Matched Betting

A few months ago I became aware of the term matched betting (I am very busy not slow on the uptake) and was intrigued to know more about something I had never heard of.

On closer inspection I realised that the term is just another name for bonus arbitrage and an attempt at dressing up an old chestnut so that it can marketed all over again as "no risk, regular income from your home!", which it isn't. There are risks, income is not guaranteed and short-lived if it is.

Bonus arbitrage is a form of pure arbitrage. In pure artibtrage you are attempting to buy and sell something at different prices so that an immediate profit is locked in. For example, you might agree to buy something at £2 and at the same time you have someone waiting to buy that same item from you for £3. If all goes well then you have made a £1 profit. However, if on paying your £2 to receive the item the buyer reneges on the deal then you are left with a £2 item that you don't want. You are down £2. This same problem rears itself in bonus arbitrage.

All bookmakers are competing with each other and the exchanges for your business. Bookmakers will often put up offers to attract new accounts. Such offers might be a free bet, an add-on (e.g. you put £100 into your account and the bookmaker adds another £100), a money back guarantee in certain situations (e.g. your money back if there is a red card in a soccer match) or there will be some sort of rebate.

In bonus arbitrage you are essentially doing the same as in pure arbitrage, backing and laying an outcome to turnover your capital to qualify for the bonus. Although you can be more lenient as far as the buy and sell prices are concerned because the bonus will compensate you if the lay price is the same or slightly higher than the back price. However, care must be taken to account for a price differential and commission charge that might eat into any potential bonus.

Bonus offers are loss-leaders given by bookmakers to get you to open a new account. You cannot expect regular offers, if you are a winner. You could well be shown the door. As soon as your account is open and you have placed your first bet you are just an ordinary bettor thereafter. Matched betting is supposedly "a risk free income for life". However, there are just not enough bookmakers to achieve the second part of that bold claim and the first part is not true.

There will often be various conditions that will come with these offers. An obvious condition being that you cannot withdraw your money unless you have turned over your capital so many times. In other words you cannot withdraw your money after getting the bonus and not having placed a bet. The bookmaker is hoping that you gamble away your bonus.

If you perform a bonus arb correctly then the losing back side of the arb will be with a bookmaker and the winning lay bet will be on an exchange. To all intents and purposes you have lost money to the bookmaker, Betfair or other exchanges won't be bothered that you won the lay bet because you are taking money from another trader. However, there is a condition that is never mentioned, bookies don't like arbers (people who use arbitrage). If you start winning money on the bookmaker side of the arb or it is obvious that you are arbing then life will made difficult for you.

Just as casinos pass information between each other about card counters at blackjack tables (see Griffin Book) so bookmakers pass information between each other too. Bookmakers run a blacklist database and it is common for an arber to get multiple exclusions or closures from many bookmakers at once as soon as an arber has been flagged. One would think that makes bookmaking a cartel but the authorities let it pass. Bookmakers know amongst themselves who is opening multiple accounts (probably with the assistance of credit card and other payment agencies) so don't imagine that you are pulling the wool over the bookmakers' eyes. After all, bookmaking is not a charitable organisation and you are not a charitable cause.

Even if you do hide your intentions and manage to get an arb on then you will soon have your account restricted to the point where you will only be able to bet a pound or two and that is hardly going to pay the weekly bills. Eventually, your account will be closed altogether and that "regular income stream" has suddenly become a dry well. Worse, a bookmaker may decide that it has made a "palpable error" in other words, you got the better of the bookmaker's mistake and the bet will be reneged on. You will receive your stake back and your account could well be restricted or closed thereafter. This also means that the other leg of your arbitrage is now left bare and so you better start praying it wins.

Matched betting is not a get rich quick scheme, there are no such schemes. You could well lose if a bookmaker decides not to pay out and the other leg of the arb loses. Any profits made will soon dry up as the number of new accounts you can create dries up too. Untold wealth there is not. Think about it for one moment. If matched betting is risk free and guarantees wealth then everyone would be doing it to the exclusion of all else. Bookmakers would go bankrupt. Exchanges would become moribund. Both are alive and well because matched betting is not what it promises to be.

You may have noticed books with Matched Betting in their titles on Amazon, many authored by the same person. I don't recommend that you waste money buying any of those books. You only have to look at the sales ranks for those books to see that few people touch them. Most of the "glowing" reviews for the books are unverified by Amazon and may have been written by people who either don't exist or who have never read the books, if you get my drift. Besides, you have learned everything you need to know about matched betting by reading this article.

Although matched betting is not a scam, the selling of books or operating websites telling you how to do such a simple activity is a scam. Books and matched betting websites contain no more than what I have told you and are just published to take your hard-earned arbitrage money from you. Another scam you will see is perpetrated by blogs extolling the virtues of matched betting. These websites usually carry affiliate links to bookmaker accounts so that they can make money from your opening of a new bookmaker account. Try leaving a negative comment about matched betting on these websites and your comment will be deleted.

Bookmakers are aware of bonus arbitrage and make it harder to achieve year on year to the extent that offers soon dry up. They will tolerate it to a small degree in the hope that you make a mess of it and if you don't then you will be restricted or closed down. Matched betting might make for a short-lived diversion for some people with no interest in sports betting, who just want to make a little money before moving on to something else. Something like stoozing, doing surveys for cash, offering yourself for paid medical experimentation or whatever else is today's easy money ploy. Eventually, all roads lead to hard work.

By all means give matched betting a try but don't expect to get rich and to be doing it for the rest of your life from a sunny beach. Do not pay a penny for books on matched betting nor to websites offering you an easy income from the comfort of your own home. Often these websites will include matched betting in their ebooks. The only way to make a long-term regular income from betting markets is through sports betting and trading and there are no short-cuts. Also, don't blow your easy money on sports trading without having fully researched how you are going to gain an edge and certainly don't try scalping.

  • Don't pay for books or sign-up to websites teaching you how to do matched betting. They just want to cream off your profits.
  • It costs nothing for you to learn how to perform matched betting. 
  • Matched betting is not 100% risk free.
  • If one side of a bet reneges on the bet then the other side of the bet is now live and can be lost for 100% of its value.
  • A bookmaker can refuse to honour a bonus and so the other side of your bet can lose money through commission or slippage.
  • If you start winning from a bookmaker, your account will be closed.
  • Bonus offers are not forever and matched betting cannot be regarded as a permanent source of income.

Further Reading

2 comments:

  1. Very useful article.

    Before I discovered trading, I used a well known matched betting / offers service. Yes, I made some money from it but accounts were being restricted left, right and centre.

    I think within 3 months, I was at a point where it just wasn't viable anymore.

    I know of some people who use multiple accounts and different IP address to 'fool' the bookies but it's a lot of work.



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    Replies
    1. Matched betting is a rebadge of bonus arbitrage, designed to make beginners give their profits to (essentially) scammers offering services and books on matched betting.

      If a beginner can't work out a simple arb then trading is probably not for them.

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