If you're anything like we were when we first considered doing matched betting, the Ladbrokes worked example would have caught your attention but at the same time left you with more questions and a possible need to have a better understanding of the entire matched betting process before diving in.
For instance, it took us a while to grasp exactly how betting exchanges, such as Smarkets, worked in comparison to traditional bookmakers. It also took us a little time to fully understand the concept of a lay bet as it was just so counter-intuitive to us. No one is used to betting against a team, yet this concept is vital to grasp if you are interested in doing matched betting.
In this Matched Betting Explained section we delve right into the mechanics and concepts behind matched betting, as well as get to grips with useful betting terminology and jargon.
Here’s a quick summary of the key points you will learn about by reading the Matched Betting Explained section:
- Every bet has two sides: A back bet and a lay bet.
- Back bet: A bet FOR a specific outcome to happen. An example of a back bet is betting for Manchester United to win.
- Lay bet: A bet AGAINST a specific outcome from happening. An example of a lay bet is betting against Manchester United to win (which says Manchester United will not win and will either lose or draw).
- Bookmakers: At a bookmaker, such William Hill, or Ladbrokes, it is ONLY possible to place back (for) bets. Bookmakers give out free bets to their customers. Matched betting takes advantage of free bets to guarantee profits.
- Odds: a measure of how likely an outcome is to happen. For example if Man United’s odds to win are 2.0 and they are playing Everton who have odds of 6.0 to win, these odds suggest that it is expected that Man United are more likely to win the game than Everton are. For matched betting we prefer to use decimal odds rather than fractional odds.
- Stake: The amount of money placed on a bet. E.g. Placing a £10 stake on Man United to beat Everton at odds of 2.0.
- Returns (of a back bet): The amount of money the bookmaker returns to a customer if their back bet wins. Returns consist of the original customer’s stake (e.g. £10) PLUS their winnings (e.g. £10). Returns in this example would be a total of £20.
- Liability: The amount of money the bookmaker, or the person agreeing to the other side of a back bet (i.e. the lay bettor), will have to pay a customer, or back bettor, in winnings if the back bet does win. All lay bets have liability. The amount of liability depends on the odds of the event. The higher the odds the higher the liability.
- Exchanges: At a betting exchange, such as Smarkets, it is possible to do BOTH back and lay bets. Betting exchanges are the only place where it is possible to lay (bet against) an outcome. The point of a betting exchange is to enable random people to bet with each other without having to worry that the other person isn’t going to pay up on the bet if they lose. For this service a betting exchange takes a small commission from their users’ winnings (Smarkets’ commission is 2%). You can think of a betting exchange as being a marketplace for people to ‘exchange’ a bet between them, similar to how Ebay is a marketplace for people to ‘exchange’ goods between them. For the purpose of matched betting we only use an exchange to place our lay bets.
- Liquidity: When placing a lay bet at the betting exchange it is important to consider the amount of liquidity available – especially when we are matched betting. Liquidity is considered to be acceptable when it is at least double your stake amount (e.g. if your lay stake is £10, acceptable liquidity would be £20). When liquidity is larger than double your stake amount then it is considered to be very good (e.g. if your lay stake is £10, a good liquidity would be £100). Liquidity is considered bad (low) if it is less than double of your lay stake amount (e.g. for a £10 stake, bad liquidity is £19 or less). For matched betting purposes we always avoid placing lay bets when the liquidity is bad. Instead we just find an alternative game, race or event to bet on that has better liquidity. For matched betting it is vitally important to check liquidity before placing a lay bet at the exchange.
PREFER TO JUST DIVE RIGHT IN TO MATCHED BETTING?
Although we do recommend everyone to at least skim-read this matched betting explained section we also appreciate lots of people may prefer to just dive in and 'learn-on-the-go'. If this is you then you can choose to book a free 1-to-1 personal appointments with us to learn matched betting or you can head over to our free online matched betting guide to get started by yourself.
If you’re worrying that you didn’t quite understand some (or any!) of the matched betting concepts and terms we mentioned above, you really don't need to. Below we go through everything in lots of detail using easy to follow examples that we hope most people can easily resonate with. Although reading the matched betting explained section in full will take a bit of time, it is well worth the effort, especially if you're interested in matched betting for the long-term.
MATCHED BETTING EXPLAINED CONTENTS:
(click titles to skip to that relevant section)
- Every bet has two sides.
- At a bookmaker you can ONLY place back (or for) bets.
- How betting works through a bookmaker.
- What if there was an alternative to the bookmaker?
- What is a Betting Exchange? A place where you can do lay (against) bets.
- Understanding Liquidity at the Betting Exchange.
- Returning to the bookmaker, as they give out free bets!
- Moving from mug betting to matched betting.
- Considering liquidity at the exchange when matched betting.
- Using matched betting to make a guaranteed profit from a bookmaker free bet.
- Long-term, regular and on-going profits through matched betting.
Imagine you are at a fairground with your best friend Brian and there is one of those game-stalls where you have to throw three hoops over a bottle to win the grand prize. Brian spots the game and says to you “I bet you I can win that grand prize – easy!”. You at this point would likely laugh and say “I bet you can’t!”
There are TWO sides to this bet.
Brian is betting that he can throw exactly three hoops over the bottle and win the grand prize. Brian is betting FOR a very specific outcome to happen. A bet FOR a specific outcome is called a BACK BET.
You on the other-hand are betting that he will NOT be able to throw exactly three hoops over the bottle and will therefore either throw two hoops over it, one hoop OR no hoops at all. You are betting AGAINST the specific outcome that Brian is betting for. A bet AGAINST a specific outcome is called a LAY BET.
Innately every bet must have two sides. In betting terminology these two sides are called a back bet and a lay bet.
Let’s look at some more examples to help clarify:
You: I bet I can go for a run every day this week!
Brian: I bet you only go twice!
Which of these is a lay bet? Actually neither are! They are both back bets. Can you see why?
It is because Brian and you are both betting FOR a very specific outcome to happen. Although the bets are for different outcomes, they are each both still a bet FOR a very specific outcome to happen. If you went running for four days that week you would lose your bet, but Brian would also lose his bet as he specifically said you would go twice.
To LAY your bet what Brian should have said was:
“I bet you don’t go for a run every day this week”.
In this case Brian would have been betting directly AGAINST the specific outcome you were betting for and if you ran one day, two days, three days, four days, five days or six days (anything other than the 7 days in the week), you would lose your bet and Brian would win.
Here are some more examples of back bets and lay bets – just to help clarify.
You: I bet Meghan Markle will get pregnant before she and Prince Harry get married.
Brian: No, I don’t think so. I bet she won’t. Definitely not.
Brian: I bet I can eat all 10 slices of this pizza in one sitting!
Mandy: I bet you only eat 6.
You: Haha! No way, I bet you can’t eat all 10. You’ll eat 9 slices or less.
Brian: I bet Red Rum Jr. will win the Grand National hands down.
You: I bet Red Rum Jr. won’t win the Grand National, it will be another horse.
Mandy: But which horse?
You: No idea – I just know it won’t be Red Rum Jr.!
We appreciate that it is technically possible to rephrase any type of bet into the other type the important to point to grasp here is that no matter how you phrase any bet it will always have a direct opposing or against bet associated with it.
Every bet has two sides - a back (or for) bet and a lay (or against) bet.
Always. There are no exceptions.
Bookmakers such as Coral, William Hill and 888 Sport only offer their customers the ability to place back (or for) bets. At the bookmaker a person can only ever bet FOR a specific outcome to occur. There is never the option to place a lay (against) bet.
Why is this?
Well because the bookmaker is the one laying (betting against) their customers. The bookmaker is the one taking the second side of every bet.
For example let’s go back to your friend Brian.
Brian really loves his footy and loves to boast about his amazing knowledge of football ALL the time. (He can drive you a bit mad with it sometimes in fact!). He decides to ask you if you fancy taking his bet for a tenna that Chelsea will beat Manchester United this weekend.
Let’s break down what Brian has just asked you...
He is asking whether you will form an agreement with him where if Chelsea win you will give him £10 of your money but if Chelsea do not win (and consequently lose or draw) that he will give you £10 of his money. He trusts as his friend that you will give him the £10 if Chelsea do win and knows you would trust him to hand over his tenna to you if he loses.
If you decided to agree to take this bet on then Brian would be backing (betting for) Chelsea to win for £10 and you would be laying (betting against) Chelsea to win for £10.
However, you are not at all interested in risking your hard-earned money on silly football bets and tell Brian so.
Who can Brian find that would be willing to lay (or bet against) him instead? Well the first ‘person’ Brian would think of would of course be an official bookmaker. The sole purpose of a bookmaker is to agree to lay (or be that second side of) peoples’ back bets.
Mug bettors such as Brian are happy to use William Hill or another bookmaker because they know not only will they agree to lay their bet, but they can also be trusted to give him their money if they do win as the bookmaker is a formal business.
Brian knows there is a William Hill a ten minute walk down the road so decides to pop down there to do his bet there instead...
As Brian arrives outsides the William Hill shop he notices a big sign in the window saying “Special on Chelsea to win at evens” (which is 2.0 in decimal odds). These odds are referred to at the bookmaker as the back odds.
Brian immediately thinks ‘Great! That’s exactly the same bet I wanted my friend to take! If I bet £10 and win I get an extra £10 in my pocket. If Chelsea don’t win I will lose my £10. I really think Chelsea will win so I’m willing to take that risk’.
Brian’s £10 is called his stake. We specifically refer to this money that is being used to place a back (or for) bet at a bookmaker as the back stake.
So if Brian decides to go into the William Hill shop and place his £10 back (or for) bet on Chelsea to win at odds of 2.0 what does this mean and how does the agreement between Brian and William Hill actually work?
When William Hill take Brian’s £10 back stake at back odds of 2.0 for Chelsea to win they are agreeing with Brian that if Chelsea do win then they give him RETURNS of £20. Brian's RETURNS are made up of his original £10 back stake PLUS his WINNINGS – which in this case are also £10.
How do the bookmakers calculate what his RETURNS and WINNINGS will be?
Well for the RETURNS they multiply his back stake by the back odds;
Then they take off the original back stake amount from his ‘RETURNS’ to calculate his ‘WINNINGS’;
Below is a table showing the returns and winnings for a £10 back stake but at varying back odds. This will hopefully help clarify the calculations the bookmakers are making.
Every time William Hill or any other bookmaker ACCEPTS a back bet from a customer what they are actually doing is agreeing to take the lay (or against) side of the bet. (Remember every bet has two sides).
When a bookmaker does a lay bet against a customers back bet they are accepting that if the customer does win then they will therefore lose, and that they then will be required to pay out the winnings to that customer as well as return the customer's original back stake.
IMPORTANT! Anytime they agree to lay a customer’s back bet William Hill are said to be LIABLE for that customer’s winnings.
Any lay bet a bookmaker does must have liability.
IMPORTANT! Liability is the amount of winnings the bookmaker will be required to pay to the customer if the customer wins their back bet (or the bookmaker loses their lay bet).
Going back to Brian, if he places his £10 back bet on Chelsea to win and William Hill accepts his bet, then automatically William Hill are laying his bet and will have a liability of £10 (i.e. the winnings part of the returns they will be required to pay Brian if Chelsea win).
Going back to the returns and winnings table again...
It is easy to see that as the back odds increase so too do the winnings for the customer. Consequently so too does the liability for the bookmaker (who is laying the bets).
IMPORTANT! The higher the odds the higher the customer’s winnings and consequently the higher the bookmakers liability is. Liability is an important concept to understand in regards to lay betting. Lay bets ALWAYS have a liability. How high the liability is depends on the odds.
Continuing with our example...
If Brian decided to do a second back bet for £10 on Crystal Palace to draw with Newcastle at back odds of 4.0, William Hill would then have a total liability of £40 to Brian. £10 liability from the Chelsea bet and £30 liability from the Palace bet.
If Brian wins both his bets, William Hill will have to return each of his £10 stakes to him plus his £10 winnings from the Chelsea game, plus his £30 winnings from the Palace game.
If Brian loses both his back bets, then William Hill does not have to pay out their liability of £10 and £30 (i.e. Brian’s winnings) and instead they get to keep Brian’s two £10 stakes.
Here's an overview image of Brian's first bet and what will happen depending on the outcome of the game:
Here's an overview image of Brian's second bet and what will happen depending on the outcome of the game:
For the purposes of matched betting it is really useful to understand the concepts of returns, winnings and especially liability.
In fact we recommend to read this section over again if you can just to digest it fully. It's that useful!
If you do have any questions up to now please feel free to like our page on Facebook and drop us a message; or email email@example.com - we’re always happy to help.
Just as Brian is about to go into the William Hill shop a voice shouts,
“Hey, you want to bet on Chelsea? I’ll give you better odds than William Hill can. I’m certain Chelsea won’t win today! They’re due a run of bad form! My name’s Mick by the way.”
Brian laughs and says “Oh yeh Mick, what odds would you give me?”
Mick smiles and says “I’d take a bet for £10 at odds of 2.5 for Chelsea to win”.
Brian thinks for a minute...that is higher odds than what William Hill are offering. If he gave Mick his £10 and Chelsea win he could get £15 in winnings rather than just £10 – all for the same £10 risk. But wait a minute, who is this guy? If I do this bet how can I trust he will pay me my £15 winnings and give me my stake back? He could just run off. It’s too risky.
The truth is Brian is completely right here to be concerned, he can’t trust that he would get his stake back and his winnings from Mick. He can’t just do a bet with a random person he doesn’t know or trust...
Or can he?
Well, what if there was an intermediary? Such as a business that could facilitate this betting agreement to take place between Brian and Mick and make it safe for them both do so?
Well there is and it’s called a Betting Exchange.
A betting exchange, such as Smarkets, facilitates betting agreements between two parties.
In other words, the point of a betting exchange is to enable random people to bet with each other without them having to worry that the other person won’t pay up on the bet if they lose.
You can actually think of a betting exchange as being a marketplace for people to ‘exchange’ a bet between them safely, similar to how Ebay is a marketplace for people to ‘exchange’ goods between them safely.
As a betting exchange enables random people to bet with each other it is consequently possible to choose to do a back (for) bet OR a lay (against) bet at the exchange.
IMPORTANT! A betting exchange is the only place that offers the ability to do a lay (against) bet on an event.
So, Brian and Mick could use a betting exchange to facilitate their betting agreement.
Here’s a simplified overview of what would happen (take a minute to digest this image):
At the betting exchange if Brian places his £10 back bet on Chelsea to win at odds of 2.5 and Mick (or indeed any other random person!) agrees to his bet, then automatically Mick will be laying Brian’s bet and will have a liability of £15 (the winnings he will be required to pay Brian if Chelsea win).
Brian in this instance is the back bettor and Mick is the lay bettor at the exchange.
After Brian and Mick have placed their bets, Smarkets ‘holds’ Brian’s £10 stake and also ‘holds’ Mick’s £15 liability. Smarkets holds this money until the Chelsea game has finished (i.e. the event bet on has ended). At the end of the game Smarkets stops holding this money and transfers the correct amount of money (minus their tiny 2% commission) to whoever won the bet.
IMPORTANT! Any lay bet done on a betting exchange must have liability. Liability is the amount of winnings the lay bettor at the exchange will be required to pay to the back bettor if the back bet wins. (i.e. a lay bettor at the exchange is doing exactly the same as what a bookmaker does). Smarkets' role is to temporarily hold a lay bettors liability until the outcome of the event that was being bet on is decided.
For use of their services, which is basically ‘holding’ everyone’s money until an event ends and then transferring it to the bet winners, the betting exchanges take a small commission from their users winnings (Smarkets’ commission is just 2%). This is similar to how Ebay take a commission from their sellers when they successfully sell a product.
Going back to our example. If Chelsea were to win and Brian wins his back bet, Smarkets would return his original £10 back stake to him that they were holding, PLUS Smarkets would transfer £15 in winnings to Brian from Mick. (i.e. it is Mick giving Brian his winnings, not Smarkets. Smarkets are just the facilitator of moving Mick's money to Brian). When Smarkets do this transfer service they take a small 2% commission from Brian’s winnings for their services. £15 – 2% is £14.70. So Brian would have total returns of £24.70 (£10 stake returned + £14.70 in winnings).
If Chelsea were to lose or draw and Brian lost his back bet, Mick would NOT have to pay out any winnings and Smarkets would stop holding his £15 in liability, return it to him and then transfer Brian’s £10 stake to Mick. (Again, Mick is making money from Brian, not Smarkets. Smarkets are just moving the money between them). When Smarkets do this service they take a 2% commission from Mick’s £10 profit for their services. £10 – 2% is £9.80. So Mick would be £9.80 up from his lay bet against Chelsea.
So the Smarkets betting exchange allows Brian and Mick to do their Chelsea bet between each other without either of them having to worry about being ‘cheated’ out of any money. Smarkets holds all the money safely until the outcome of the game. Then Smarkets will pay the bet winner minus their small commission.
If you now scale this concept up and imagine loads of random people all doing bets between each other and Smarkets helping them do this, this is what a betting exchange actually is. At any point of time there are loads of normal bettors using the betting exchange to place their bets. Smarkets is holding all their money and when a game, race or event finishes passes it out accordingly.
IMPORTANT! When a lay bettor (e.g. Mick in the above example) is willing to lay a bet at the betting exchange, they need to tell Smarkets the back stake amount they are going to (or are able to) accept from a back bettor. Smarkets then calculates the lay bettors liability based on this amount, and this is the amount they take from the lay bettor and 'hold' until the end of the game or other event.
So in our example Mick would have told Smarkets that he is willing to lay a back bet of £10 (from Brian or another random back bettor) at odds of 2.50. He would write this £10 amount into Smarkets on the relevant odds amount. Smarkets would then calculate what Mick would need to pay out in liability if he lost. In this case Smarkets calculates that a liability of £15 is needed (i.e. the winnings Brian will need to receive from Mick via Smarkets if Brian's back side of the bet wins). The liability is then the amount Smarkets holds from Mick until the end of the game.
Hopefully for now you’ve taken on board that a betting exchange is basically an online marketplace for random people to exchange bets between them safely. Due to this set up people are able to be lay bettors at the exchange and basically behave as if they were a bookmaker.
If a person decides to place a lay bet at the exchange they write in the stake amount they are willing to accept to take from a back bettor. They themselves then have to accept to take on the liability amount that comes with doing the lay side of the bet. The liability is what the lay bettor will have to pay out to a back bettor if the back side of the bet wins.
Now what we need to do is look a little bit deeper into how the exchange works. We need to do this because it’s really useful to understand the concept of LIQUIDITY when using a betting exchange. You will see later that liquidity is useful to consider when it comes to doing matched betting as well.
In this section we go into a bit more detail regarding the betting exchange but only to cover a specific area that is related to doing matched betting: LIQUIDITY. There is loads more stuff we could go into about the betting exchange but for matched betting it is not really necessary.
To understand liquidity though we do need to go into a little bit more detail about how the betting exchange works:
If you imagine for a moment that the betting exchange is a physical room that’s full of random people all interested in placing and exchanging bets between each other.
Some people in the room want to place a back (for) bet for a specific outcome – in this instance for Chelsea to win a football game. As they are back bettors they want to do their back bet on the highest possible odds available – obviously because they then get more winnings from their money if their back bet wins. What are the highest possible odds they can get at the betting exchange? Well the odds that someone is willing to agree to place the opposing lay (against) bet on. If a back bettor is asking for too high odds for an outcome – no one will agree to take the other side of their bet. This is similar to if you tried to sell an Iphone on Ebay for way too high a price (i.e. well above its actual value) – no one is going to buy it and the Iphone will just sit there on Ebay - nothing will happen!
The rest of the people in the room want to place a lay (against) bet opposing a specific outcome – in this instance for Chelsea NOT to win the game. However, as they are lay bettors don’t want to accept to take too high a liability on their bet (i.e. how much they may need to pay out to the back bettor if their lay bet loses and the back bet wins). Lay bettors at the exchange prefer to agree to lay a bet on the lowest odds available. (Remember: high odds = high liability, low odds = lower liability). Consequently all the lay bettors in the room are always trying to get the backers to agree to take slightly lower odds.
What consequently happens with half the room trying to back (for) bet at the highest odds possible for Chelsea to win and the other half of the room trying to lay (against) bet at the lowest odds possible for Chelsea NOT to win is that a ‘middle ground’ of odds is formed between the two.
Let’s see how this middle ground appears on the Smarkets Betting Exchange for Chelsea:
So in this example all the backers in the room want to back Chelsea to win and they want to get the highest odds possible. The odds they are trying to push for are 2.05; 2.10 and 2.15. They could try to back at 5.0 odds but don’t bother as they know that no lay bettor would agree to take the bet at those odds. Instead they are trying to push for just that little bit better odds between 2.05 to 2.15. Some back bettors are obviously trying to push their luck more than others!
Meanwhile the lay bettors are all trying to push the back bettors to go a bit lower on their odds, and are trying to push their luck and ask if any backers will agree to odds of 2.00; 1.98 or even 1.96. Again there are obviously a few lay bettors who are really trying to push their luck.
Going back to the betting exchange imaginary 'room' we are in...
In the middle of the room there is a ‘back bettors’ waiting table and all the backers are queuing behind the odds section they are hoping to place their back bet for Chelsea to win on. Whilst they are queuing they are all holding the amount of money up that they are wanting to use as a back stake at those odds.
IMPORTANT! These back bettors queuing are waiting for a lay bettor (or lay bettors) to come and agree to take their back stake amount on those specific odds.
The image below shows this happening and is a good representation of what is going on at the actual exchange.
In each odds section the TOTAL amount of money being held up by ALL the backers waiting in that odds' sections queue is the amount of money which is shown below the odds ‘signs’ on the table (i.e. at the exchange).
IMPORTANT! This total amount of money being held up by the backers (i.e. money that is ‘available’) on an odds section is referred to as the LIQUIDITY.
So at the odds of 2.05 the liquidity is £1,633. There is £1,633 being held up by all the back bettors in this queue waiting for lay bettors to come and agree to take;
At the odds of 2.10 the liquidity is £1,299. There is £1,299 being held up by all the back bettors in this queue waiting for lay bettors to come and agree to take;
And at the odds of 2.15 the liquidity is £2,906. There is £2,906 being held up by all the back bettors in this queue waiting for lay bettors to come and agree to take.
Basically this table is being used to display to all the lay bettors in the room the bets that these back bettors want to do with them. These back bettors are waiting for any lay bettor (or bettors) to come and agree to the other side of their bet at those specific odds.
The best odds that are AVAILABLE from the back bettors for a lay bettor to choose to agree to bet on are shown in the BLUE BOX.
For this Chelsea example those best odds are 2.05.
(Remember, lay bettors are looking for the lowest odds possible to bet on as it reduces their liability. This is why 2.05 in this example are considered as the best odds available to them, as it is better than 2.10 or 2.15).
The back bettors table (i.e. the exchange) also shows the LIQUIDITY available on those best odds (i.e. the current amount of money that back bettors have put forward to bet on those odds) below the blue box.
Why do they bother to show this liquidity to the lay bettors?
The liquidity (total amount being held up by all the back bettors in that odds section queue) is to show the lay bettors how much money is readily available from the back bettors that they could agree to lay.
IMPORTANT! We mentioned in the previous section that lay bettors write the stake amount to Smarkets betting exchange that they are willing to accept from a back bettor. The LIQUIDITY under the BLUE BOX therefore shows a lay bettor the MAXIMUM amount that is readily available for them to accept from back bettors at the exchange.
For example, the liquidity on the best lay odds in the Chelsea game is £1,633.
This is the MAXIMUM amount a lay bettor could agree to accept from a back bettor.
i.e. at this liquidity a lay bettor:
- could agree to accept a £10 stake from a back bettor, or;
- they could agree to accept a £100 stake from a back bettor, or;
- a £1000 stake, or;
- a £1633 stake;
- BUT NOT a £1634 stake;
- nor a £1700 stake;
- nor a £2000 stake.
Why? Because the £1633 is all the money (at that point in time) that is available to lay bettors FROM the back bettors. There’s no point a lay bettor saying he want to accept a £2000 stake if that amount from the back bettors in total isn’t available.
It’s also VERY important to look at this from another angle:
If the liquidity wasn’t £1,633 but was just £16 on the 2.05 odds from the back bettors. (i.e. there were just 1 or 2 back bettors in the queue at the table holding just £16 between them). This would mean if a lay bettor came along wanting to accept a £20 back stake they wouldn't be able to do it. The maximum the lay bettor could agree to take on is a £16 back stake.
IMPORTANT! Even if a lay bettor comes into the room (the exchange) PLANNING to accept a £20 back bet, because the liquidity is only £16 (in this example) they can't do what they want. The maximum amount they can accept as a back bet is £16.
The key concept to take away here is that anyone who is LAY BETTING at the exchange must check the LIQUIDITY that is available on the odds they are interested in agreeing to take a bet on. The LIQUIDITY must be HIGHER than the amount that they were wanting to agree to take from the back bettors.
After talking to Mick and the possibility of using the Smarkets Betting Exchange in order to do their bet, where Brian could get better odds to back on than at William Hill, Brian needs to decide what he's going to do.
He then notices on the William Hill shop front they are advertising that new customers get £30 in free bets if they bet £10 with them, and existing customers will get a £10 free bet if they bet £10 this weekend on the football.
As a regular bettor Brian has already bet with William Hill many times so he can't take advantage of the new customer offer, but he can definitely take advantage of the existing customer offer.
He says to Mick, "mate, I'm sorry but I'm going to go with Hills as I'll get a £10 free bet with them if I do my Chelsea bet with them. I can use that £10 free bet on the Crystal Palace game to be a draw as I'm sure on that too! I appreciate the better odds your offering via the exchange, but a free £10 bet is a free £10 bet!"
Mick completely understands and wishes Brian luck - especially as he's convinced Chelsea aren't going to win and Brian will lose his £10 to Hills.
IMPORTANT! All UK bookmakers have special promotional offers for new customers and also on going offers for their good regular customers. They have these offers because there is a lot of competition between them to attract and keep punters like Brian.
The bookmakers have all sorts of offers available. One of the most popular is a Bet & Get offer. This is where you bet a certain amount with them and get another amount as a free bet.
Here are some example new customer offers from some of the main UK bookmakers:
Coral: Bet £5 and Get £20 in free bets.
William Hill: Bet £10 and Get £30 in free bets.
888 Sports: Bet £10 and Get £30 in free bets.
ComeOn: Bet £10 and Get a £10 free bet.
An important note on all of these offers is that they often have specific terms and conditions. For example, the first bet placed must be at certain odds, or on a certain game and similar. The free bet might be available for a week, or a day. The free bet might also be possible to use on any sporting event, or on a specific event. The bookmakers always explain most of the key elements of an offer clearly as they are required to by the Gambling Commission.
Brian's really happy and heads into William Hill's to do his bets. He does his £10 Chelsea bet, receives his £10 free bet and places that on the draw for the Crystal Palace game.
Whilst he's placing his free bet the cashier at William Hill reminds him that his £10 free bet is a stake-not-returned free bet.
Brian asks her to clarify this:
IMPORTANT! A stake-not-returned free bet (which is one type of free bet that bookmakers give out) is when the free bet stake is not returned to the bettor if they win. i.e. the bettor, like Brian, only receives their WINNINGS from the free bet.
In this case we know from before if Brian had bet his own £10 on the draw for the Crystal Palace game at odds of 4.0 his returns would have been £40. This £40 would have been his £10 stake plus £30 in winnings.
As Brian has now used his £10 free bet to do this, he will only receive the £30 in winnings.
It's RARE for the bookmaker to give the stake in the free bet offer. The vast majority of free bets from bookmakers are stake-not-returned free bets.
So far everything we’ve discussed have been examples of what we refer to as ‘mug’ betting – which is gambling, full of risk and basically a fantastic way to throw away money. (Can you tell we do not like mug betting!).
Even Mick who placed a lay bet against Brian using Smarkets was also mug betting – just in a different way to how he would at a bookmaker.
However, to understand the mechanics of matched betting properly it’s important that you are now familiar with all the following terms and key concepts associated with them:
- Back bet (for bet).
- Lay bet (against bet).
- Bookmaker (only offer back bets). An example of a bookmaker is William Hill.
- Betting Exchange (offer back AND lay bets). An example of a betting exchange is Smarkets.
- Odds (a measure of how likely an outcome is to happen).
- Stake (the amount of money put on a bet).
- Returns (the amount of money a bookmaker or exchange returns to a winning back bettor).
- Winnings (the difference between the returns and the original back stake).
- Liability (the amount of winnings a bookmaker or lay bettor will need to pay out to a back bettor if the back bet wins).
Now what we saw with the above with ‘mug’ Brian is that he was either:
- Placing a back bet and the bookmaker was laying the bet, or;
- Placing a back bet and Mick (or other random person) was laying the bet via the betting exchange;
IMPORTANT! As matched bettors we do NOT do either of these things. Instead we cover both sides of each bet ourselves.
How do we do this?
We place a back bet at a bookmaker, AND then we lay that same bet ourselves at the betting exchange.
This is where the term Matched Betting comes from. As matched bettors we continuously MATCH every back bet at bookmaker with its lay bet at the exchange.
Here’s some examples:
We back (bet for) Brian to eat all 10 slices of a large pizza at the “Pizza Bets Bookmaker”, then we lay (bet against) Brian eating all the 10 slices at the “Pizza Betting Exchange” (consequently saying he’ll therefore eat 9, 8, 7, 6, 5, 4, 3, 2,1, or 0 slices).
We back (bet for) Meghan Markle to be pregnant before getting married to Prince Harry at the “Celebrity Life Bookmakers”, then we lay (bet against) Mehgan getting pregnant before getting married at the “Celebrity Betting Exchange” (consequently saying she won’t be pregnant before she and Harry get married).
We back (bet for) Manchester United to win at William Hill (bookmaker), then we lay (bet against) Manchester United winning at Smarkets Betting Exchange (consequently saying that Manchester United will lose or draw).
We back (bet for) Red Rum Jr to win the Grand National at Ladbrokes (bookmaker), then we lay (bet against) Red Rum Jr. winning at Smarkets Betting Exchange (consequently saying any other horse but Red Rum Jr. will win).
SUPER IMPORTANT! EVERY TIME WE DO A BACK BET AT A BOOKMAKER WE LAY THE BET AT AN EXCHANGE. THIS IS THE ESSENCE OF MATCHED BETTING.
We can’t emphasize this concept enough!
You may be wondering now though, what’s the point in doing this? If we are laying our own back bets aren’t we technically just ‘cancelling out’ the bet altogether? We’ve bet for and against the exact same outcome – so whatever outcome happens technically doesn’t matter anymore.
Yes – let’s look at an example again.
We bet £10 for (back) Manchester United to win for odds of 2.0 at a bookmaker. We bet against (lay) Manchester United to win (and that therefore they will lose or draw) at the betting exchange at the same 2.0 odds.
What happens if Manchester United win?
Well at the bookmaker we win the back bet so we get our £10 stake back plus our £10 winnings from the bookmaker. So we are +£10.00 at the bookmaker.
At the exchange we lost our lay bet, so we had to pay someone who backed Man U at the exchange their £10 winnings. So we are -£10.00 at the exchange.
So overall we have +£10.00 - £10.00 = £0.00.
What happens if Manchester United lose or draw?
Well at the bookmaker we lose the back bet so we lose our £10 back stake to the bookmaker. We are then -£10.00 at the bookmaker.
At the exchange we win our lay bet, so the exchange gives us someone’s £10 back stake that they put on at the exchange. So we are now +£10.00 at the exchange. (For the purposes of this example the exchange doesn’t take any commission from our profit).
So overall we have -£10.00 +£10.00 = £0.00.
So yes, by matched betting we have successfully completely cancelled our bet. No matter the outcome we make.... £0.00.
The bookmaker is unaware that we have covered our bet on the exchange. To the bookmaker it appears that we’ve just placed a normal £10 mug bet like any other punter. As we seem to have placed a £10 bet with them we’ve automatically QUALIFIED to now receive a FREE £10 BET from them.
IMPORTANT! When we match a back bet at the bookmaker with a lay bet at the exchange and it results in a free bet being given to us (‘free bet unlocked’) at the bookmaker, we refer to this type of matched bet as a QUALIFYING BET.
So this is why we do our first matched bet – to UNLOCK A FREE bet at the bookmaker.
Why do we care about this free bet?
IMPORTANT! As matched bettors we care about this free bet because the free bet is how we later make a guaranteed profit!
However... before we go to the next stage in the matched betting process which involves taking advantage of the free bet the bookmaker has just provided us to make a guaranteed profit, we need to look at the Qualifying Bet in a bit more detail. There are TWO important things we need to take account of that we didn’t cover as yet. These things will also be important when we come to do our free bet.
The first thing is that exchanges take a commission for their services when your lay bet ‘wins’ at the exchange. (i.e. the against bet on the event was correct). Depending on the exchange the commission is somewhere between 2% to 5%. (Smarkets betting exchange, who we use is just 2%).
In our example above if Manchester United lost or drew with Everton and our lay bet at the exchange won the exchange transferred £10 to us for ‘winning’ our lay bet. At Smarkets Betting Exchange they charge a 2% commission, so they would have actually returned to us £10 – 2% = £9.80. This means overall we would have been down -£10 at the bookmaker and up +£9.80 at the exchange. So consequently if our lay bet had won we would have made a very small loss of -0.20p.
i.e. the Man U lose or draw Smarkets would give us -£10.00 + £9.80 = -£0.20.
The Man U winning outcome would still be the same +£10.00 at the bookmaker; - £10.00 at the exchange = £0.00.
Now as matched bettors what we want to actually do is create a situation where we BALANCE (as best we can) the small loss due to the exchange commission between the bookmaker and the exchange, so no matter what the outcome of the event is we end up in the same position. The above example is unbalanced – on one outcome we end up at £0.00, but in another outcome we end up with -£0.20.
So what can we do? Well we can use a bit of maths to ensure an equal result from all outcomes for ourselves.
This is where we use our first matched betting calculator – The Qualifying Bet (or Mug Bet) Calculator.
In the Qualifying Bet Calculator we type in what we are trying to do, which is place a £10 back bet at the bookmaker at odds of 2.0 and lay that bet at the same 2.0 odds with a 2% commission being paid to the betting exchange. This is what our Qualifying Bet matched betting calculator would then look like:
Once we input this information (which is the information we know for sure) there is an automatic calculation which spits out the amount we should use as our lay stake at the exchange in order to balance the result for us no matter the outcome of the event.
Here you can see what our Qualifying Bet Matched Betting Calculator works out for us:
So here the calculator is telling us what we need to do at the betting exchange to ensure we have the same tiny Qualifying Loss (of -10p now) no matter the outcome of the game. We should not use a lay stake of £10, but actually a lay stake of £10.10. (So 10p more).
The Qualifying Bet Matched Betting Calculator also provides a nice summary for us to explain where our money ends up being depending on the outcome of the game; and how we make the same -10p qualifying loss no matter what happens.
Let's go over this summary:
What happens if Manchester United win?
Well at the bookmaker we win the back bet so we get our £10 stake back plus our £10 winnings from the bookmaker. So we are now +£10.00 up at the bookmaker.
At the exchange we lost our lay bet, so we had to pay someone who backed Man United at the exchange their £10.10 winnings. So we are now -£10.10 down at the exchange.
So overall this works out to +£10.00 - £10.10 = -£0.10.
What happens if Manchester United lose or draw?
Well at the bookmaker we lose the back bet so we lose our £10 back stake to the bookmaker. We are then -£10.00 down at the bookmaker.
At the exchange we win our lay bet, so the exchange gives us a random person's £10.10 back stake that they put on at the exchange and then take their 2% commission from this. This means we get back £9.90 instead. So we are now +£9.90 up at the exchange.
So overall this works out to -£10.00 +£9.90 = -£0.10.
IMPORTANT! So by using the Qualifying Bet Matched Betting Calculator to do our matched betting with we have successfully BALANCED out our bets, and taken account of the exchanges commission. Now, no matter what the outcome of the Man United game is we will have a very tiny loss of -£0.10. So hours before the game even happens we know we are going to have a tiny loss of -10p for these bets, regardless of what happens in the game.
As the exchange takes a commission we can never get our fully cancelled out bet where we achieve £0.00 (i.e. no tiny loss) no matter what. We always have to incur this tiny loss. This loss is called the Qualifying Loss. The Qualifying Loss is always be the same no matter the outcome of the event.
So we know right now you are thinking “Loss!?! You said I’d make guaranteed profit!”
All we can say is please bare with us remember that the KEY point of doing the Qualifying Bet and taking this very minimal Qualifying Loss is to UNLOCK A FREE BET from which you will make a guaranteed profit from. Normal mug punters would have risked £10 doing a bet to qualify to get their free bet.
As matched bettors we don’t risk anything and we know before the game even starts that we are taking a temporary 10 pence loss and that this will be our loss no matter the outcome of the game.
So that was the first thing you need to know regarding the Qualifying Bet – the exchange commission and how we account for it using our Qualifying Bet Matched Betting Calculator. If you are interested you can see the Qualifying Bet Matched Betting Calculator by clicking here.
The second thing you need to know regarding a Qualifying Bet is that it is not always easy to find an exact match between the back odds at the bookmaker and the lay odds at the exchange.
In our Man United example so far we’ve been backing at 2.0 at the bookmaker and laying at 2.0 at the exchange. Although we can sometimes find a perfect match like this, most of the time the lay odds at the exchange can be a little different from those at the bookmaker.
IMPORTANT! As a matched bettor what we are looking for is the closest match we can find between the bookmaker and the exchange.
So 2.0 at the bookmaker and 2.0 at the exchange are the perfect match.
Then you could have 2.0 at the bookmaker and 2.05 at the exchange – just off from the perfect match.
Then 2.0 and 2.10 – still quite close.
Then 2.0 and 2.15 – and so on.
Sometimes you can have something like 2.0 and 2.5.
So what does this mean for us as matched bettors?
Well the first issue is that because the odds are different and higher on the exchange it means this causes a problem for us.
In the above example we did a lay bet against Man United winning for £10 at odds of 2.0. This meant our liability was £10.
If we have to lay Man United at odds of 2.5 instead this increases our liability to £15 - IF we still use the same £10 lay stake. That’s no good because if we lose at the exchange we have to pay someone on the exchange £15 – but we will only be winning £10 at the bookmakers, so we will be £5 down. How can we solve this problem??
With our Qualifying Bet Matched Betting Calculator again! (#thank you maths!)
Let’s take a look, this time we are placing a £10 back bet at the bookmaker at odds of 2.0 for Man United to win and laying Man United at the exchange (who are taking a 2% commission) at the odds available which are 2.50.
What does the Qualifying Bet Matched Betting Calculator then work out for us?
Well, as before it calculates what amount we should use for our lay stake at the betting exchange in order to ensure our Qualifying Loss is the same no matter if Man United win, lose or draw. This time though it does this by also taking account of the difference in the odds between the bookmaker and the exchange in addition to taking account of the exchange commission.
So what’s the Qualifying Bet Matched Betting Calculator telling us here?
It is recommending for us to use a lay stake of £8.06 at the exchange if the odds are 2.50. This will give us a liability of £12.10 and will result in a Qualifying Loss of -£2.09 (no matter the outcome of the game).
Now, although this is much better than losing a tenna to unlock a free bet at the bookmaker like a normal mug punter, we consider £2.09 to be far too much for us as matched bettors to accept as a Qualifying Loss.
2.0 odds at the bookmaker and 2.5 odds at the exchange are what we would consider to be a BAD match. We would NOT place this bet – it is too costly to us. We would search instead for another game and a better match between the odds that would reduce our Qualifying Loss substantially.
IMPORTANT! For matched betting purposes all you need to remember when doing a Qualifying Bet is that the further the odds are apart the higher our Qualifying Loss will be. We are ALWAYS trying to look for the best possible match between the odds - as this ensures a tiny Qualifying Loss.
Let’s look at a table example matches between the bookmaker and exchange odds to best show what we mean:
(If you like you could try typing in these examples in the Qualifying Bet Matched Betting Calculator to see how it works for yourself).
The table above shows what the Qualifying Loss would be for different odds matches between the bookmaker and exchange. You can see the perfect match of 2.0 and 2.0 gives us the lowest Qualifying Loss. As the odds become less well matched the Qualifying Loss slowly increases. (Remember - the Qualifying Loss will be the same no matter what the outcome of the event).
For a £10 back bet as beginner matched bettors we would avoid doing the bets if the Qualifying Loss calculated was around 85p or more. For a £10 back bet a Qualifying Loss of 40p or less is really good. A Qualifying Loss of 84p or less would be acceptable if no other game was available on that day with a better match between the odds.
For a £5 back bet you are aiming for a Qualifying Loss of around 25p-40p or less.
For a £20 back bet your aiming for a Qualifying Loss of around 90p or less.
How do you check whether the odds are a good match or not?
IMPORTANT! You always use your Qualifying Bet Matched Betting Calculator before placing any bets to work out what the Qualifying Loss would be if you go ahead. ALWAYS.
If the Qualifying Loss is in an acceptable range then you can go ahead and do the bets. If the Qualifying Loss is not in the acceptable range then you need to go find a better match between the odds on a different market on that game (e.g. Both teams to score market) or on an entirely different game altogether.
As you learn matched betting you will slowly ‘get your eye in’ for what is definitely not a good match and what might be or is a good match. Always use your Qualifying Bet Matched Betting Calculator to double check though!
So here’s a more real-life example of what an actual Qualifying Bet during matched betting looks like.
As the Man United game turned out to not be worth our time with a poor odds match of 2.0 and 2.50, we look instead at the Arsenal vs. Watford game.
We have back odds of 2.0 at the bookmaker for Arsenal to win and lay odds of 2.10 at the exchange against Arsenal winning (saying that they will lose or draw). This appears like it may be a good match. Let’s put it in our Qualifying Bet Matched Betting Calculator to see. (Click here to open the calculator yourself and follow along).
So we will input the following now:
- £10.00 back stake at the bookmaker
- 2.0 back odds at the bookmaker
- 2.10 lay odds at the exchange
- And the exchange commission which at Smarkets is 2%
So our Qualifying Bet Matched Betting Calculator is telling us for this Qualifying Bet we would incur a Qualifying Loss of -£0.58. This Qualifying Loss would be the SAME no matter if Arsenal win, lose or draw. This is an acceptable loss to us, not the best, but acceptable. We decide to go ahead placing these bets rather than using more time hunting for a better match.
IMPORTANT! The key numbers the calculator works out for us to make sure we have this -58p Qualifying Loss are the LAY STAKE AMOUNT we should use at the betting exchange, the LIABILITY we will have for doing this lay bet at the betting exchange.
The calculator also gives us the summary of where our money ends up depending on the outcome of the game; and how we incur this -58p loss no matter what the outcome of the game is.
We can explain this with a better diagram for you below:
We recommend going over this diagram slowly to digest it fully.
At the bookmaker we will place a £10 back bet for Arsenal to win at odds of 2.0.
At the exchange which has a 2% commission, using the information from our Qualifying Bet Matched Betting Calculator (above), we will place a £9.62 lay bet against Arsenal winning at odds of 2.10. This lay bet will have a liability of £10.58.
What happens if Arsenal win? (i.e. the bookmaker back bet wins).
Well at the bookmaker we win the back bet so we get our £10 stake back plus our £10 winnings from the bookmaker. So we are +£10.00 at the bookmaker.
At the exchange we lost our lay bet, so we had to pay someone who backed Arsenal at the exchange their £10.58 winnings (our liability). So we are -£10.58 at the exchange.
So overall we have +£10.00 - £10.58 = -£0.58.
What happens if Arsenal lose or draw? (i.e. the exchange lay bet wins).
Well at the bookmaker we lost the back bet so we lose our £10 back stake to the bookmaker. We are then -£10.00 at the bookmaker.
At the exchange we win our lay bet, so the exchange gives us someone’s £9.62 back stake that they used to back Arsenal at the exchange and then Smarkets takes their 2% commission from this amount, which is just under 20p. So Smarkets gives us £9.62 – 2%, which is £9.43.
So overall we have -£10.00 +£9.43 = =-£0.57.
So through matched betting we have successfully done a Qualifying Bet that results in us having a small -58p (or -57p) loss no matter if Arsenal win, lose or draw.
By doing this Qualifying Bet and incurring this small, temporary Qualifying Loss we have now unlocked our free bet from the bookmaker...
Unlocking the free bet is key to how we then go on to make our guaranteed profit through matched betting.
We previously introduced you to the concept of liquidity at the betting exchange (see section 6).
Now you've seen an example of how the Qualifying Matched Betting Calculator works, where it calculates the lay stake amount you need to use at the exchange, can you see why it is important for matched betting to check the liquidity available under the blue box lay odds at the exchange?
IMPORTANT! If the liquidity amount at the exchange is LOWER than the lay stake provided by the matched betting calculator you should NOT attempt to place the lay bet.
Why is this?
Well it's basically because the lay bet will not be fully accepted by Smarkets because their is not enough money available from the back bettors available to be able to lay that amount.
IMPORTANT! ALWAYS remember to check the amount of liquidity available before placing any lay bet at the exchange.
As a general 'rule of thumb' we tend to work by the following:
We consider liquidity to be acceptable when it is at least double the lay stake amount recommended by the matched betting calculator (e.g. if your lay stake is £10, an acceptable liquidity would be £20). When liquidity is larger than double your stake amount then we would consider it to be very good (e.g. if your lay stake is £10, a good liquidity would be £100).
We would consider liquidity to be bad (low) if it is less than double of your lay stake amount (e.g. for a £10 stake, bad liquidity is £19 or less).
For matched betting purposes we always avoid placing lay bets when the liquidity is bad. Instead we just find an alternative game, race or event to bet on that has better liquidity.
Again, as a matched bettor it is vitally important to check liquidity before placing a lay bet at the exchange.
So we have just used matched betting to do a Qualifying Bet which has resulted in the bookmaker releasing a free bet into our account with them. We achieved this for the tiny loss of just -58p.
You may now be thinking what we are going to do is just gamble this free bet to hopefully make a profit. Well, we are definitely NOT going to do this. We are going to use matched betting on this free bet.
Why will we do matched betting on the free bet?
Well gambling the free bet is being a mug as we would be taking a risk that the free bet could lose and we wouldn't make anything at all. We could end up completely wasting our free bet.
Matched betting instead incurs no risk as we cover our bet again so that no matter the outcome of the event we will make our profit.
That’s why matched bettors refer the technique providing guaranteed profits as we ensure we make profit regardless of whether the team we have bet on wins, loses or draws. We know, thanks to matched betting, exactly what profit we’ve made hours before a game even starts!
Remember what we told you before....
EVERY TIME WE DO A BACK BET AT A BOOKMAKER WE LAY THE BET AT AN EXCHANGE. THIS IS THE ESSENCE OF MATCHED BETTING.
You are now thinking though we just used matched betting though and ended up with a small loss so how are we going to use matched betting now to make a guaranteed profit?
IMPORTANT! Well this time round we will be using the FREE bet money given to us by the bookmaker instead of our own money – and that’s the key to how we make a guaranteed profit.
Let us show you.
As we placed a £10 bet with them a bookmaker has kindly given us a £10 free bet to use now. We are going to use a really similar process as to what we used to do the Qualifying Bet, but this time we will be doing what we refer to as the Profit Bet.
What is a Profit Bet?
A PROFIT BET is when we match a FREE back bet at the bookmaker with a lay bet at the exchange to produce a profit, regardless of the outcome of an event.
What are the similarities between a Profit Bet and a Qualifying Bet?
- The Profit Bet involves matching our bets again by doing a (free) back bet at the bookmaker and a lay bet at the betting exchange.
- For the Profit Bet we are also trying to make sure the match between the odds at the bookmaker and the odds at the exchange is as close as possible.
- The Profit Bet also involves a calculation involving the (free) back stake, the back odds, the lay odds and the exchanges commission percentage.
What are the key differences between a Profit Bet and a Qualifying Bet?
- The Profit Bet back (for) side of the bet always uses FREE bet money provided by a bookmaker. We never use our own money to place the back bet at the bookmaker when doing a Profit Bet
- We tend to do the Profit Bet on higher odds than what we usually do the Qualifying Bet on (i.e. odds of 4.0-6.5 rather than 1.5-3.0). How high the odds are that we can use depends mainly on how much liability we can afford if the lay bet loses (i.e. how much balance we have available in the betting exchange).
- For the Profit Bet we are trying to get the odds as closely matched as possible to increase our profit as much as possible. The closer the match we can find the more profit we can take.
- The Profit Bet involves using our second matched betting calculator, which is usefully called the Profit Bet Matched Betting Calculator. This calculator tells us what lay stake we need to use at the exchange to guarantee ourselves a profit from the bookmakers free bet. The Profit Bet Calculator also makes sure we will make the same guaranteed profit no matter the outcome of the event.
For this example the bookmaker has given us what we refer to as a “stake-not-returned” free bet, or SNR free bet.
A SNR free bet means if your free £10 back bet wins at the bookmaker they will only return to your winnings and NOT the original free £10 stake.
Remember when you are using your own money to bet the bookmaker returns your original stake plus your winnings. When you are using their free money to bet with they don’t give you the stake money, only the winnings.
The SNR free bet is the most common type of free bet bookmakers give us so we will use this for our Profit Bet example. There are other types of free bets (e.g. stake-returned and risk-free bets) that we can also extract profit from by matched betting but we will teach you about these later after you’ve mastered extracting profit from an SNR free bet (i.e. that's advanced matched betting).
Let’s start again at the beginning. We will see what would happen if we just layed our free back bet from the bookmaker at a betting exchange that was charging us no commission and we;d found the exact same lay odds as the back odds.
In this example we are using slightly higher odds of 4.0.
If we bet £10 of our money normally at odds of 4.0 the bookmaker returns our £10 stake plus our £30 in winnings. As we are using a £10 free SNR bet from the bookmaker what happens now if the FREE back bet at the bookmaker wins is that we ONLY get our £30 in winnings. At the exchange though we were liable for £30 when we placed our lay bet of £10 at odds of 4.0, so overall we end up with nothing if Chelsea win.
If Chelsea don’t win, and lose or draw though our lay bet at the exchange wins. The exchange gives us £10 in profit (as this exchange charges no commission). We lose nothing at the bookmaker as the £10 bet was FREE money from them.
So by laying our free back bet in this way we’ve ensured that if Chelsea we win we make nothing, but that if they lose or draw we make £10.
This entire bet is actually the opposite of doing only a mug free back bet on Chelsea to win at odds of 4.0. If you just used the free £10 to back Chelsea and didn’t lay the bet you would be up £10 if Chelsea lost but have nothing if Chelsea lost or drew.
Neither of these types of bet is what we want to achieve though as both types of bet always mean that for certain outcomes we make nothing.
IMPORTANT! As we are matched bettors we want to make sure we profit from our free bet no matter what the outcome of the event is. Win, lose or draw we want to make profit. We never want to profit only for certain outcomes otherwise we are no better than mug bettors!
So what could we do here in this example to make sure we do make a profit no matter the outcome of the event?
How can we balance it out to make the same profit regardless if Chelsea win, lose or draw?
The only thing we have power over is what amount we use for our lay stake at the exchange. We can’t control the amount of the free back stake and we can’t control the odds at the bookmaker or the exchange. They are what they are.
For those who are great at maths you can probably think about it a little bit and work out how but for the rest of us who suck at maths the quick answer is to reduce the amount we use for our lay stake at the exchange. Reducing our lay stake in turn also reduces our liability at the exchange (the amount we pay out in winnings to someone if our lay bet loses).
How much do we reduce our lay stake by though?
Well we use our Profit Bet Matched Betting Calculator to work it out for us otherwise it involves far too much faffy maths!
IMPORTANT! The Profit Bet Calculator will automatically calculate the amount you need to use for your lay stake so that we can create a situation where we will have the SAME PROFIT no matter the outcome of the event. Win, lose or draw we will ensure that we will make exactly the same profit.
In this example where the odds are exactly the same at the bookmaker and the exchange (4.0) and where the exchange charges no commission our Profit Bet Matched Betting Calculator tells us to use a lay stake of £7.50. A lay stake of £7.50 at odds of 4.0 will have a liability of £22.50.
Let’s look at what happens if we lay £7.50 at the exchange instead of the £10 we did before.
By reducing our lay stake to £7.50 (following what the Profit Bet Matched Betting Calculator told us) we have made sure that if Chelsea win we make £7.50, if Chelsea lose or draw we make £7.50.
No matter what happens in the game our profit will be £7.50.
By reducing our lay stake and subsequently liability at the exchange we have been able to achieve this balance of profit across all outcomes.
In this example we sacrifice a bit of the POSSIBLE profit we could have made through mug betting to ensure we make a GUARANTEED PROFIT no matter the outcome of the event.
This is the basics of how we take advantage of a free bet as matched bettors to guarantee ourselves a profit and make the entire process risk-free.
As matched bettors we never take the risk that we might lose out. We ALWAYS cover every outcome and ensure we get our profit from a free bet.
Now the PROFIT (FREE) BET we’ve just discussed above is also influenced, just like the Qualifying Bet was, by the commission charged at the exchange for their services and how perfect a match we can get between the odds at the bookmaker and the odds at the exchange.
Fortunately our Profit Bet Matched Betting Calculator can also take account of both these issues for us and tell us what we are best to use for our lay stake at the exchange.
Let’s look at the example again:
This time we can back Chelsea at the bookmaker to win at odds of 4.0 using our £10 FREE bet.
We can lay Chelsea at an exchange which charges 2% commission at odds of 4.1.
We put all this information into our Profit Bet Matched Betting Calculator, as shown below:
The Profit Bet Matched Betting Calculator then tells us what lay stake we need to use at the betting exchange, what our liability we will need at the betting exchange and what profit we will make if we go ahead and do this Profit Bet.
So if we went ahead with this Profit Matched Bet we would use our £10 FREE bet at the bookmaker and a lay stake of £7.35 at the exchange. By doing this we would then make a guaranteed £7.21 profit no matter if Chelsea win, lose or draw.
Yes that’s a £7.21 profit no matter the outcome of the game.
Let’s see how this would work.
Let’s go over this diagram slowly to digest it fully.
At the bookmaker we will place a £10 FREE back bet for Chelsea to win at odds of 4.0.
At the exchange which has a 2% commission, using the information from our Profit Bet calculator, we will place a £7.35 lay bet against Chelsea winning at odds of 4.10. This lay bet will have a liability of £22.79.
What happens if Chelsea win? (i.e. the back bet at the bookmaker wins).
We don’t get out stake back as it was free from the bookmaker. We do however get our winnings – which were £30. So we are now +£30.00 at the bookmaker.
At the exchange we lost our lay bet, so we had to pay someone who backed Chelsea at the exchange £22.79 in winnings (which was our liability). So we are -£22.79 at the exchange.
So overall we have +£30.00 - £22.79 = +£7.21.
What happens if Chelsea lose or draw? (i.e. the lay bet at the exchange wins).
Well at the bookmaker we lost the back bet. As it was FREE though we’ve lost nothing, so there is no change in our balance at the bookmaker. We’ve lost nothing there.
At the exchange we win our lay bet, so the exchange gives us someone’s £7.35 back stake that they put on at the exchange and then takes their 2% commission from this, which is 14p. So we are given £9.35 – 2% at the exchange, which is £7.21.
So overall we have £0.00 +£7.21 = +£7.21
IMPORTANT! So by matched betting we have successfully done a Profit Bet which results in us having £7.21 in profit no matter what the outcome of the Chelsea game is. Win, lose or draw by matched betting the free bet we have guaranteed ourselves £7.21. We know we’ve made this profit hours before the game even starts!
If we now take into account the -58p we lost from the Qualifying Bet, our total profit from doing these two bets is £7.21 – 58p. Which equates to £6.63. Once you learn the basics of matched betting well you can easily do a Qualifying Bet and a Profit Bet with just 5-7 minutes of your time.
£.6.63 for 5-7 minutes of your time is pretty good going in our eyes!
IMPORTANT! This is just an example of doing one Qualifying Bet followed by one Profit Bet. Often for new customer sign-up offers at a bookmaker we would continue on to do 2 or 3 more Profit Bets after this first Profit Bet. This would increase our profit each time.
For example, Coral's new customer offer is bet £5 and get £20 in free bets (which are provided as 4 x £5 free bets). From an offer like this we would expect to lose around 30p from the Qualifying Bet and then make £3.50 to £4 from each of the £5 Profit (free) Bets. We would be looking to make a total profit of at least £14 from less than an hour of our time. You can see our beginner's matched betting guide on how to do the Coral offer here.
The William Hill new customer offer is similar. You need to do a £10 Qualifying Bet (where you would expect to lose around 50p through matched betting). This Qualifying Bet would then unlock 3 x £10 free bets. By then doing 3 Profit Bets on these free bets we would expect to make a total profit of at least £21. Again, you ca see our beginner's matched betting guide on how to do the William Hill offer here.
You may be wondering though what happens after doing these new customer offers?
How many offers are there out there for you to take advantage of?
Where can I find these offers?
Can matched betting make you rich?
Is matched betting a sustainable source of income?
We consider all these questions in the final section of Matched Betting Explained below.
So far we have only covered the basics of the matched betting process and how we use matched betting to first do a Qualifying Bet that will unlock a free bet from the bookmaker and then do a Profit Bet to ensure a guaranteed profit from that free bet.
How does matched betting work in the long-term though?
Put simply, we do the matched betting process again, and again, and again across lots of different bookmakers in order to make regular on-going profits.
First of all there are a LOT of bookmakers in the UK and the vast majority offer new customer's incentives for signing up with them. From the new customer offers alone you can expect to make at least £1000 in profit through matched betting.
Is that the end of the line though? No, far from it.
Every day, and every single week bookmakers throw offers out to their existing customers as well. By spending an average of about an hour a day on matched betting these existing customer offers you can aim to make a profit of between £400-£500 a month. Some days we do no matched betting, other days we do 3-4 hours - it depends what offers are on and when. For example the 2018 Football World Cup will be a busy period for matched betting, as are annual events like the Cheltenham Festival, and Wimbledon. During the Premier League football season it's often the case that we spend a bit of extra time at the weekend doing matched betting as that's usually when all the games are happening and the bookies send out the offers to their customers.
If you go extreme and spend more time than our average of an hour a day, as some full-time matched betting professionals do, it is APPARENTLY possible to make over £1000 a month. However, we haven't done this ourselves and therefore can't recommend it. Instead we really recommend, that unless you get obsessed with matched betting not to leave your day job and instead viewing matched betting as an extra way to top up your normal income each month during your spare time. This is what we do and just by doing £400-£500 a month in profit we have substantially changed our financial situation and our lives.
The great thing about matched betting is that you can do as much or as little as you like! We often do extra for example before a holiday is coming up, just so we can boost our spending money.
Matched betting will NOT make you rich, it is not a get-rich-quick scheme. Those do not exist and don't believe anyone that tells you so. Matched betting WILL help you bring in a regular, tax-free nice additional extra income each month to help pay bills, save towards a nice holiday, or similar expense.
IMPORTANT! Bookmakers give out more offers to GOOD AND REGULAR customers. Therefore we need to look and act like good and regular customers! We do this through doing what we refer to as 'mug betting'. Mug betting is basically exactly the same as doing a Qualifying Bet, except it isn't related to ANY offer from the bookmaker. It's a bet that makes you look like a good, regular punter and not a matched bettor.
If you don't look like a good punter and just continuously do promotional offers its likely at some point the bookmaker will message you and say (but in a nicer way!), "hey - we are restricting your bonuses and offers because your taking the piss and we think your not a good customer to keep".
Try to put yourself in the bookmakers shoes, or any business in fact.
If you try to think of mug betting as like a loyalty card scheme then you'll be good to go. (e.g. like at Starbucks when they stamp your card each time you buy a coffee, and then the tenth one is free).
It does take a bit of extra time, but boy is it worth it in the long-run! Doing mug betting is what allows matched betting to become a long-term sustainable sources of regular extra income. If you choose not to do mug betting then it's up to you, but then expect to be cut off from bonuses and free bets at some point.
After you complete the 10 beginner offers in our matched betting guide we take you to our advanced matched betting pages where we go over matched betting for the long-term and how to make a regular income from matched betting in much more detail.
All the guides and information on our website is completely free.
We recommend now for you to start on the beginner offers so you can get to grips with the matched betting basics yourself (there's no better way to learn!). You can start the offers yourself directly with our free online beginner's matched betting guide or you can book a free appointment with us to learn matched betting if you prefer social learning and having the ability to ask questions as you go.