Matched betting (also known as back bet matching, lay bet matching, or double betting) is a betting technique employed by individuals to profit from free bets and incentives offered by bookmakers. Its proponents considered it risk-free in theory-based probability.[1]
Concept
editThe concept of matched betting requires an account with two or more bookmakers or betting exchanges where at least one offers the user a free bet. When the free bet is placed the other bookmakers or betting exchanges are used to hedge all the possible outcomes so that no matter what happens the value of the free bet is retained. At its simplest, a matched bet involves placing a back bet using the free bet at a bookmaker while placing the opposing lay bet at a betting exchange. More advanced versions involve placing the bets on multiple bookmakers (dutching) to avoid the commission charged for using an exchange. Generally, bookmakers incorporate terms by which bettors must first place a bet using their own money in order to qualify for the free bet. For this, a bet is placed on particular results occurring with the bookmaker and a second bet placed on the same result not occurring at the betting exchange. The latter is required to offset any loss in the event that the result does not occur; for instance, if a team loses. Once the free bet has been qualified, the same process is followed with the exception that a free bet is being used. No matter which result occurs, there will always be a guaranteed profit because the bet was made free of charge. Online betting outlets, betting exchanges, have become popular in recent years for they allow betters to bet without official odds-makers. In essence, the person placing the lay bet acts as a bookmaker.[2]
Approaches
editThere are several common strategies for matched betting including assisted and manual betting. Assisted matched betting refers to websites or software packages which provide comparison tables of markets for individuals to bet on. These are commonly known as 'auto-matchers'.[3][4]
Industry reactions
editMatched betting is legal[5] and a spokesperson for William Hill has indicated that the betting industry does not have a problem with this use of free bets.[6]
Matched betting services
editThe growth of matched betting has led to the formation of matched betting services - usually, subscription-based businesses established to make the process easier with step-by-step instructions and bespoke software.[4]
Taxation
editIn the UK gambling by individuals, including matched betting, is not taxable[7] as gamblers usually lose; if it were taxable there would have to be tax relief for losses. UK HM Revenue & Customs use criteria called "badges of trade" to determine whether an activity is taxable trade.[8]
Matched betting, along with all other betting, is tax-free in Italy.[9]
See also
editReferences
edit- ^ Burek, Owen (20 July 2013). "Is Matched Betting the Answer to Student Prayers?". Huffington Post. Archived from the original on 14 July 2014.
- ^ Thrust, Richard (2010). Free Sports Bets. ISBN 9781445725710.
- ^ Anon. (5 June 2010). "Free World Cup bets offer chance to beat the bookies". The Guardian. Archived from the original on 9 September 2017. Retrieved 16 June 2017.
- ^ a b Shearer, Jason (24 July 2010). "Free bets mean you can clean up as bookies meet their match". The Guardian. Archived from the original on 21 December 2016. Retrieved 15 December 2016.
- ^ "How does matched betting work, and what are the legal constraints?". Retrieved 2023-12-18.
- ^ Murray West, Rosie (6 December 2010). "Is this a bet you can't lose?". Daily Telegraph. Archived from the original on 10 December 2010.
- ^ "Meaning of trade: Exceptions & alternatives: Betting and gambling - introduction". HM Revenue & Customs. 7 March 2022 [Originally published 22 November 2013, all updates available]. BIM22015. Archived from the original on 17 October 2013.
Betting and gambling, as such, do not constitute trading
- ^ "Badges of Trade". Alterledger. 22 May 2015.
- ^ "Gazzetta Ufficiale art. 30 DPR 600/1973". Gazzetta Ufficiale.