Matched Betting: A Lucrative Side Hustle?
A few months ago I received a request to publish a post about a weird way some people make money, and the post was a surprise hit. Since then I have been on the lookout for odd jobs, interesting side hustles, and interesting ways to make money. Some of these ideas may work for you, or you may find they are interesting to read about. Today, Ms. FireMum explains how she makes money virtually risk free with matched betting.
Now before you dismiss me as a lunatic and hit that close button, hear me out. Pure betting or gambling is a fool’s game. I know that you know that everyone knows that. But matched betting is NOT gambling. It is risk-free promo arbitraging – precisely, making arbitrage bets to take advantage of betting promotions.
What on Warth is Matched Betting?
Let’s step back a bit. Matched betting started in the UK when the betting market became increasingly saturated. In order to entice customers and increase their active client list, bookmakers started offering promotions to join their site. Some very clever people came up with a way to take advantage of those promotions AND avoid the risk of losing their money.
Most bookmakers often offer a sign-up bonus. This usually comes in the form of “Deposit $100, and we’ll match it with a $200 bonus bet”. That bonus bet is essentially free money. But the bookies aren’t stupid; they don’t want you to deposit $100 and withdraw $300, straight up. They want you to put the money back into the system by betting on a game before withdrawing the money out (or, better still, lose all your money).
Here’s how we make it risk-free. The matched betting scheme, in short, is to make opposing bets that cancel each other out. For example, in a Liverpool vs. Newcastle match, I place a bet with the bookmaker Ladbrokes that Liverpool will win. This is called a back bet. I then place an opposing lay bet with a betting exchange (e.g., Betfair) that Liverpool will NOT win (importantly, this also covers a draw). The two bets cancel each other out. Either you win at Ladbrokes and lose at Betfair or vice versa. Zero Sum.
What this gets you is the $200 bonus – risk-free! All yours for the taking, and you still haven’t lost your $100 deposit.
No way – you haven’t accounted for the spread!
But wait – you say. It’s impossible to find exact odds between bookies, so how does this become a zero-sum game?
That’s true, and this is where a good matched betting calculator and match finder comes in.
Matched betting calculators are freely available on the internet, and they all work the same way. You plug in the odds given by the bookmaker, and the odds offered at the betting exchange. You’ll want the odds to be as close as possible (ideally the same) to reduce your spread loss. The matched betting calculator then calculates the amount you should lay at the exchange with your opposing bet so that your spread loss is as small as possible.
To keep costs to a minimum, you could manually find the best matches yourself. I personally chose to subscribe to a premium match finder to find the matches for me to save time wading through the myriad of matches offered by the bookmakers.
Because bookmakers odds often differ, the amount you can extract from a bonus is lower than the bonus itself due to the spread difference. This can range anywhere from 20% to as high as 80%, with most opportunities sitting between the 70-75% mark. This means that you’re only likely to extract about $150 out of your $200 bonus bet. That’s still a $150 profit, tax-free*!
*Gambling profits are considered winnings and not subject to income tax in Australia.
Okay, so how did you do?
Here are my stats after my first week of matched betting.
- Initial capital: $1200 (fully retained)
- Number of bookies played: 2
- Total bonuses on offer: $700
- Total cost: $23.50 (for the match finder subscription)
- Total revenue: $571.55 (Includes losses from spread difference)
- Total profit: 548.05
- Bonus extraction rate: $571.55 ÷ $700 = 81.65%
And here’s a record of all my bets. Bookies and matches redacted as I don’t want the bookies to figure out who I am and ban me – I’m still in the game!
My Top 5 Observations
It’s an Active Income.
You have to work for it. Even with the premium match finder’s help, I was spending a couple of hours every night looking for the best matches to place bets on. This was more so because I was doing multiple bets with two bookies. Having a small starting bank also limited the types and amounts of bets I could make in a single day, which meant I had to strategize my moves. A larger float would make your progress quicker – but please don’t go all in with your emergency fund.
It’s all too Easy to Make Human Errors.
For example, I didn’t pay attention to the liquidity available on Betfair before placing a lay bet, resulting in one of my opposing (lay) bets not getting matched. Luckily it was matched at the very last second before the game started, otherwise, I would have been hit with a $150 loss due to a rookie mistake. Human error can wipe out your profits and capital altogether – especially if you’re placing bets with larger odds.
If you live in a non-restricted state, your profits can be bigger. There is legislation in Australia that limits bookmakers from actively shoving signup bonuses into people’s faces to try and entice them to start gambling.
Call it responsible gambling laws – certain states are more restricted than others. I live in a restricted state which naturally limits the amount of bonuses available to me. If you live in Queensland – the world is your oyster. Go forth and prosper. The land of plenty won’t last though – on May 26th, 2019, all signup bonuses will be banned.
Watch Those Bank Transactions!
With new responsible lending laws coming into play, banks and financial institutions will be closely scrutinizing borrower’s expenses. Most won’t look at gambling expenses favorably – and matched betting is a bit hard to explain away. If possible, set up a separate bank account purely for matched betting, and keep all transactions on Paypal or a debit card. Avoid using credit cards because it will be treated as a cash advance.
Be Completely Objective.
Matched betting is risk-free because the math is sound. Place your arbitrage bets exactly as calculated. Now, if you have gambling tendencies, or if you find yourself leaning towards making a punt just because you think your team will definitely win… do yourself a favor and stop. Close your betting accounts and find another side hustle. The last thing you (and I) want is to go into a downward spiral of gambling and chasing losses.
Can you Match Bet in Other Countries?
If you’re in Australia and the UK – yes, absolutely. Matched betting is huge in the UK, and is just starting to take off in Australia. It is harder to do in the USA because of gambling restrictions, but it can still be done, depending on which state you’re in. I’ve also heard of people successfully matched betting in Europe, South and Central America, and even India. There are many websites and forums dedicated to sharing knowledge on how to match bet successfully – a simple Google search should turn something up in your country.
Is it Sustainable as a Side Hustle?
After the signup bonuses run dry, there are often other promotions available to existing customers. According to experienced matched bettors I’ve spoken to, these are apparently more lucrative than signup bonuses. I personally haven’t gotten to this stage yet. These existing customer promotions are what keeps matched bettors going for years.
There is also a risk well known to matched bettors: gubbing. Bookmakers don’t like unprofitable customers – no prizes for guessing which group of customers are amongst the most unprofitable. Getting gubbed – or banned from being eligible for promotions – is a badge of honor among matched bettors and is a sure way to cut your match betting career short. There are ways to avoid this of course, but even with the best strategies, having your account promo-banned is inevitable.
The other contributing factor to the longevity of a matched betting career is time. If you have lots of time on your hands, that’s one less barrier to cross. Mums in the UK have done this for years (if you don’t believe me, check out mumsnet.com where you’ll find many threads dedicated towards matched betting). I personally struggle to find a couple of hours to fit matched betting in among my other obligations (work, family time, chores, parenting, walking the dog, etc).
So – even though the profits are great, I’ll call it a day after I’ve milked all the signup bonuses. Whilst it sort of fits into our wealth strategy (growing our income) the fact that it requires regular, active management turns me off.
There’s the moral factor as well. I don’t support gambling but matched betting is different; personally, I see this exercise as one-upping the betting agencies. Though I can appreciate that some people will want nothing to do with gambling in any shape or form. Your mileage may vary. Who knows – you might find matched betting extremely suited as a side hustle.
Ms. FireMum is a seasoned investor who recently discovered FIRE. She is on a mission to achieve FIRE for her family by her mid-40s. Her blog is filled with her stories about being frugal, saving, investing, and learning new things on her family’s journey towards financial independence