What exactly is matched betting?
What is matched betting?
To be honest, I was quite late into the world of matched betting. Although, I have been experimenting with it quite a lot of late. So much so that I feel more than able to give you a rundown of exactly what matched betting is all about.
So, matched betting is in the first instance taking advantage of the free bet offers that bookies provide in order to try and entice you into using them as your bookmaker. These offers range from £5 right up to £100 plus and there are a lot of bookies and therefore a lot of offers!
Done correctly it can be a way to provide you with a little bit of up-front cash and a little bit of extra income on a weekly basis.
What are the tax implications?
One of the great things about any income earned from gambling is these days it’s completely tax-free. What’s great about match betting is a lot of it is entirely risk-free too, meaning you win whatever the outcome of an event.
If you’re new to matched betting you’re probably asking how it is possible to cover all outcomes of an event! Well, it’s simple really, we use one of the gambling exchanges to remove most of the risk that we have on a bet.
In the world of bookies, there is usually just one kind of bet, a back bet.
In the world of exchanges, there are both back bets and lay bets.
Back bets are pretty like what you’d expect from a bookie except that you usually get better odds on an exchange than you do with a bookie.
Lay bets are really the opposite of a back bet. By that, I mean that instead of placing a bet on an event to happen like Manchester United to beat Manchester City for example instead you’re betting on an event to not happen. So, in this example, you would be betting on Manchester United to not beat Manchester City. This would mean that you would make a profit if Manchester City won the match or drew the match.
If you place a lay bet as a user of a gambling exchange, then it’s very similar to you acting as a bookie. You’re offering a price for some other user of the exchange to accept. If both of you agree the bet is matched and then you just sit back and wait for the outcome to determine who won.
The gambling exchanges usually win either was as they take a commission from whoever profits from the event.
What is liability in matched betting
Well to start with, let’s just explain what liability is in betting. Liability in betting is the amount a lay bet would cost you if you had to payout. So, as I said earlier when you place a lay bet you are basically acting like a bookmaker. You are offering a price on an event. If someone accepts that price, then they have accepted a bet that you have offered.
It might be clearer with an example…
I have just logged into my Betfair (betting exchange) account and I see the following premier league game between Wolves v Leicester. For this example, let’s assume we don’t think Wolves are going to win. We think it’s either going to be a draw or a win for Leicester. So, in this example, we could lay Wolves. To lay Wolves in BetFair you click on the Odds displayed in pink, which in this case is 2.74.
The money displayed underneath the odds, i.e. £17 in this example is the amount of money that is currently available to be instantly matched at that price.
And now to place my lay bet…
I have accepted the already available odds of 2.74 and added a backer’s stake of £2. This mean that if Leicester win or the game ends in a draw I will win £2. However, if Wolves win, I will lose my liability of £3.48.
You may be wondering how this liability is calculated. Well, it’s simply odds minus one multiplied by backers’ stake.
So, in this example
(2.74 – 1) = 1.74
1.74 x £2 = £3.48
One is subtracted from the odds as the initial value will include the backers’ stake.
In the win market of a game of football, there are 3 possible outcomes, Home Win, Draw, or Away Win.
As I have placed a lay bet against Wolves the following could happen…
Home Win – I lose £3.48 (my liability)
Draw – I win £2
Away Win – I win £2
So, your liability in matched betting is just the liability of the lay bet, however it’s kind of different! And what, I hear you asking do I mean by “kind of different”. Well, most of your liability in matched betting will be covered by your back bet.
Perhaps it’s time for another example…
You sign up as a new customer with SkyBet. Their signup offer gives you £20 in free bets.
Assuming you bet £20 of your own money on Sheffield United v Bournemouth game. £20 on Bournemouth to win with SkyBet at odds of 5.25 which would provide you with a return of £105 including your stake if Bournemouth wins.
However, this is a free bet, so if Bournemouth did win then you don’t actually get your stake back, so you’d actually net £85 in profit.
With matched betting, your goal is to win regardless of the outcome. So you use a matched betting calculator to lay the bet off so as to ensure a profit win, lose or draw.
In the above example the exchange website is offering lay odds agains Bournemouth at 5.60. So if we play a lay stake of £15.23 our lay liability would be £70.06. This would result in a profit of £14.94 if Bournemouth wins and a profit of £14.93 if Bournemouth loses or the match ends in a draw. Win, win!!
So in matched betting your liability is actually covered, and more by the back bet that you used your free bet with at the bookies.
There’s one major problem with matched betting and that is that as soon as the bookies have the slightest inclination that that’s what you are doing then they gub you. “Gubbing” is a term coined by matched bettors and is where the bookie closes your account down or where they restrict your bets so much, you’d be lucky to be able to stake a couple of quid on an event.
A strategy that many matched betters have adopted to avoid being gubbed by the bookies is that of mug betting. Mug betting is basically trying to make yourself look like an average everyday punter. You do this by placing a normal bet and what I mean by a normal bet is one that isn’t part of some bonus or promotion.
You can, however, still lay your bet off on one of the exchanges to cut any losses down to a bear minimum.
Bookies look for trends and patterns in your gambling. Throwing the occasional mug bet in can make them continue to think you’re an everyday punter.
Some good mug betting strategies that closely mimic your everyday punters include:
- Betting on events in-play. Everyday punters do this a lot.
Often betting on your favourite football team. Your everyday punter isn’t particularly looking for value bets more just the fun of placing a bet on their favourite team for some added excitement while watching the match.
- Sticking to preferred markets, such as horse racing and football.
- Experiment a little, and I mean a little with some of the bookie’s other offerings. Such as slot machines and casinos.
- Don’t go for the best odds. If you’re always betting at the best odds available, then this is bound to raise a red flag.
There are a few things to bear in mind generally when matched betting…
It’s always best to try and stick to the big markets e.g. your premiership or championship football games and UK horse races. Avoid the never heard of teams with little money available in the market.
If you’re using an odds matching tool such as the free one available on the profit rush site or a paid one such as profit accumulator or oddsmonkey then avoid going for the arbs. An arb is where if you place a bet with the bookie and then lay it off at the exchange and make a profit without necessarily having previously accepted any bonuses or free bet offers.
When using free bets go for big odds. Why? Because one they generally tend to give you a bigger return and two, they’re less likely to win on the bookies’ side. So, the cash that you make is more likely to be with the exchange. Bookies are less likely to gub you if you keep depositing cash with them on a weekly or monthly basis.
Of course, the downside of going for big odds is that you also need a big bank as the liability on the lay can be quite large.