Matched betting is a way to guarantee a profit from the free bets that the bookmakers are always advertising to entice new customers. This can be very lucrative as the bookies always have offers on that can be used to your advantage. I personally make at least £500 a month tax free from doing this.
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So take the following new account offer at a well known bookmaker.
You Bet £50 on any sport with odds above 1/2 (or 1.5 in decimal odds - you'll learn about these later) and they credit you a with a £50 free bet (The £50 stake is not returned with free bet winnings).
So how can we guarantee a profit?
There are now bookmakers that act as betting exchanges - this allows you to bet against the same thing you have bet for at the bookmakers (these exchanges charge a commission of up to 5% on your winnings though some are lower). The to bets basically cancel each other out. The odds may differ slighly meaning at odds of 1/1 (2.0 decimal odds also known as evens) you could win £50 at the bookmakers and lose £52.50 at the exchange (because you bet against the outcome) meaning you are £2.50 out of pocket with a £50 free bet still to come. This is known as the qualifying loss as it is the price you pay to earn the free bet.
A practical example - bookmaker sign up offer
So imagine you place your £50 bet on Manchester United to win a match at odds of 1/1 (2.0) this means if they win you will win £50 and also you get your stake back so you have £100 total (£50 profit at the bookmaker with a £50 free bet to come).
As the bet is "Matched" you will also have lost £52.50 at the exchange and so we are £2.50 down in total with a £50 free bet still to come.
If they lose you will have lost £50 at the bookmakers and won £47.50 at the exchange and still get your £50 free bet so we are still £2.50 down as you can see from the image below. Betting against an outcome is known as laying.
We then use our free bet to bet for (back) and against (lay) another event. Because the stake is not returned on the free bet we need to choose a higher odds bet to get a bigger return from the free bet. So lets place a bet at odds of 4/1 (5.0). So we find an event on the bookies website at odds of around 5.0 e.g Everton to beat Chelsea and use our free bet of £50. We bet against Everton to win at the betting exchange where the decimal odds happen to be 5.1 which means we need to lay £39.60 (there are online calculators that work this our for you).
If our bet wins at the bookmaker we make £200 pounds there and lose £162.36 at the exchange. If our bet loses we make £37.62 at the exchange and make nothing at the bookies.
This means we are £37.62 in profit from the free bet and after deducting our qualifying loss of £2.50 we have made a guaranteed £35.12 without actually risking any money.
To take advantage of this offer you will need to start with £50 to deposit at the bookmaker and £52.50 at the exchange (£102.50 total). For the free bet you will need to have £162.36 at the exchange to cover the bet if it loses. Depending on the outcomes of both bets you could end up with £300 winnings (incl deposit) at the bookmaker and having lost £214.86 at the exchange. If both bets lost at the bookmaker we would have £0 at the bookies and £247.48 at the exchange. To cover the first bet you will have deposited the £52.50 and won £47.50 giving you £100 at the exchange and a £50 free bet at the bookies. You will then need to add £62.36 to be have enough money to allow you complete the second lay bet. If that won we then have an extra £37.62 giving us £199.98 at the exchange of which we deposited £115.86 (£52.50 + £63.36). We also lost £50 at the bookies in this scenario so we take that off to get back our profit number (£199.98 - £50 - £115.86) = £34.12.
As you can see you need a bankroll of around £250 to complete this offer. You can start with smaller free bets e.g a £25 free bet would need a bankroll of around £125 but once you have taken advantage of a few of these offers you can withdraw your original £250 and just use your profit to fund your bookmaker and exchange accounts going forward and it soon mounts up. A reasonable starting sum helps massively as you can complete multiple offers at the same time rather than having to wait for the outcomes of each event.
Other things to note
This is not for everybody - if you have a problem with gambling or don't trust yourself not to veer off course then this may not be for you. It requires lots of discipline to ensure you follow the strategy and don't think you expect Man Utd to win so don't bother laying the bet (betting against it).
If your betting on obscure events or winning too much the bookmakers will eventually cotton on to what you are doing and restrict your account so you no longer qualify for free bets and can restrict the amounts you are allowed to bet. They always let you withdraw your winnings as there is nothing illegal or wrong with matched betting.
I recommend opening a separate bank current account (free) for signing up with the bookmakers it allows you to keep track of your profits much more easily and keeps your money separate so it's easy to see your profits. It's also handy to keep track of your bookmaker balances in a spreadsheet so you know where your money is.
You also need to make sure your partner understands what you are doing and is okay with it as it hard to believe that it's not too good to be true.
This is the basic premise behind matched betting and there are websites that make all of this much easier and guide you through all of the offers step by step. These services are worth every penny as you save a massive amount of time by using their calculators and offer calendars and they have a team of support staff there to help. My favourite is oddsmonkey (I will be reviewing them on here soon). We will be covering some of the more advanced strategies later but hopefully that's enough to give help you understand how this really is easy money.