Matched betting

Matched betting is a form of betting similar to arbitrage betting which can be used as a way of extracting free bets or cashback offers from bookmakers at very low risk.

Free bets and cash back

In order to attract new customers many bookmakers offer free bets or cashback offers.

With free bet offers a free bet will be provided after signing up and wagering an amount. The free bet is usually to the value of the initial wager up to a maximum limit.

Other bookmakers will pay a commission for every new signup that wagers above a set amount. Cashback websites can be used to collect the commission from your own sign up.

Theory

A common technique is to back an outcome at a bookmaker and lay the same outcome at a betting exchange. By both backing and laying the same outcome either the back will win or the lay.

For example consider a football game between Team A and Team B. Betting on the match result there are three possible outcomes, Team A wins, Team B wins or a draw. For the outcome where Team A wins a bookmaker offers odds of 3.0 while a betting exchange allows us to lay the same outcome also at odd of 3.0.

The back

We wager £50 on Team A winning at the bookmaker at odds of 3.0. If team A wins will will get a return of £50 x 3.0 = £150. If Team A does not win we lose the bet and get a return of £0.

The lay

When laying at the betting exchange we act as the bookmaker to another persons wager effectively betting against the outcome that we lay. As we wagered £50 on Team A winning at the bookmaker we will lay this outcome at the betting exchange.

We lay £50 on Team A winning at the betting exchange at odds of 3.0. If Team A wins we lose and pay out £50 x 3.0. If Team A loses we win and keep the £50.

The outcome

Either Team A wins or they do not win. We either win the back and lose the lay or lose the back and win the lay. The results of either outcome are shown in the following table.

	Team A wins	Team A does not win
Back	£150	-£50
Lay	-£150	£50
Total	£0	£0

In this example as the odds were identical and there were no additional costs we lost nothing on the bet. In practice that is rarely the case. Betting exchanges make money by acting as a broker and charging commission. In addition the odds at the betting exchange will usually be higher than at the bookmaker. Both these factors mean the outcome will usually be a small loss. Many match bettors use a spreadsheet to help determine the value of the lay stake and calculate the outcome of a bet.

This technique can be used to both unlock free bets and cashback and to extract the value of the free bet.

Stake returned vs stake not returned

Many free bet offers will not return the stake in the winnings. So if you were to make a free bet of £50 at odds of 3.0 on an outcome you would stand to win £50 x 3.0 - £50 = £100. In the bettors' slang a stake not returned free bet is often referred to as an SNR bet while a stake returned free bet is referred to as an SR bet.

In order to maximize the return of a stake not returned free bet high odds are desirable. As the odds increase the percentage winnings represented by the stake decreases as does the loss.