easily make the calculations required. It also includes a sheet which you can record your username and passwords on, a sheet to keep track of all the matched bets you do, and a sheet containing a list of other bookies with free bet offers.

(The 'Calculator' part of the spreadsheet is based on a spreadsheet available on the Money Saving Expert forums, but has several notable editions.)

Step 6 – Research the Qualifying Bet

You are now ready to research and make the qualifying bet. The aim is to find a bet that you can match (same or very similar odds) with a ‘lay’ at the betting exchange so that you will lose the minimum amount of money.

One of the best sports at first is football as there is usually plenty of liquidity (money involved) and the odds do not change too quickly. As we mentioned earlier generally betting exchanges never offer lay odds which are the same as those offered by the bookie, but it is worth spending some time looking odds that are as close together as possible; the closer they are together the less money will be lost on the qualifying bet. Often good matches are posted in the bookie threads on the discussion forum so you may want to check first.

In very rare cases you may find lay odds which are less than the back odds. This situation is referred to as an arb, and instead of guaranteeing a small loss, you will guarantee a small profit.

It is important to stress the point that you do not chose opposing outcomes, e.g. if you were to back Arsenal to beat Liverpool , you lay Arsenal to beat Liverpool , not Liverpool to beat Arsenal. This is because when laying bets you are acting as the bookmaker and make a profit when the outcome does not happen, so you are in effect gambling on that outcome not happening.

As an example, let’s say that you can back Arsenal to win at 1.4, and lay Arsenal to win at the betting exchange 1.45.

Now load up the spreadsheet, and under the 'Calculator' sheet you will see the "Matched Bets" section. Enter £10 for the Back Stake, as this is the size required for the qualifying bet at Coral. As you are making the qualifying bet with your own money enter £0 in Of Which Free, as this only applies when making a free bet. There is also no stake forfeit on the qualifying bet, so enter the Stake Forfeit as £0. Taking the odds we found above, enter the back odds as 1.4 and the lay odds are 1.45. There is no commission at the backing bookie (Coral), so enter 0 for this, but there is a commission at the betting exchange. Assuming you are using Betfair this is 5%. It is possible to get a discount on the rate of commission at Betfair, but only if you are an active better.

The spreadsheet will work out all the numbers for you. Importantly you will see highlighted in red a lay stake which equals £10.00, and the lay risk will be calculated as £4.50. The Net Profit shows you that whatever the outcome your loss will be £0.50.

At the betting exchange underneath the lay odds you will see a number in pounds, which is the amount of stake money actually available at the betting exchange. It is important to make sure that this amount is greater that the lay stake as calculated by the spreadsheet.

Step 7 – Deposit at Bookie and Betting Exchange

You will now need to deposit your £10 at Coral, and deposit an amount greater than your lay risk (£4.50) at the betting exchange. A common mistake is people think that they need to deposit a sum equal or greater than both the lay stake and lay risk combined, which is incorrect. It is the lay risk which calculates what you as bookie would be required to pay out to the person acting as punter, i.e. the loss you must be able to cover. We have said that you should deposit an amount greater than your lay risk is it allows flexibility in case the odds were suddenly to change.

Step 8 – Place your bets

You now need to place your bets, and this is the point at which you must be most careful as mistakes can be quite costly (particularly later with larger bets). First place the bet at Coral but do not confirm it; simply leave the window open at the final stage; a function which is available at all bookies. Then click on the relevant lay odds at the exchange, and enter the value of £10.00 (you lay stake as calculated by the spreadsheet) into the stake box. The exchange will then calculate your risk which should be equal to £4.50; the amount the spreadsheet calculated as your lay risk. Return to Coral and confirm your bet, then back to the exchange and confirm the lay. Finally, check your account details at both sites to make sure (1) the right bet has been placed, (2) the amounts are right, and (3) you have backed and layed the same outcome.

If everything is OK you can sit back and wait for the event, and for the free bet to be credited to your account. After the event, you will either have an increased balance at the bookie or betting exchange depending on the outcome of event.

Step 9 – The free bet

In order to extract the money from the free bet you simply need to repeat the process with another event. In some instances the free bet is credited after you have placed the qualifying bet but before the event you have bet on, in which case it is possible to place the free bet on the identical event/outcome etc.

For the Coral £10 free bet, using the spreadsheet again you would enter your back stake as £10 again, but this time you would also enter £10 in Of Which Free. Using the same event and odds above, you will now see that whatever the outcome of the event your net profit will be £9.50.

Thus we would have a guaranteed loss of £0.50 on the qualifying bet, and a guaranteed profit of £9.50 on the free bet, for a total profit of £9.00; simple!

At Step 2 (Terms & Conditions) we said that the Coral £10 free bet stake is returned with winnings, and that there is no bet through requirement, but it is useful at this point to explain how such factors should affect your approach.

If you return to the spreadsheet and leave everything the same as above, but now enter £10 for 'stake forfeited' you will notice a drastic reduction in your net profit to £2.71. Where the stake is forfeited the way to maximize your profit is to the find high matching odds, i.e. 4.5+, but the higher the better. For example, by replacing the odds of 1.4 and 1.45 on the spreadsheet with 4.5 and 4.6 you will see the net profit increases back to £7.31. Where the free bet stake is forfeited you should be able relatively easily to obtain a profit of approximately 75% of the free bet amount.

If the bookie has a bet through requirement before you can withdraw the free bet money and winnings, then it is a good idea to match at high odds with the intention to lose at the bookie and win at the betting exchange. By doing this, you will hopefully avoid having to place several matched bets to meet the requirement, each time making a small loss before you can cash out.

What are the Best Bookies to Start With?

We have suggested that you start with Coral by following the stages we have laid out above. Once you have done Coral it is best at first to continue with the bookies that offer free bets, as these will require little investment on your part and will allow you to build up your bankroll. A comprehensive lists of bookmakers currently offering free bets is found on our site Free Bets, including the likes of Sean Graham, SportingOdds, Stan James and Totesport.

Once you have a larger bankroll having claimed many of the free bets, you should consider bookies which offer percentage deposit bonuses. An explanation of deposit bonuses is found directly below.

Bonuses other than Free Bets (Deposit Bonuses)

A lot of bookies either or in addition to offering free bets also offer percentage deposit bonuses, for example, if you deposit £100 they will credit your account with a 20% (£20) deposit bonus. Almost certainly they will have a bet through requirement associated with them that will encompass the deposit and the bonus, e.g. if you were to make a deposit of £100 and received a 20% bonus of £20 you may have to bet through (commonly 3 times) £120 at specified odds or greater before a withdrawal can be made from the bookie.

There are a number of ways you could approach extracting the free money from such a bonus, and the best way to an extent depends on the size of the bet through requirement. If it is small, then making several small matched bets with low matched odds may secure the greatest profit, but where it is quite large, arguably the best way is to attempt to lose at the bookie to avoid multiple losses incurred with making several matched bets to satisfy the bet through requirement. Therefore, you would bet both your deposit and bonus amount all at once. The spreadsheet allows you to calculate how much money you can extract, for example, given the example above you would enter the Back Stake as £120, and Of Which Free as £20.

What can go wrong?

There are only two real things that can possible go wrong. The first is human error, for example, entering the wrong odds, or not backing and laying on the same outcome. This, however, with concentration and checking should be avoided. The second is that some bookies reserve the right to cancel bets if they have made a ‘palpable error. Again, however, this is rare, is in most times obvious, and is more likely to arise when you are looking for Arbs, so doesn’t warrant any further discussion here.

(This guide is supplied courtesy of our partner site Bonus Baggers and can be found at www.bonusbaggers.com/matched-betting).