We’ve mentioned matched betting and bonus bagging in a couple of articles as it has become an extremely popular way for anyone to generate some extra cash from home in their spare time. People who have never placed a bet before are making good amounts of money by matched betting when they get a few minutes free in their day. However, a lot of people are put off by it as they don’t fully understand how it works, so here is an example.
What is Matched Betting?
Online betting sites give free bets and run promotions for new customers to try and entice them to sign up to their website instead of one of their competitors. There are hundreds of bookmakers online and all are competing for your business which means each one is under pressure to offer something bigger and better than their competitors to entice customers.
An example of a typical bookmaker sign up offer for new customers is:
‘Sign up to William Hill, place a £20 bet and receive another £20 bet free!’
This seems like a good offer initially as you’re getting a £20 free bet. However, what happens if you lose your first £20 bet and then lose your free £20 bet as well? You’ll be down £20 of your own money!
What matched betting does is allow you make a profit from every free bet you receive.
How? Lets take a look at the process…
Before we begin I want to briefly mention a couple of things to help you understand the process of matched betting. If you haven’t placed a bet before then some of the terms you’ll hear may be new to you. Don’t worry though. By the time you’re done reading this article you’ll have a better understanding of all the terminology and have a firm grasp on what matched betting is all about.
Betting exchanges are slightly different to bookmakers in that at a betting exchange you are betting against other users and so there is no bookmaker profiting from your losing bets. At a betting exchange you can not only bet on teams to win but also bet on teams NOT to win. This is the main use of betting exchanges in matched betting.
A back bet is when you are betting on something to happen. For example, you may think that Man Utd will beat Chelsea and so you would place a back bet on Man Utd to win. If you have placed a bet before at a bookmaker it would have been a back bet. You can place back bets on all bookmaker sites.
A lay bet is when you are betting on something NOT to happen. Using the example above, you don’t think Chelsea will beat Man Utd and so you would place a lay bet on Chelsea. This means that your lay bet would win if Chelsea don’t win ie. Man Utd win or the game finishes a draw. Lay bets can’t be placed on bookmaker websites and you must use a betting exchange to place these bets.
By placing a back bet AND a lay bet we are covering all outcomes of the game.
The most popular betting exchange is Betfair which has over 4 million customers worldwide.
You make your profit in matched betting by using your free bets. There are two steps when extracting a profit from a free bet. These are your ‘qualifying bet’ and your ‘free bet’.
Step 1 : Your qualifying bet
Your qualifying bet is your initial bet and its sole purpose is to see that you qualify to receive your free bet.
Using the William Hill offer above as an example, you have to place a £20 bet in order to receive your £20 free bet. This first £20 bet is your qualifying bet.
The process of placing your qualifying bet :
– Place your bet at the bookmaker
– Place the opposite bet at the betting exchange
You have now covered all outcomes. You will not make a profit on this bet but you will also not lose anything (in reality you may lose a few pence due to the exchange fees). Despite not making any profit on this bet, you now have a free bet. It is with this that you will make a profit.
Step 2 : Using your Free Bet to make a guaranteed profit
So you haven’t won anything and you haven’t lost anything but now you have a free bet. Again, you could place this free bet on a football match or a horse but it’s not guaranteed to win. Using matched betting, you cover all outcomes to ensure you don’t lose your bet.
We’re going to repeat the process of :
– Placing your bet at the bookmaker
– Placing the opposite bet at the betting exchange
However, this time you are going to place a lower stake on the betting exchange which will mean you will return a profit whatever the outcome. Don’t believe me? Let’s take a look at an example.
You’ll need a matched betting calculator to work out your stakes for your lay bet. These are available on most matched betting sites.
Now let’s take a look at an actual example of a matched bet to show you how you can make a guaranteed profit…
Example Offer : William Hill offer new customers a £20 free bet when you sign up and place your first bet of £20.
For this example we’re going to be betting on the Man Utd v Chelsea match.
Step 1 : Placing your qualifying bet.
We sign up to William Hill, deposit £20 and place that £20 on Man Utd to win at odds of 2.0.)
If Man Utd win we will receive £40 back (£20 stake and £20 winnings)
We then place a £20 lay bet on Man Utd on Betfair (or any other betting exchange) with odds of 2.0
If Man Utd don’t win (lose or draw) we’ll receive £40 back (£20 stake and £20 winnings)
So we’ve placed a total of £40 in bets. £20 at William Hill and £20 at Betfair and we’ll get back £40 whatever the result.
We haven’t made a profit but we haven’t lost anything either. However, as we have placed a £20 bet with William Hill, they have given us a free £20 bet!
Step 2 : Placing your free bet (and making a profit!)
We now need to find another game to use our free bet on. We’ll use Liverpool v Arsenal as an example this time.
The odds on Arsenal to win on William Hill are 7.0 and the lay odds for Arsenal not to win on Betfair are also 7.0.
Using a matched betting calculator, we enter our stake and odds and it tells us to place a lay bet with a stake of £17.27 with a liability of £103.62.
The liability is the amount you stand to lose if your lay bet doesn’t come in. In this example your lay bet would lose if Arsenal won the game as you are betting on them not to win on the exchange.
So now you’ve placed your back bet and your lay bet. Let’s take a look at how much you will get back depending on the outcome.
Total outlay :
William Hill : £0 (as you’ve only used your free bet and none of your own money.
Betfair Exchange : £103.62 (the liability of your lay bet)
If Arsenal Win :
Your bet with William Hill wins and you will get back £120 (£20 x 7 = £140) minus your initial stake as it was a free bet.
Profit from bet = £16.38
If Arsenal don’t win ie. the game is a draw or Liverpool win :
Your bet with Betfair Exchange wins and you will get back £120.03
Profit from bet = £16.41
There you have it! If Arsenal win, you make a profit of £16.38 and if Arsenal don’t win, you make a profit of £16.41. What is better is that we know how much profit we will make before the game has even kicked off!
That’s just one example of how to make a profit from a free bet. There are hundreds of these free bets available at a number of online bookmakers and more are added every single day.
You can read more about matched betting in your own time by downloading this ebook for free.