Here we explain how to make a profit from matched betting. If you have a question at any stage, don't hesistate to ask us a question.
The goal
Online bookmakers offer free bets to new customers in much the same way as online casinos offer free bonuses. They're basically giving you free money! We want in.
Stage 1 - Get Your Free Bet - Making a "Qualifying Bet"
Stage 1 is to get hold of the free bet. If you signup to a bookmaker, bet £10 on Man Utd to beat Chelsea (the "qualifying bet") they'll give you a free £10 to bet on something else (the "free bet"). To get this £10 free bet we have to make a qualifying bet of £10 ourselves. AND, if we obey the Golden Principle, we can make this qualifying bet 100% risk free.
The Golden Principle - Match Your Bet
You know what making a bet is. You know what laying a bet is. What if you do both at the same time? It's called "matching your bet". For example, what happens if you bet £10 that Man Utd will beat Chelsea at odds of 4.0, and then lay £10 that Man Utd will beat Chelsea at odds of 4.0? In short - nothing. Note that we've picked the same thing both times - Man Utd will beat Chelsea at odds of 4.0. What happens if Man Utd beat Chelsea?
Man Utd beat Chelsea:
| Bet £10 @ bookmaker | Your bet WINS | Profit | = 4.0 x £10 | = £40 |
| Lay £10 @ betting exchange | Your lay LOSES | Loss | = 4.0 x £10 | = £40 |
| Total | = £40 - £40 | = £0 |
You won £40 at the bookmakers. You lost £40 at the betting exchange. Net profit: £0. Nothing. What happens if Man Utd don't beat Chelsea?
Man Utd don't beat Chelsea (i.e. it's a draw or Chelsea win):
| Bet £10 @ bookmaker | Your bet LOSES | Loss | = £10 |
| Lay £10 @ betting exchange | Your lay WINS | Profit | = £10 |
| Total | = £10 - £10 = £0 |
Again, you have a net profit of £0. You won £10 at the betting exchange and lost £10 at the bookmakers. It doesn't matter if Man Utd win, lose, draw, or explode, you've covered every outcome. You haven't made any profit yet in Stage 1, but by doing this you release the free bet at the bookmakers. Genius!
Stage 2 - Your Free Bet
Can we just take the free bet money and run? Not quite. The bookmaker requires you to use the free bet once. This is Stage 2. If we apply the Golden Principle to the free bet we can use it completely risk free. THEN we take the money and run!
Final 3 points:
Type of Free Bet
It's important to determine what type of bet our free bet is:
Stake Returned - The best kind. These simply mean no deduction is made from your winnings on a bet. If you bet £10 at odds of 4.0 and win, your winnings will be £40. Nothing is taken away.
Stake Not Returned - These basically mean the odds are 1 point less. If you bet £10 at odds of 4.0 "stake not returned", it would be like the odds were 3.0. If you won your winnings would be £30, not £40. If you bet at odds of 8.2 and it was "stake not returned" it would be like the odds were 7.2, and your winnings would be £72 not £82. Simple enough.
Wagering requirements
Usually you have to use your free bet once, then you can withdraw it your profits. At some bookmakers the terms and conditions might say you must "bet through" 3 times before withdrawing. In this case you have to use your free bet 3 times. If the free bet is £25, bet and lay three £25 bets on different events. The upside to this is that the free bet is usually stake returned.
Minimum odds
To stop people betting on a dead cert, e.g. the sun will rise tomorrow, qualifying bets and free bets are sometimes restricted to events that have a minimum odds value. This is usually 1.7 or 2.0. Your lay odds can be anything as it's with the betting exchange not the bookmaker.
Summary - How to Make Money From All This
Stage 1 - Qualifier bet - the bet you make at the bookmaker to release the free bet.
Golden Principle - match your bet. This releases the free bet at no risk.
Stage 2 - Turn the free bet into cash - use the free bet as many times as the terms and conditions require you to, then withdraw your winnings. Match your bet each time.
Theory is all well and good, but wouldn't you like to see a real life example?