Some days at the office are better than others, and some of those other days couldn’t be over soon enough1. Over the years I’ve had days like this:
And I’ve had days like this (metaphorically speaking):
So it’s hardly surprising that my ears prick up each time anyone mentions earning a ton of cash by doing fuck all. To be honest, I don’t think it’s just me. In fact, I don’t think the quest for a free lunch is something which is limited to the humankind only. There isn’t a predator species on earth that would rather hunt than scavenge, and it all begins with the brutal frugality of nature. Squandering energy is a recipe for extinction; those that do get relegated to the Natural History Museum’s east wing. But I digress.
I don’t gamble in general2. Because: I hate to lose. Matched betting was my first foray into the world of online betting, and what a world that is. It wasn’t all bad, I did make some free cash; £938.02 over a little more than a month, to be precise3. And although the process was both time consuming and boring – so moverloving boring – the earnings are tax free. Hasa diga, HMRC.
How it works
Matched betting profits come from two sources: arbitrage and bookmakers’ promotional offers. The latter, once you chomp through all their new customer enticement carrots, can be rather unpredictable. The former will quickly land you on bookies’ naughty lists, which will result in closure of your online betting accounts. Bookies use Big Data these days, you see, and for some reason they dislike clients who match bets.
In betting arbitrage, just like in financial arbitrage, you exploit price differences and make money on the margin. That’s usually small change. But it’s easy and quick, and it is by far my favourite form of matched betting. Spot an opportunity, back £100 with a bookie, lay at the exchange, then all you have to do is wait for the bet to settle. Bingo! you’ve made £6.85 in less than a minute.
The downsides are that (1) opportunities where you can lay in excess of £100 at the exchange at good odds are few and far between and (2) Big Data: the higher the stakes, the quicker you get onto the aforementioned naughty list and have your little operation shut down. Shame, that.
Most promotional offers come in the form of free bets, and you can expect to “earn” about 80% of the free bet amount. E.g. a £5 free bet = £4 cash. There’s usually qualifying criteria to be met, so depending on the qualifying criteria and the free bet amount, and taking into account an occasional newbie f*up (they happen), at times you can end up “earning” an hourly rate that’s not much higher than the minimum wage. The higher your tax rate, the better it works out once you take into account imputed tax.
There are also deposit bonus offers where you have to wager your bonus many times over before you’re allowed to withdraw it, enhanced odds, risk free bets, profit boosts, and so on. Again, turning these into cash takes time and effort.
Is it worthwhile?
Not really. Rate divided by time equals profit (54th Rule of Acquisition), and herein lies the problem with matched betting. The rate is too low for my liking, and it decreases further as bookies begin to place restrictions on your accounts.
Having said that, it can be doable if you already enjoy betting on sports, or if there’s a particular sport (say, football) that you watch on telly rain or shine. Then you might as well pick up a few in-play bet offers, seeing as your behind is going to be glued to your sofa for the duration. Otherwise it’s a chore, and a tedious one at that.
Whatever the downsides of your day job, it’s got to be more interesting than matched betting, as well as better paid. The way I see it, if I’m going to be selling time for money in evenings and on weekends, it’s more profitable for me to try and push for a higher bonus bracket at work than to sit in front of a screen placing bets so as to pick up £25 on Saturday horse racing.
Where do I sign up?
But if you still want to give matched betting a go, I recommend signing up to Odds Monkey. They have newbie guides and the web-based software that finds matched betting opportunities. I don’t do affiliate/referral links, but some FI bloggers do. And if you’re going to sign up anyway, why not do it through a referral, help a fellow FI-ed out. Quietly Saving has a referral link on her website.
Here’s a random collection of tips I wish I had read before I started matched betting:
- Try before you buy. An annual subscription to a matched betting site such as Odds Monkey can be cheaper than paying monthly, but try doing it for a while before purchasing 12 months’ worth. If you’re like me, a month will be more than enough.
- When making deposits with bookies online only use debit cards and/or PayPal. Deposits are processed as cash transactions on credit cards. If you pay off your credit card bill monthly via a direct debit, you’ll still be charged 19% (or whatever’s the going rate) compound interest from the date of the transaction up until when the direct debit comes out. Even if you’re depositing £50, it’s still a £50 you don’t need to borrow at 19%.
- If you’re betting on horses more than a few hours before the race, underlay your bets a little. Rule 4 is a bitch, and exchanges calculate deductions differently from how bookies do it. You can end up losing money because of it.
- If you see yourself sticking with it, don’t arbitrage too much. You can find various theories and “information from reliable sources” on matched betting forums about what kind of arbitrage gets you put on bookies’ naughty lists and your accounts shut. I’m not sure if any of them have any merit. I’ve seen Big Data at work. It’s a fucking massive algorithm with a zillion variables supervised by a team of nerds, and (my impression at least) no single person in that team can coherently explain how that chimera of a thing fits together. If the computer says no, baby, then the computer says no.
- On the subject of naughty lists, be aware of affiliate sites. ApolloBet and BoyleSports, Stan James and Unibet, 888sport and LeoVegas, Totesport and Betfred… and many more. Often these are merely different bookmaker brands that trade under a single gambling license. Some, e.g. ApolloBet and BoyleSports, share (at least some) software and databases. In my experience, if you open accounts with both in short succession, that will get you shut down – instantly – with at least one of them, and possibly both.
- Those of you who have read this blog before will know that I don’t believe in self-actualisation through work. I have yammered about this before and I intend to continue.
- Putting a few quid on a race card at a corporate horse racing event doesn’t count. That’s about complying with convention, anything other than that would be perceived as strange by colleagues and clients. Ditto casinos, which allow you to peruse their 24-hour alcohol license so long as you’re willing to drop a few chips on a roulette table every now and then.
- I kept a spreadsheet. Obviously.
A special note on copyright:
Most of the visual material used in this post has been stolen from The Gul’s Itch Tumblr. STDS9 pictures + Futurama quotes = Nerdy bliss.