Matched Betting Explained: How It Works and the Risks

How does matched betting work?

A typical offer works in two stages. First you place a qualifying bet with a bookmaker, which usually costs a small amount once it is matched. Then the bookmaker gives you a free bet, which you also match, and that is where any profit comes from.

Each bookmaker bet (the back bet) is matched with a lay bet on a betting exchange. The lay bet wins if your selection does not win. Because you cover every outcome, the result of the match matters very little. What matters is getting the stakes, odds and offer terms right.

Betting exchanges and promotions are not available everywhere. Whether matched betting is possible at all depends on where you live, including which US state you are in.

Back and lay bets explained

A back bet is a normal bet that something will happen. A lay bet is a bet that something will not happen; on an exchange you are taking the bookmaker's role for another customer.

When you lay, you risk your liability, which is the lay stake multiplied by the lay odds minus 1. Exchanges also charge commission on winning bets, usually a few per cent. Matched betting calculators include commission when working out stakes.

The qualifying bet: a worked example

For a normal bet, the lay stake that balances both outcomes is: lay stake = (back stake × back odds) / (lay odds - commission). Commission is entered as a decimal, so 2% is 0.02.

The closer the back and lay odds, the smaller the qualifying loss. This is why people look for selections where the bookmaker price is close to the exchange price.

The free bet: stake not returned

Most free bets are "stake not returned" (SNR). If the free bet wins, you receive the winnings but not the free bet stake itself. The lay stake formula changes to: lay stake = (free bet × (back odds - 1)) / (lay odds - commission).

Because the stake is not returned, free bets keep more of their value at higher odds. The trade-off is a larger liability on the exchange, so you need more money available to place the lay.

Risks and downsides of matched betting

Matched betting is often described as risk-free. It is not. The maths removes the risk of the result, but not the risk of mistakes or of the bookmaker's response.

• Mistakes: a wrong stake, the wrong market or a missed lay can cost far more than the offer is worth. One unmatched bet turns the process into ordinary gambling.
• Odds movement: if the lay price moves before you place it, your figures change. Place the lay immediately after the back bet.
• Liability: laying at high odds needs a large balance on the exchange, and that money is tied up until the event settles.
• Terms and conditions: minimum odds, eligible markets, time limits, maximum free bet sizes and payment method rules all apply. Misread them and you may not receive the free bet.
• Account restrictions: bookmakers can limit stakes, exclude you from promotions or close accounts, and their terms allow them to do this.
• Rules you must not break: opening more than one account, using someone else's details or acting on someone else's behalf breaks bookmaker terms, and using another person's identity can be fraud.
• Gambling harm: matched betting keeps you in close contact with bookmaker marketing, and it is easy to drift into unmatched betting.

Is matched betting legal and worth it?

In the UK, matched betting means using promotions as they are offered, and it is generally legal. Bookmakers are still free to restrict accounts that only take offers. In other countries the rules, the availability of exchanges and the tax treatment of winnings differ, so check what applies where you live.

Returns usually fall over time as welcome offers are used up and accounts are restricted. It takes time, careful record-keeping and enough funds to cover liabilities.

If you have ever had problems controlling your gambling, matched betting is not a good idea. Set deposit limits, keep a record of every bet and only use money you can afford to lose.