Building a Bank with Matched Betting.
(and creating a cushion against premium charges at the same time).
When you start trading the first thing you need to do is provide a bank which you are prepared to lose. If you lose it you then need to find another one. Trading is risky, particularly when you are learning how to do it, and most people blow at least one bank in the process.
So how about using the bookies own money to create your trading bank? This is quite easy to do by a process known as matched betting. You will still have to find some money to start off with, but as matched betting is risk free, you can use this money to build yourself a bank to start trading with. How much you can earn from this depends somewhat on whether you have already got accounts with bookmakers, since matched betting makes use of the opening account bonuses which many bookies offer to new customers.
Briefly, a simplified explanation of matched betting is as follows:
Suppose I find a bookmaker with a £25 free bet for opening an account. I need to deposit and bet £25 to get the free bet and then I have to bet with the free money before I can withdraw any winnings. Suppose I bet my first £25 and then lay it off at Betfair so that I am hedging for an equal small loss whether it wins or loses (there are spreadsheets available to calculate the required lay amount), then I do the same thing with the free bet (although I have to calculate this slightly differently because I don’t get the stake back if the bet wins at the bookie).
If I choose odds which are reasonably close matches at the bookie and Betfair I should make about 75% of the free bet value as guaranteed profit. I can then repeat this at other bookies and build my bank completely risk free.
As always, nothing is quite that simple. Some of the free bets are stake not returned (as above), some are a refund if the first bet loses, and some have wagering requirements, meaning that if your bet wins at the bookie you have to place bets totalling several times the value of the free bet before you can withdraw. You can of course hedge these bets as well, but unless you are lucky enough to find arbs (where the price is lower at Betfair than at the bookie) you will make a loss on each bet which will erode the free money. There comes a point where free bets with wager requirements become non-profitable because of this. However there are still a good number of bookies with worthwhile free bets.
There are several finer points which you should be aware of before you start matched betting. These include rogue bookies, rules differences between bookies and Betfair on some sports, rule 4 on non runners in horse races and the widely differing free bet values on offer at the same bookie, depending on how and when you sign up. In order to make the best use of these offers, which you can only do once for each bookie, you need to find the best offer available and use the best information and advice that you can get. You also need to learn how to tell the difference between stake returned and stake not returned free bets, and how to treat each sort to maximize your profits. None of it is particularly difficult, but it does require a little care and attention to detail.
Examples of the difference this sort of thing can make:
1. Sign up to William Hill via one of the links on a free bet site and get a £25 free bet. Sign up via the best available link and get a £60 free bet.
Use your £25 free bet at odds of 3.25 at William Hill and 3.4 at Betfair and make £15.95 profit (a £60 free bet at these odds would produce £38.28 profit). Use your £60 free bet at odds of 6.5 at William Hill and 7 at Betfair and make £45.11 profit.
2. Sign up to a bookmaker such as 888sport which has a refund on losing first bets. Match out their £20 offer incorrectly and win £0 if it wins. Match it out correctly and win around £15 either way.
As you can see, we are not talking about pennies here. The correct advice is crucial and can make you a great deal more money than just going ahead with the minimum of information and taking the first free bet you see.
The Premium Charge
One useful side effect of matched betting as far as traders are concerned is that it helps to stave off the Betfair premium charge. Unlike for trading, where the commission you pay is only small compared with your stake size, you will be paying full commission (or implied commission when they lose) on your lay bets associated with matched betting. This will add up and give you a bigger margin against the premium charge should you become successful at trading. You will therefore not only make money from the matched betting, you will also potentially safeguard some of your trading profits as well. Unfortunately this becomes less effective once you are paying or near to paying the premium charge, since winning lays can actually tip you over the threshold. It is much better done early, when you are well clear of premium charges.
If you are interested, there is all the information and tools you need to make the very best of matched betting, along with an up to date list of over 100 free bet offers and loads of helpful articles and videos about various betting related subjects at The Juicestorm BetClub. This is a friendly members only club where you can learn various different techniques and get one-to-one help and advice in the live chat room. Membership costs just £9.99/month.