How matched betting works and why it could be a good side hustle

• Amanda Gillam
• 29th September, 2021
• Income & Work

Everybody knows that betting involves a certain degree of risk whether you bet on sport, reality TV shows, or even the Oscars. The outcome may either be in your favour where you win or against your prediction and you lose. However, did you know that there is another form of betting where you can profit with almost zero risk? Well, it sounds unbelievable but matched betting gives you exactly that.

What Is Matched Betting?

Matched betting is a technique where you stand to earn a guaranteed profit by taking advantage of free bets offered by bookmakers. It is a legit and legal way of making some extra cash – a potential side hustle. To understand how matched betting works and how to earn sustainable profits from it, there are a couple of terms that you need to understand:

A Back bet: This is where you bet on a particular outcome happening. For instance, if you are betting in an English premier league match between Arsenal and Tottenham Hotspurs and you place your bet on Arsenal to win then that’s a back bet. If Arsenal goes ahead and wins, you profit from your bet. However, if it loses or draws, then you lose too.

Lay bet: This is the opposite of a back bet. You place your bet against a certain outcome. In the example above, if you bet that Arsenal is not going to win, that is a lay bet. If Arsenal doesn’t win the game then you profit from your bet.

Having understood what back bets and lay bets are, profiting from matched betting becomes much clearer and easier. Here is how profit is generated in matched betting.

How The Income Is Generated in Matched Betting

To make money in matched betting, you need to:

1. put in your money, and then
2. take advantage of free bets offered by bookmakers.

You’ve probably seen bookmakers offering promotions such as Bet £25, Get £25! In this case, when you bet your £25, you qualify for a free bet worth £25.

The Qualifying Bet

The goal of the first bet is to enable you to qualify for the free bet without suffering loss. You can achieve this by placing a back bet at the bookies and placing a lay bet at a betting exchange such as Betfair for the same event at the same or slightly differing odds to counter your back bet. The reason you cannot lose is that every outcome is covered by your bets.

The only loss you may suffer at this point is what is called a qualifying loss. This is a loss you suffer to unlock your free bet. It mainly comes from the commission charged by the betting exchange you use.

Free Bet

Once you’ve completed the qualifying bet, the bookmaker will credit the free bet into your account so that you can use it in your next bet. When betting check under the bet type header for Free Bet (SNR) meaning Free Bet stake not returned.

Example of How To Make Money from Matched Betting

STEP 1: The Qualifying Bet

Assume Bookmaker A has a Bet £25, Get £25! offer. Open an account with them and deposit £25 and place a bet. Using an oddsmatcher tool, you find a match to bet on, say Manchester United vs Aston Villa. The back odds of Manchester United on Bookmaker A could be 2.0. You place your back bet of £25.

The next task is to find a lay bet on a betting exchange with odds as close as possible to the back bet for the same match. Assume you get a lay bet on Betfair at odds of 2.02

If you input the back bet, lay bet, odds, and the commission on a lay betting calculator, you will get your lay stake, lay liability and overall profit. In our case, the information is as follows:

• Back stake -£25
• Back odds -2.0
• Lay odds -2.02
• Exchange commission 5%

Lay stake

The lay stake is calculated as follows: lay stake = back odds / (lay odds – exchange commission) * back stake. In our example the value would be £25.38 [{2.0 / (2.02-0.05)} * £25]. This means that you should place a £25.38 lay bet on Manchester United not winning.

Lay bet liability

The second parameter is the lay bet liability. Although the calculator will give you this figure without breaking a sweat, here is how it is calculated.

Liability = lay stake * (Lay odds – 1)

In our case: Liability = £25.38 * (2.02 – 1) giving us £25.89.

This means you are risking £25.89 by placing your lay bet. In case you lose, this is the amount that will be deducted from your account balance. Therefore, you must have £25.89 in your exchange account.

Here are the possible outcomes from your qualifying bet:

• If Manchester United wins against Aston Villa you win £25 on Bookmaker A and lose £25.89 on Betfair. Your qualifying loss is therefore £0.89; the difference between the two figures.
• If Manchester United doesn’t win, you lose £25 on Bookmaker A and win £24.11 on Betfair. The figure of £24.11 is arrived at by subtracting the commission (5%) from the lay stake (£25.38- £1.27). Your qualifying loss is £25-£24.11 giving you £0.89.

Therefore, whatever the outcome, your qualifying loss will be the same £0.89. However, there is a difference, you now have a £25 free bet!

STEP 2: The Free Bet

Using the same process as before, you look for an event with slightly higher odds. For instance, you could choose Manchester City versus Chelsea. Assume the odds for Manchester City winning are 5.0 on Bookmaker B and lay odds of 5.2 on Betfair. Remember higher odds means you need more money in your exchange balance, but also you stand to reap a larger profit.

Using your matched betting calculator, you feed in the following information:

• Back stake -£25
• Back odds -5.0
• Lay odds -5.2
• Exchange lay commission- 5%

Follow the formula: Lay stake = (back odds – 1) / (lay odds – commission) * free bet size. In our case, the lay stake = {(5.0-1)/ (5.2-0.05)} *£25 giving you £19.42

You can calculate your lay bet liability using the same formula: Liability = lay stake * (Lay odds – 1). In our case, liability = £19.42* (5.2 – 1) giving you £81.56

Here are the possible outcomes from the free bet:

• If Manchester City wins, you win £100 on Bookmaker B because of the 5.0 back odds. However, at Betfair, you will have lost £81.56. Your profit will therefore be £18.44 computed as £100 -£81.56.
• If Manchester City doesn’t win, you don’t lose on Bookmaker B because you are on a free bet. However, you’ll win £18.44 on the Betfair exchange, computed as £19.42 less 5% commission.

Irrespective of the results of the matches, you win either way. While £18.44 may not seem to be much, if you play matched betting multiple times, it can quickly build up to a substantial amount.

How Much Can You Earn Doing Matched Betting?

You can see how much you can make per bet so the overall amount you can earn from matched betting depends on the time and effort you are able to spend on the task. On average, you could make around £200 a month, but some people earn up to £800 or even more.

Having said that, the biggest challenge with matched betting is that you may lose some accounts with time and fail to get as many free bets and promotions as you did at the beginning.

Frequently Asked Questions About Matched Betting

Here are some of the most common questions people have when considering starting to do matched betting.

Is Matched Betting Legit?

Matched betting is 100% legit. The process is clear, the math adds up, and opportunities for free bets from licensed bookmakers are all over the internet. The practical example above shows you that there is no catch. Since you are covering all the outcomes, there are zero chances of loss except for the negligible qualifying loss.

Is Matched Betting Legal?

Matched betting is legal. There is no law barring the use of free bets and it is from the free bets loophole that you make money in matched betting.

How Do I Start?

Starting is simple. Sign up for an account with a betting exchange such as Betfair to enable you to place lay bets and shop around for bookmakers with competitive promotions and free bets.

How Much Should I Put in At the Beginning?

There is no upper limit on how much you can put in matched betting, but you can start with a small budget of anywhere between £100-£200.

How Much Time Should I Commit Per Day?

Time is money and the more hours you put in the higher your earnings. However, on average, expect to spend between 15-60 minutes per day. One bet can take about 15 minutes to complete.

Why Do Bookmakers Allow Matched Betting?

Well, asked in another way, the question would be why bookmakers give free bets? Betting is a highly competitive market and so bookmakers use free bets to encourage people to sign-up for their services and not another’s.

How Fast Can I Learn Matched Betting?

This is largely a question of personal capabilities and interest. However, within a day or two, you should have fully understood it.

Are The Profits Taxable?

No. In the UK, proceeds from gambling including matched betting are tax-free.

What Are the Risks to Look Out For?

Beginners normally make small errors such as entering stakes that are different from what the calculator suggests. Even though the errors are not too costly, always follow the instructions given for a smooth ride.

Probably the biggest risk is that of being disqualified from accessing promotions and free bets. This happens when the bookmakers suspect abuse of their bonuses and promotions. To prevent this from happening, try to make some regular bets in between your matched bets.

Does Matched Betting Impact My Credit Score?

No, it doesn’t. However, since you will be transacting through your bank account, lenders may be a little concerned seeing large amounts debited and credit to your account from bookies and betting exchanges.

 

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