What is Matched Betting?
Matched betting, or lay betting as it is sometimes referred to, is a method of attempting to remove the risk from gambling by placing wagers on both sides of a possible outcome (Burek May 21, 2013).
For example, a gambler might wager equal amounts that England would both win and lose its soccer match against France. In order to achieve a profit, this technique relies on free bet offers from sportsbooks. Many sportsbooks offer free bets to gamblers in order to attract new business (Murray-West December 6, 2010).
Crypto Sportsbooks are willing to make a relatively significant initial investment in order to cultivate a longer-term relationship with a gambler in the hopes of recouping their loss. According to industry sources, some books are willing to spend nearly $500 to attract a new customer (Murray-West December 6, 2010). Most free bets require an initial bet – $20 for example – in order to receive a free bet of the same amount (Guardian June 4, 2010). By using this free bet to offset the initial bet, a gambler could theoretically wager $20 on both sides of a match. If the initial bet wins, the gambler receives their original $20 plus the added winnings.
If the initial bet loses, the gambler receives the payout from the free lay bet minus the original $20. In either case, the gambler makes at least a marginal profit (Guardian June 4, 2010). While the idea sounds relatively simple, the reality is much more complex as the subsequent wager will have to be placed on a separate betting exchange which allows bettors to set their own odds (Murray-West December 6, 2010).
What makes them popular?
Betting exchanges like Betfair.com and others have become popular in recent years largely because they facilitate this independent type of betting which does not rely on official odds-makers (Shearer July 23, 2010). Users simply choose the odds they wish to offer on a particular outcome and wait for another gambler to accept them (Shearer July 23, 2010).
This ability proves useful when engaging in matched betting as a gambler can choose the exact odds needed to offset the original bet. In order to maximize profits from matched betting, experts recommend that gamblers should withdraw any money won as a result of the wagers rather than reinvest it in subsequent bets (Burek May 21, 2013). In order to combat that tendency, some sportsbooks require bettors to make multiple bets before their winnings can be cashed out (Shearer July 23, 2010).
However, such requirements are not an indication that sportsbooks view matched betting as illegitimate or illegal. Partially this may be due to the fact that the free bet is viewed as an investment designed to attract future business and the sportsbook is willing to accept some level of loss in that pursuit (Murray-West December 6, 2010). Additionally all sportsbooks and betting exchanges charge a commission on every transaction which reduces winnings from matched bets and ensures continued profitability (Shearer July 23, 2010).
How to approach matched betting?
There are several common strategy approaches to matched betting. Some gamblers prefer to find free bet offers and calculate payoffs manually (Guardian June 4, 2010). However, this method presents a definite element of risk as any errors in the calculation process can turn a matched bet from a sure thing into an ordinary, risky gamble (Shearer July 23, 2010).
For that reason, many websites have opened advertising themselves as a clearinghouse of sorts for matched betting (Murray-West December 6, 2010). Websites like OddsMonkey maintain a list of all available free bets along with their terms and conditions.
Once a particular offer is chosen, the software walks the user through the process of placing the original bet and laying the matching bet on an exchange (Murray-West December 6, 2010).
Typically, screenshots and detailed instructions are provided, however, it is important to note that such services do not accept any liability for losses incurred as a result of user errors during the process (Murray-West December 6, 2010). Some services charge a commission while others have advertising arrangements with other companies which allow them to serve customers free of charge (Murray-West December 6, 2010). Even with companies making the calculations for the average gambler, customers would be wise to exercise caution and avoid disreputable exchanges (Murray-West December 6, 2010).
Can you make money with Matched betting?
While there is little to no academic research demonstrating the profitability of matched betting, anecdotal evidence does suggest that at least some individuals have turned it into a source of income. Some members of online gambling forums in the United Kingdom claim to have made the equivalent of £30 per hour – about $48 USD (Burek May 21, 2013).
The author of a Huffington Post article alleges that he made roughly £800 – $1200 USD – in a relatively short period of time (Burek May 21, 2013). Another journalist from The Guardian made £770 in less than a month by taking advantage of free matched betting offers (Shearer July 23, 2010).
These winning are made even more lucrative due to their tax-free status in the UK (Shearer July 23, 2010). While not enough to serve as the sole source of income, they are attractive to many – particularly university students – as a source of supplemental income (Burek May 21, 2013). Rajeev Shah, managing director of Sports Arbitrage World (now Rebel Betting), went so far as to describe matched betting as “money out of thin air” (Burek May 21, 2013).
Such descriptions minimize the very real risk that matched betting could lure otherwise non-gamblers into more risky gambling behaviors. In fact, this is the entire premise behind sports books’ offer of free matched betting (Burek May 21, 2013).
Another old proverb opines that a fool and his money are soon parted. In spite of a widespread understanding that the odds are against the average bettor, proposition bets have managed to capture the public imagination and attract a significant number of new gamblers willing to wager on seemingly irrelevant and unpredictable events like the coin toss at the Super Bowl (Barnwell January 30, 2012).
Prop bets have come a long way from their humble beginnings in the bleachers of Fenway Park, and today they comprise a multi-million dollar slice of the overall gambling pie in the United States and around the world.
For those looking to beat the system, matched betting has emerged as a potential loophole in the system which may allow bettors to realize a profit without any risk to themselves. However, the complexities of matched betting represent a potential pitfall for any gambler who fails to properly calculate the odds or read the fine print of free bet offers. Even if gamblers turn a profit from matched betting, sportsbooks are betting that they will not be able to resist the urge to continue wagering increasingly large amounts of money. With casinos charging a commission on every transaction, even when the house ostensibly loses the house always wins.
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