Mistakes in matched betting can occur, at first the general reaction may be to worry or panic however most of these errors are easily rectified, this article will dive into the top five matched betting mistakes most newbies make.
Video Walkthrough
Trying To Win All Your Lay Bets on The Betting Exchange
Mistake one is the age-old classic of trying to win the vast majority of your lay bets on the betting exchange as opposed to winning your back bets with a bookmaker.
There are generally two reasons why newbie matched bettors will make this mistake, the first of which is the most common, trying to protect their bookmaker accounts.
Bookmakers restrict the accounts of users who win more money than they lose by taking value, so it stands to reason that if you can win all of your profits and all of your bets on the betting exchange and lose the vast majority of your bets with a bookmaker, this is what you would want to do to give off the impression you are a losing punter who isn’t taking value from the bookmaker.
Bet365 Restricting My Account For Taking Value From Them
The second reason newbies fall for this trap is less common, a newbie could be looking to transfer money from a bookmaker account to a betting exchange should they have their money trapped in that account.
Money trapped in a bookmaker account can occur as a result of many different situations, extensive know your customer forms, anti-money laundering documents to fill in or the bookmaker asking you to provide documents regarding your monthly income just to name a few.
With either of these two reasons, the process of trying to win the vast majority of your bets on the betting exchange and lose as much as you can with the bookie generally relies on placing a back bet with a bookmaker at high back odds and then laying off that bet on the betting exchange Betfair or Smarkets using high lay odds.
On the surface this appears logical as betting a high odds generally results in losing back bets, however this is not always the case.
Betting odds are a representation of probability, taking the back odds of 8.5 we can convert these odds to implied probability which works out at around about 11.7% chance, although bookmakers odds are not a true reflection of probability as they weigh them in their favour the probability of a back bet winning at odds of 8.5 will be at or around this mark.
With a probability of 11.7%, we will win our bet just over one in every ten times on average and lose the remaining nine times.
Let’s assume we always place our back bets with the bookmaker at high odds of 8.5, we will achieve our goal of winning most of our lay bets on the exchange and losing most of the back bets with the bookmaker.
Again this all seems good for if we are looking to fool the bookmaker into thinking we are a losing punter, however, the problem arises when we get that one in ten win.
As we are backing at high odds with the bookmaker we also need to lay at high odds too, this means the liability will of course be large on the betting exchange on each of our lay bets.
When the one in ten back bet wins, all the money that we had previously been winning into the exchange as a result of backing and laying at high odds will come flying back to our bookmaker account, yes we will have lost nine out of ten back bets on average but on the tenth occasion all that money would simply slip back over to the bookmaker.
When matched betting we have an edge which is derived from bookmakers bonuses, as a result of this you will generally find that you end up with more profit in your bookmaker accounts because that’s where the edge is coming from.
Unmatched Bets
Mistake number two in matched betting is unmatched bets, this error is specific to placing lay bets on a betting exchange.
When placing a lay bet on a betting exchange, the concept is slightly different from that of a bookmaker who would take your bet no questions asked.
Bookmakers are not in charge of betting exchanges, people bet amongst each other on these platforms, you have the choice of placing a back bet or you have the choice of placing a lay bet and being in the role of a bookmaker.
As the concept relies on market participants to place bets against each other there must be enough money available at the odds you’re looking to place a lay at provided by another exchange user to fully match up bets with.
If there isn’t enough money or liquidity available at the odds you are looking to place a lay bet, its likely that only a portion of your bet will be matched up with the exchange user on the other side of the bet, if this occurs you will have an imbalance between your back and lay bets which will leave you with unwanted exposure.
This isn’t a big problem and it’s a very easy fix, check out the video below for a tutorial on rectifying unmatched bets.
Mixing Up Liquidity And Liability
Both associated with betting exchanges, these two words sound similar but are very different in what they actually mean.
Liability
Liability is the amount of money you’re exposed with any bet that you place on a betting exchange, let’s say I lay £10 at odds of 3.0, my liability or amount of money I stand to lose on that bet is £20.
The liability formula on a lay bet is worked out by taking the stake and multiplying it by the lay odds and then taking away the stake, £10 x 3.0 – £10 = £20 liability.
Liquidity
Liquidity is the amount of money going through the market and therefore the amount of money available at each of the individual prices on the exchange with every passing second, there is much more to liquidity but for matched betting understanding the basic concept is all that is required.
When matched betting we should look at the number underneath the lay odds at the price we are looking to place our lay bet.
The money underneath the odds is the liquidity, ensuring that the lay stake we are using is less than the total amount of liquidity at the desired price is required to ensure our lay bet gets matched.
Commitment
Commitment holds many people back from earning lots of money when they come into matched betting
I believe a big part of this is down to the stigma around betting in the UK, the general public perceives betting as a recreational form of entertainment with a significant chunk believing you cannot earn a living from the betting industry, which as we know is not the truth.
Informing people of your matched betting journey and being met by negative feedback can be very disappointing and not feel too great on a psychological level, my advice would be to try and disregard what these people think, if you’ve got an edge and you can quantify the edge which you can with matched betting, hit it as hard as you can to make as much money as possible from the online side hustle.
Mixing up Variance For Gambling
Mixing up variance for gambling and mindless betting is the final mistake on my list.
The matched betting concept is very, very basic as we all know, back, lay unlock a free bet repeat for a profit.
This system is very easy and very relatable which feels great as you earn more and more money each time you apply it.
When variance is introduced to matched betting, as this system no longer brings in a small guaranteed profit each and every time newbies can start to panic.
The most variable offers in matched betting such as the 2up offer, the extra place offer and low-risk casino offers are generally what get to newbies and impact their psychology once they go on a downswing.
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If you are in this position yourself I would recommend reading and understanding the characteristics behind the variance that comes along with each of these offers.
After this, if you fully accept the reality of the situation and the reality behind the way the maths works (which can be confusing at first) you are then ready to jump into variable matched betting offers, be sure to only partake in an offer which has a positive expected value.
