Mention matched betting and you will probably pass for a naive gambler or worse. But it is a perfectly legit and nearly risk-free way to generate an online income. Only a few hours of work a week are required. And no need to be a football or tennis fanatic. Ideal for travelers with an internet connection

How Does Sport Betting Work?

How Do Bookmakers Make Money?

And How Does Matched Betting Work?

Where Can I Find Matched Betting Opportunities?

Is It Legal?

Where’s the Catch?

Any Tips for a Beginner?

Any Other Options?

Who Is This Really For?

How Does Sport Betting Work?

Say you tell a friend: “I bet you 5 bucks that you can’t finish that enormous sandwich”. Your friends smirks and takes the bet. You are technically backing the bet, and your friend is laying it.

When people bet on a sports event, they will similarly back a specific outcome, and the bookmaker will lay that bet at given odds. Odds are reflecting the expected probability for a particular outcome. For example, numerical odds of 1.5 translate to a 66.7% implied probability for that particular outcome. If you bet 100$, you could win 50$ coming directly out of the pockets of the bookie.

profit = stake x (odds – 1)

In contrast, the bookie has a liability of 50$.

How Do Bookmakers Make Money?

They systematically tweak the odds in their favor. With balanced books, their profit is guaranteed, regardless of the outcome. This is an extremely lucrative and competitive industry.

To attract punters, the bookies regularly try to outbid each other offering big cash incentives. A common welcome bonus will be along the lines of “Deposit 100$ and get 100$”. There are also plenty of less generous offers for returning customers. The ideal punter bets a small sum regularly.

There are usually requirements to be met before that bonus can be withdrawn. For example, a 4x turnover requirement on the 100$ deposit means that you have to place bets totaling at least 400$ before being allowed to make a withdrawal.

There are hundreds of online bookies, with the industry being traditionally particularly present in the United Kingdom.

How Does Matched Betting Work?

Online betting exchanges allow you to lay a bet. In other words, you can be the bookie. This allows you to place a risk-free bet. The outcome becomes irrelevant. In financial terms you are hedged.

Example: if you back a bet at a bookmaker, and you lay the exact same bet at the same odds at the exchange, you break even in any case. In reality you usually have to pay a small commission to the exchange, but let’s ignore this for this example. Now if you got a bonus it gets interesting. Say you deposited 100$ and got that 100$ bonus. You now place a 200$ bet at odds of 2 at the bookmaker, and lay the bet at the exchange with a liability of 200$. The implied probability is 50%.

If you win, you end up with a profit of 200$ at the bookmaker, and a loss of 200$ at the exchange. Conversely, losing your bet equals a 200$ loss at the bookies and a gain of 200$ at the exchange. Repeat until the withdrawal requirements are met, or until the entire sum ends up in your exchange account and that bonus is yours.

In reality, the odds between the bookmaker and the exchange usually differ a lot, and you need to find good opportunities with close odds. With a bit of experience you should end up recouping 60-80% of the bonus. There are many types of bonuses that can be used for matched betting, some necessitating fairly complex strategies. But the principle remains the same, you always place risk-free bets to recoup as much of the bonus sum as possible.

Where Can I Find Good Matched Betting Opportunities?

matched betting betfair
Betfair mobile and desktop applications

You can of course do all the hard work manually. Betfair, by far the largest exchange, generally offers the best odds and is the default choice to lay a bet. With a bit of experience you can develop a good intuition of where and when to find good opportunities.

In reality, it is much easier to just use one of the online services that have appeared in recent years. They provide search tools that allow you to rapidly find favorable matched betting opportunities, and also keep feeding you bonus offers and tutorials for more complex undertakings. OddsMonkey is a good although somewhat UK-centric choice. But their OddMatcher software makes it easy to find the best odds from hundreds of events and bookmakers.

It is perfectly legal as long as online gambling is allowed in your country. Is it moral? Well, the final judgement up to you, but this is essentially a zero sum game. The money you are making is coming from the bookmakers. But you are not exactly making the world a better place either.

Where's the Catch?

Yes, there are a few. First, it’s not totally risk-free. You are the main liability. You can be hasty, make mistakes. Or in very rare cases the bookie could cancel a bet, leaving you exposed. Which at high odds can quickly amount to a larger sums. The risks are small, but not to be overlooked.

Second, bookies are bad losers. Matched betters are regularly targeted. If you do it long enough your account will eventually get “gubbed”. That is restricted or even shut.  To prolong the life span of your account you can try several more or less time-consuming strategies, although the results are fairly random.

Third, those juicy welcome offers eventually dry up. The reload offers are less generous. You end up running after a few bucks here and there. Yes, it is possible to do so efficiently and quickly, but at some point you might end up asking yourself if it is still worth the time and effort. However you should have enough welcome offers for a year or two if you don’t get too greedy.

Fourth, if you are traveling you will raise flags fast at a lot of bookmakers. A VPN is a solution, but it adds a layer of complexity.

Fifth, it can’t be scaled. You can’t expand your operations much once you figured out the basics.

Any Tips for a Beginner?

Take your time to learn and understand what you are doing. It is overall simple, but the devil is in the details. Being methodical is crucial. So is good book keeping. Small fees such as currency conversion can quickly add up.

Make sure you have a sufficient bankroll. If you go for high odds and win, which happens fairly frequently, you quickly end up with large sums at the bookies. Do you have sufficient funds at the exchange to keep matching your bets until you can withdraw the sum? Stay humble, especially at the beginning.

Read the terms and conditions, every time. They are similar, but sometimes a small difference can result in a loss. Too many rollovers at poor odds erode your profit swiftly.

Are you using an obscure bookie with a bad reputation? There is not much you can do if you get permanently locked out of an account.

Know thyself. Be honest. Are you a gambler? Do you like to bet? Can you control yourself? If not, best to stay away, all those websites are specifically designed to appeal to impulsive people.

Any Other Options?

There are quite a few other methods to generate an income from sports betting. Occasionally, usually involving more complex combinations, the difference between lay and back odds can be in your favor. This creates a so-called arbitrage opportunity. Sports arbitrage is risk-free, but also extremely competitive and fast moving. So it’s best to start with matched betting.

Then there is sports trading. This is not risk-free anymore. Moreover, it requires an excellent understanding of betting exchange dynamics.

Finally, most online bookmakers also have online casinos with bonus offers. These offers sometimes have a statistically positive expected value. In other words on average you would be making a profit if you follow the optimal strategy. Is it risk-free? No. OddsMonkey lists quite a few of those offers.

So Who Is Matched Betting Really For?

People mathematically inclined, or with a background in statistics, computer science or finance will find it easy. But it can be learned by anyone in a matter of days. If you have an addictive nature or simply hate computers, look elsewhere!

Rather than considering matched betting as the key to a digital nomad lifestyle or a way to ditch your current job, it’s best to view it as an opportunity to generate a small part-time online income when and where you need it. Perhaps to keep you afloat in cheap countries for a while. Or to earn a little extra cash for a project. A nifty little option in your income tool box!