So, I intend my blog to be mostly based around photography, cinematography and their aerial variants, but this particular post is the black sheep, a bit different... just because I thought you guys might like it and find it useful.

I want to give something back to the community by sharing the knowledge I have used to make a supplementary, tax free income that I have invested back into cryptos and STEEM. It requires a tiny bit of knowing and relatively little effort for what is quite often a decent pay-out.

...yeah

Last year I was a little low on cash. My job as a stage technician in the local theatre is such that I sometimes make considerable amounts of money in short periods of time, and sometimes endure long stretches without very much income at all. I needed to find a way to make a little extra cash on the side to feed myself and pay the rent without dropping too far into the red. So, as you do, I jumped onto Google and searched "How to become a male escort". It promised to be extremely lucrative, but required me to be at least a tiny bit charming and have a willingness to interact with human beings on some kind of level... so, I settled on trying my hand at matched betting.

I had not heard of matched betting before as I tend to shy away from traditional sport/casino gambling. The house always has the edge and besides, I don't like uncertainty. Initially, I wrongly presumed that matched betting was some kind of scam or system to simply improve your odds whilst gambling. Oh, how wrong I was.

So, What is Matched Betting?

Matched betting is the mathematical exploitation of the newcomer offers that betting websites use to lure new potentials. These offers are designed to get people hooked, but can be rung for a risk-free profit if you know how. They usually run a bit like this:

"Bet £10 and we will give you a £20 bet FREE".

Offers like these, my fellow Steemians, present us a wonderful opportunity for what is essentially free money. It is completely legal and best of all any profit is tax free due to being gambling profit. I'm going to walk through a little example below to demonstrate how I profit from these offers. I will base the example on the US Open Golf Tournament currently running, using odds I've obtained from popular sites. There are many calculators online that allow you to work out lay stakes, liability and profit quickly and easily (more on those terms in a second) whilst removing the chance for error, but for this article I will include the math so that those amongst you interested can figure it out manually, should you wish.

Note: You'll see I've used the words "gamble", "bet" and "betting" quite often. These are misleading as the system used to profit out of these offers is not gambling in any sense. It is essentially risk free money, so long as you don't mess up!!

Before our example, take a look at a little required terminology:

Back Bet - Betting that somebody/something will WIN

Lay bet - Betting that somebody/something will LOOSE

Stake - The amount of money you are betting or "staking"

Bookie - Your general run of the mill betting sites that allow you to place back bets.

Betting Exchange - A website that allows you to act as the bookie and place lay bets.

Liability - The amount that you have to pay out if your lay bet looses at the Exchange. If you lay bet £10 and loose, you loose your £10 stake but also have to pay out extra to cover the winnings of the opposing better. Therefore you need enough money in the exchange account to cover your lay stake and the winnings of the opposing back better, otherwise you wont be able to place the lay bet and this system wont work.

The example in this post is based on the free bet received being a SNR free bet (stake not returned) as they are the most common. On SNR bets, the bookie pays out the winnings, but not the original stake. SNR bets are the most common type of free bet offered by bookies. If you use the online calculators be sure to select the correct "Stake Not Returned" / "Stake Returned" options for your bet.

Anyway, onto our example!

Placing a Qualifying Bet

Lets say that our newcomer offer at a popular site is, as mentioned above :

"Bet £10 and receive a free £20 bet"

How do we extract as much profit as possible from that free £20?

Firstly, we need to place our "Qualifying Bet". This is the bet we must place in order to receive our £20 free bet, because that bookie isn't just going to give us our opportunity for nothing, right?? The terms and conditions usually state that this bet has to be placed on odds at or over 1.5 and that the full £10 has to be bet, but check this for every offer, otherwise you may end up loosing money if you do not adhere.

Right, now then. Lets look at the US Open Golf Tournament. I can see that Rickie Fowler's odds to WIN at the bookies are (at the time of writing - 16/6/17) currently 4.5. We place this bet and stand to either win £35 or loose £10. If we stopped here we would be gambling....but, here's where the magic happens.

Next is where our utterly beautiful friend, the Betting Exchange, rides in to save us and deliver our profit. There are a few exchanges but the commission they take varies. For this example we will use 2% commission.

I can see on our betting exchange that Rickie Fowler's odds to LOOSE are 4.7. We are going to loose money on the qualifying bet, but we want to minimise these losses whatever Rickie Fowler's outcome. So, we need to work out the ideal amount to lay bet (bet Rickie will LOOSE) at the exchange. This requires a little bit of math... but don't be scared, its really not bad. After all, If I can do it, Trump could do it.

Formula for Lay Bet

Back Bet Odds / (Lay Bet Odds - Exchange Commission) x Back Bet Stake= Optimal Lay bet

In our example this translates to:
4.5 / (4.7 - 0.02) x £10 = £9.62 (<< actually £9.615 but lets round this up, shall we?)

So now we know that we need to lay bet (bet Rickie will loose) £9.62 at the exchange. This will minimise our losses on the qualifying bet.

Let's take a look at the qualifying losses in full

If the bookie bet wins : We make £35 profit at the bookie and loose £35.59 (your stake plus liability) at the exchange = £0.59 LOSS
If the Exchange Bet wins: We make £9.43 profit at the exchange and loose £10.00 at the bookies = £0.57 LOSS

We are now either £0.59 or £0.57 worse off than when we started... but have released our £20 free bet for use.
IMPORTANT NOTE When placing the qualifying bet we want low odds as this minimises our liability at the betting exchange and maximises our profits.

Extracting profit from our free bet

Now comes the fun part. We repeat the exact same procedure as above, except this time we want to place our bets on a golfer who's odds are higher to maximise the profits. However, the higher the odds, the more money we need in our exchange account to cover the liability.

Looking at the US Open again I can see that Si Woon Kim has odds of 17 to win at the bookies and odds of 23 to loose at the exchange. So, if we place our free £20 on Si Woon Kim to win at the bookies, we stand to win £320 at the bookies.
We now need to work out the ideal lay bet stake to place on Kim loosing at the exchange. To do this we use the same equation as the qualifying bet, but -1 from the back odds as our stake will not be returned on our free bet at the bookies.


(Back Odds - 1) / (Lay Odds - Commission) x Free Bet = Lay Bet Amount


In our example this would work out as:
(17 - 1) / (23 - 0.02) x £20 Free Bet = £13.54

So we lay bet Kim (bet he will LOOSE) at the exchange for £13.54. Our liability for this bet will be £306.46 at odds of 23, so we need to ensure that we have at least this amount in our exchange account in order to be able to place the bet.

So, lets say Si Woon Kim has played and the result is in. What is our profit??

If our £20 (FREE) won at the bookies, we have won £320 in profit and have lost £306.46 at the exchange = £13.54 PROFIT
If our lay bet won at the exchange, we have won £13.65 at the exchange and lost nothing at the bookies as the £20 was free = £13.65 PROFIT

If we deduct our qualifying loss of max £0.59 we have made a MINIMUM TOTAL PROFIT of drum roll......

Not a huge amount of profit, no. But with the online calculators it takes very little time to set up and place these bets. Suddenly, £12.95 for 5 minutes work doesn't seem too bad. During the recent World Cup I was lining up 5 or 6 of these matched bets every morning in under 30 minutes for a nice, healthy profit! Just remember to check those T&C's as there are quite often wagering requirements on the larger free bets offered. They'll offer you a free £200 bet, but require you to wager that amount x5, x10 or even x30 before you can withdraw anything!

I hope you all enjoyed the post and it wasn't too confusing. It's simple to do, but quite difficult to explain... as I am now fully aware! Please let me know if you have any questions and I'll do my best to answer them!

Cheers guys

Alex