||This article contains instructions, advice, or how-to content. (December 2010)|
Matched betting (also known as back or lay bet matching, or double betting) is a betting technique used by individuals to profit from the free bets and incentives offered by bookmakers. It is generally considered risk-free as it is based on the application of a mathematical equation rather than chance. A typical return for a matched bet where the stake is returned is 85%+ of the free bet offer amount, and 70%+ where the stake is not returned. Most free bets are stake not returned.
The concept of matched betting requires an account with two or more bookmakers or betting exchanges where at least one offers the user a free bet. When the free bet is placed the other bookmakers or betting exchanges are used to hedge all the possible outcomes so that no matter what happens the value of the free bet is retained. At its simplest, a matched bet involves placing a back bet using the free bet at a bookmaker while placing the opposing lay bet at a betting exchange. More advanced versions involve placing the bets on multiple bookmakers (dutching) to avoid the commission charged for using an exchange. Generally, bookmakers incorporate terms by which bettors must first place a bet using their own money in order to qualify for the free bet. For this, a bet is placed on particular results occurring with the bookmaker and a second bet placed on the same result not occurring at the betting exchange. The latter is required to offset any loss in the event that the result does not occur; for instance, if a team loses. Once the free bet has been qualified, the same process is followed with the exception that a free bet is being used. No matter which result occurs, there will always be a guaranteed profit because the bet was made free of charge. Online betting outlets, betting exchanges, have become popular in recent years for they allow betters to bet without official odds-makers. In essence, the person placing the lay bet acts as a bookmaker.
Continued matched betting taking advantage of existing customer reload offers doesn't work quite the same way. Rather than backing and laying on the exchange to guarantee a free bet no matter what the outcome the person will back on the bookmaker, lay on the exchange and hope for the desired outcome to occur and reward a free bet. Calculators can help work out if the qualifying cost and potential reward from the free bet is enough to justify the potential risk of not getting a free bet. Similar to playing poker it's considered profitable in the long term to continue making these low risk wagers where the qualifier might be pennies compared to the potentially hundreds made if the refund event occurs for a free bet.
There are several common strategies for matched betting including Assisted, and manual betting.
Assisted matched betting refers to websites or software packages which provide comparison tables of markets for individuals to bet on. These are commonly known as 'auto-matchers'. Auto-matchers are usually used by individuals who have an understanding of matched betting. Auto-matchers will usually provide the individual with a matched betting calculator to be used in conjunction with the comparison table, in which the user can select the type of bet, stake, bonus and time-frame.
Matched betting manually is where the individual finds the offers, markets and odds him/herself and also makes the relevant calculations. Matching the right odds can be time consuming and may require a high level of numeracy and betting knowledge. Where there is a potential for loss this is more akin to advantage play gambling.
Note that the following example uses indicative figures.
- Bookie X offers a £10 free bet. First, the individual has to make a bet of £10 with Bookie X to qualify for this.
Bookmakers often require individuals to make a bet before giving them the free bet.
The first stage is to qualify for the offered free bet, e.g. by making a £10 bet with Bookie X for England to win. There is a chance that England might not win, in which case you would normally lose the £10.00. This bet is referred to as the 'Back Bet'. However, in matched betting, this loss is minimized by placing a bet at the same time at a betting exchange for England not to win ( i.e. to lose or draw). This is called a 'Lay Bet'.
By applying the correct equations, the individual making the bets knows how much to place at the betting exchange so that no matter the outcome of the England match, the bettor will suffer a small loss (typically under 10% of the value of the free bet offer). However, by making this initial bet, they have qualified for the free bet.
The second stage is to use the free bet; for example, making a £10 back bet with Bookie X for France to win. Again a lay bet is placed for France not to win to offset any loss.
The mathematics of matched betting means that the profit made is identical, regardless of result. In this example, it is assumed that the overall profit from this match is £8, since any loss is offset by larger winnings achieved through laying this bet. This means that matched betting individuals will know for sure how much profit they will make before the match starts. Less the initial loss, the matched better's net profit is £7.00.
In the same way, the mathematics of similar types of offers by casinos can be calculated. With these there is no exchange to lay on. You take the Return to Player (RTP) of the game and multiply it by the stake requirements. You then do the same with the free bonus multiplied by the wagering requirements. If the latter is higher, then (while not risk free) it's profitable in the long term to take advantage of the casino offer as well as the sports book.
There are risks attendant with matched betting. If one side of the arb reneges on the contract then the other side of the bet is open and may incur a loss. Offers from bookmakers can dry up due to bookmakers limiting the number of offers they give to an account thus ending matched betting opportunities. Also, if bookmakers are aware that an account holder is performing arbitrage then an account can be restricted or closed. 
- Matched betting is legal and a spokesperson for William Hill has indicated that the betting industry does not have a problem with this use of free bets.
- Most bookmakers have people on their staffs looking for bettors 'taking too much value', something which tends to happen with matched betting. They will place restrictions on the accounts of bettors who may be taking advantage of promotions too often, such as preventing them from placing very large bets. Bettors whose betting behavior is unacceptable to a given bookmaker risk being banned from that bookmaker's site.
- Matched betting, along with all other betting, is tax-free in the UK.
Terminology and acronyms
- Betting Exchange
- A betting exchange is an entity which provides trading facilities for retail or bookmaker customers to buy and sell contracts. Betting exchanges provide the ability to place both back and lay bets.
- Back Bet
- A bet that wins if the selection on which it is placed wins. All traditional bookmakers as well as betting exchanges offer back bets.
- Lay Bet
- A bet that loses if the selection on which it is placed wins. Laying bets is a service provided only by betting exchanges.
- The amount you lose or pay out if your lay bet loses. This is also the amount required in order to match a bet to guarantee all events are covered.
- Stake Returned (SR)
- A bet for which, if it wins, the bettor receives the original stake as well as his/her winnings. For example, a bet of £5 at odds of 5-to-1 returns £30 - the £25 winnings plus the original £5 stake.
- Stake Not Returned (SNR)
- A bet for which, if it wins, the bettor receives only his/her winnings, while the original stake is not returned. In this case, for example, a bet of £5 at odds of 5-to-1 returns only the £25 winnings, which gives a net value of £20.
- Qualifying Bet (QB)
- A bet placed at a bookmaker in order to receive a free bet.
- Wagering Requirement (WR)
- Specific instructions that must be followed in order to unlock a free bet or withdraw bonus funds from a bookmaker. These may include restrictions on markets, types of bets that may be placed and the maximum value of individual bets.
Other points to consider
- Betting exchanges charge a commission on winnings made.
- Free bets may have terms and conditions attached to them. For example, a bookmaker may stipulate that an initial bet is placed at odds of 2.00 or over before you can qualify for their free bet.
- Bookmakers may use reputation management systems to track users who sign up with multiple bookmakers and ban players they perceive to be matched betting.
- Burek, Owen. "Is Matched Betting the Answer to Student Prayers?". Huffington Post. Retrieved 6 June 2014.
- Thrust, Richard (2010). Free Sports Bets. ISBN 9781445725710.
- "Free World Cup bets offer chance to beat the bookies". The Guardian. 5 June 2010.
- "Free bets mean you can clean up as bookies meet their match". The Guardian. 24 July 2010.
- "Matched Betting". Betfair Pro Trader. Retrieved 23 September 2016.
- "Is this a bet you can't lose?". Daily Telegraph. 6 December 2010.
- "BIM22015 - Trade: Exceptions & alternatives: Betting and gambling - introduction". HM Revenue & Customs. Retrieved 4 December 2013.