Matched betting - who's done it and who's good at it? (No Referrals)

danlightbulb · 13 Mar 2019 at 23:49

Rotty said:
correct the best +ev on these offers it to "gamble" with them, obv higher variance but on average you do better

up to you which matters more

Whilst this is mathematically true it would be a rather silly tactic because the variance is so large. Youd risk never getting going this way if you were starting, like most do, with limited funding.

By the time I got gubbed everywhere so had to stop, i was over £5k in profit at the exchange. (£5k more out than i put in across the life of my activity). There are quite a few one hit wonder bookie offers that won to the exchange, although all the mainstream ones were net profit from the bookie overall. I cant separate free bets from qualifiers in my records so its all bets though.

Id suggest to those starting out not to gamble your free bets if you need to build a decent bank up. Lay them off as per the guides, take the steady profit.

Rotty · 14 Mar 2019 at 03:10

I agree if funds are limited then its not the way to so

My only point is its statistically the highest profit (one average) and, for me, a bit of fun outweighs the downside of variance but this will not suit everyone

Royal Fleet · 14 Mar 2019 at 06:57

dowie said:
You're ignoring the free bets - the fact that an exchange is more efficient and has a lower over-round/vig is missing the point. Without the free bets then you've got two negative expected value bets.

So yes if there are no free bets and you just blindly bet at both a bookie and exchange then you'd lose money slower at an exchange. However the free bets occur at the bookies, that is the important part as that is the +EV part of this, you don't make money from the exchange you lose money at the exchange (in the long run).

Ah. I see we are debating at cross purposes here. I agree with your assertion that the free bets make the bookie has a higher pure EV than the exchange if you gamble. However the point the original poster (see post 4929) made was if I underlay the free bet I have obtained from the bookie do I still make money. To which I answered you can do but the higher longer term value with the free bet comes from continuing to match it completely against an exchange than to gamble with it. Gambling has a 7-9% margin of loss whereas the matching into the exchange should have less than that (assuming you can find 95% matches on high odds matches and pay no commission).

Of course if you assume you are a better judge of probability than the gambling industry then you are a genius/mug bettor (* delete as applicable) ;-)

dowie · 14 Mar 2019 at 07:06

@Royal Fleet

You’re still focused on the bookie’s vig, the vig is getting paid regardless of whether you lay correctly or don’t lay or indeed do something inbetween. It isn’t relevant to this and it is more than compensated for by the free bet.

The point is simply that laying is costing you money in return for reducing the variance you’ll see in the returns. If you don’t lay or only partially lay then you reduce that cost. So it is not correct to state that you’ll get more value from fully matching/laying.

The % vig that you’re paying at the bookies is getting paid regardless.

Royal Fleet · 14 Mar 2019 at 08:29

dowie said:
@Royal Fleet

The % vig that you’re paying at the bookies is getting paid regardless.

I still think we are talking at cross purposes. I am only talking about the free bet. The question is what to do with it. Do you back and lay for a guaranteed amount, or do you gamble with it? My point is that the loss (cost) in gambling is the bookie's vig (as you call it) whereas the loss in the Back and lay scenario is the QL. If you keep the QL below 7% you will profit more than gambling with it.

dowie · 14 Mar 2019 at 08:31

Royal Fleet said:
I still think we are talking at cross purposes. I am only talking about the free bet. The question is what to do with it. Do you back and lay for a guaranteed amount, or do you gamble with it? My point is that the loss (cost) in gambling is the bookie's vig (as you call it) whereas the loss in the Back and lay scenario is the QL. If you keep the QL below 7% you will profit more than gambling with it.

But you're paying the bookie's vig in either case no? i.e. you're placing what would otherwise be a -EV bet (if it weren't for the offer).

It doesn't matter if you're only talking about the free bet or talking about the qualifying bet and the free bet... the exchange represents a cost. If the exchange didn't represent a cost then you'd not need to bother with the bookies and the free bets in the first place.

Lets assume you're placing the same bets at a bookie

scenario A - you fully match all bets at the exchanges
scenario B - you only partially match (doesn't matter what this involves but it is somewhere in between A and C)
scenario C - you don't match at all

In all those scenarios you're still placing the same bets at the bookies and still derive your profits from the bookies via the free bets in the long run. It doesn't matter what the overground is at the bookie and at the exchange, whether it is 9% or 5% etc.. so long as you're more than covering it from the free bet offer. you're still placing bets at the bookie in all those scenarios. The only difference is the exchange.

Now laying bets at the exchange is -ev, it costs money. It acts like a form of insurance and lets you lock in your profits for a price. If you don't lay then you remove that cost but your profits can certainly bounce around... in the long run you've removed that cost and the overall expected value of your betting is higher.

Royal Fleet · 14 Mar 2019 at 08:41

dowie said:
But you're paying the bookies vig in either case no?

No. The vig comes from the probability adding up to more than 1. If you back all outcomes of an event (e,g win, lose, draw) to the proportion the bookie's odds translate into probabilities then you will end up losing money. That is the margin.

In the case of back and lay the probability is 1 by definition. (i.e. It will happen, it won't happen). What the actual odds are becomes irrelevant (other than your back and lay need to have as close as possible! - this is the QL)

dowie · 14 Mar 2019 at 08:47

Royal Fleet said:
No. The vig comes from the probability adding up to more than 1. If you back all outcomes of an event (e,g win, lose, draw) to the proportion the bookie's odds translate into probabilities then you will end up losing money. That is the margin.

In the case of back and lay the probability is 1 by definition. (i.e. It will happen, it won't happen). What the actual odds are becomes irrelevant (other than your back and lay need to have as close as possible! - this is the QL)

Sorry - see my edit above. I'm aware of what the vig is. What I mean is that you're still placing the same -EV bets at the bookie whether you lay or not... so referring to the bookie's vig or over round when discussing laying or not laying or partially laying is irrelevant... same bets, same EV for those bets...

The only difference is the activity at the exchange, which is inherently -EV but has a benefit in reducing the variance of your pay outs.

Royal Fleet · 14 Mar 2019 at 09:00

Let me explain my point by means of a real life example. Arsenal are playing Rennes tonight. One of these teams will qualify.

Current Paddy Power odds to qualify are
Arsenal 1.75
Rennes 1.95

using the formula - probability of outcome in percentage terms = 1/odds x 100
Arsenal 57%
Rennes 51%
Total = 108%

Clearly that is incorrect as the probabilities add up to more than 100%. Therefore the margin in the bookie is 8%. If you bet and are successful at matching the probabilities to real life you will lose 8% over time.

In a matched bet scenario you are saying
Arsenal to qualify 1.75 - back bet
Arsenal not to qualify 1.8 (for example) - lay bet at the exchange
The sum of the outcome probabilities is 100%. One of these things will happen. In this case your QL is about 3% (would be nice!).

dowie · 14 Mar 2019 at 09:11

Like I said I’m aware of what the vig is.

I think I can see where your issue is here, the bit you’re missing is still what I’ve reiterated, namely that you’re placing the same bets at the bookies regardless of whether you lay at the exchange or not! So focusing on the vig at the bookies when comparing laying or not laying or some partial laying isn’t relevant.

Now unless your activity at the exchange is +ev, in which case you’ll not need to make use of the free bets in the first place... or perhaps you’re in the position where you’ve found a straight up arb etc.. (implying that one or both legs are mispriced) then it is generally going to be a cost.

Royal Fleet · 14 Mar 2019 at 09:22

dowie said:
I think I can see where your issue is here, the bit you’re missing is still what I’ve reiterated, namely that you’re placing the same bets at the bookies regardless of whether you lay at the exchange or not! So focusing on the vig at the bookies when comparing laying or not laying or some partial laying isn’t relevant.

Now unless your activity at the exchange is +ev, in which case you’ll not need to make use of the free bets in the first place... or perhaps you’re in the position where you’ve found a straight up arb etc.. then it is generally going to be a cost.

This is an interesting debate; I am enjoying this. However I still think you are wrong..

Let me summarise what I think is your assertion.

Once you have free bets to play with. You are better off just gambling them as the long term value from your winnings is greater than if you had negated every back bet with a lay bet. This is because of the cost of laying bets at the exchange.

My assertion is this. Assuming you bet often enough to reduce the variance on outcome (i.e. you win in accordance with the bookie's deemed probabilities) you will pay the vig. That is the -8% over time.

If you lay every bet you do not pay the vig. The vig comes from the probabilities adding up to more than 1. A lay and back bet by definition has a probability of 1.

With gambling the odds matter. With back and lay they don't. If someone if offering odds that the earth is flat of 2.0 then as long as you can get a lay bet with the same odds it is a wash.

Oxide™ · 14 Mar 2019 at 10:02

I literally have no idea what you guys are talking about on this page

dowie · 14 Mar 2019 at 10:13

Royal Fleet said:
This is an interesting debate; I am enjoying this. However I still think you are wrong..

No worries, lets talk it through.

firstly re: your summary - Yes, conditional on this being "in the long run" and assuming someone with liquidity and who is aware of the risks, someone on a shoe string budget perhaps isn't better off matching as the risk of ruin applies here too!

Someone like say Rotty above, who IIRC is a keen poker player so obviously understands the risks and is happy with the variance etc.. might well have a bit of fun simply taking advantage of the free offers.

I think the issue is you need to look at the bets separately, the bets at the bookies are unchanged whether you lay or not.

Anyway, lets try this:

------------------------------------

Say you make a series of matched bets without any free bets being present - do you agree that you'd lose money at both the bookies and the exchange over time? If not why not?

Now with the free bets present - do you agree that you'd make money from the bookies (thanks to the free bets) and lose money at the exchange over time? If not why not?

Now if you take the exchange away, where you'd otherwise be losing money, and were to place the same bets at the bookies, what would happen over time?

(Just a note - if you don't think you'd lose money at the exchange in the long run then you don't really need the free bets in the first place - you might as well just carry on making money from betfair!)

------------------------------------

Just a note on vig - in your previous example you're technically talking about the overround, the vig actually would be 8/108 = 7.4% I also used the terms interchangeably earlier I think which was sloppy of me too but so long as we're both referring to the source of the bookie's profits and the reason why the bets are generally -ev then meh

Royal Fleet · 14 Mar 2019 at 10:40

dowie said:
Say you make a series of matched bets without any free bets being present - do you agree that you'd lose money at both the bookies and the exchange over time? If not why not?

If you made a series of matched bets without any free bets you would lose money over time due to the qualifying loss on the bets. Whether that was a loss at the bookie or the exchange would be dependent on the outcome of the bets. The net result though is the loss comes from the qualifying loss. To be clear on terminology here. A matched bet is one where you back something to happen at the bookie and lay (i.e. back it not to happen) at the Exchange. By negating the chance element of a bet by covering both sides what actually occurs becomes irrelevant.

dowie said:
Now with the free bets present - do you agree that you'd make money from the bookies (thanks to the free bets) and lose money at the exchange over time? If not why not? -

I agree that the free bets is where the profit comes from. The money you make in the whole exercise is that the value realised from the free bets is greater than the QL on the matched bets placed to earn the free bets. My point of contention is how to realise the most consistent long term profit from the free bet. I argue you should continue to match these bets rather than purely gamble with them, due to the overround.

dowie said:
Now if you take the exchange away, where you'd otherwise be losing money, and were to place the same bets at the bookies, what would happen over time? -

On free bets if you gamble them rather than lay them your overall expected value is lower as the overround is greater than the QL.

dowie said:
(Just a note - if you don't think you'd lose money at the exchange in the long run then you don't really need the free bets in the first place - you might as well just carry on making money from betfair!)

Agree. Placing back bets with the bookie to get the free bet is where the value originates. I would always lay out my free bets as well though to maximise long term value. The original poster that started this debate was asking whether it would make sense to underlay the free bet. Aside from the underlay needed to negate that the stake is not returned with a free bet my assertion is that you should not if pure value is your goal.

dowie · 14 Mar 2019 at 10:56

Royal Fleet said:
If you made a series of matched bets without any free bets you would lose money over time due to the qualifying loss on the bets. Whether that was a loss at the bookie or the exchange would be dependent on the outcome of the bets.

Yes that could be true with a short run of bets...

Sorry I didn't qualify it with "in the long run" but with that qualifier do you agree that you'd lose money at both the exchange and the bookie - if not why not?

Or to flip it around - if you don't agree with that then you don't need any free bets and could just go and make money from betfair or various bookies!

If you add in the free bets then that is where the profits are derived from... you still lose money at the exchange, in the long run.

I agree that the free bets is where the profit comes from. The money you make in the whole exercise is that the value realised from the free bets is greater than the QL on the matched bets placed to earn the free bets. My point of contention is how to realise the most consistent long term profit from the free bet. I argue you should continue to match these bets rather than purely gamble with them, due to the overround.

Hang on if you're talking about consistent profit then of course you lay. The assertion is about getting the highest expected value.

On free bets if you gamble them rather than lay them your overall expected value is lower as the overround is greater than the QL.

Why?

edit - I think this is the issue - you're comparing the over round (from all the possible bets at the bookie, of which we're taking only one) to the "QL" for some reason? That doesn't make any sense, nothing has changed with regards to the bets at the bookies.

Lets break this down too.

Assuming you're placing the same series of bets at the bookies then your expected value for those bets is unchanged - if you disagree then explain why? What has changed with regards to the expected value for those specific bets at the bookies? They will have, overall, a positive expected value thanks to the free bets - this is where the money comes from.

Now your lay bets at the exchange have a negative expected value as I think we both agree (if not then why not?) - if you place a series of -ev bets what happens in the long run? You lose money over time, right?

If you don't lay at the exchange then in the long run your expected value, overall, is higher. Nothing has changed with regards to your bets at the bookies. All that has happened here is that you're exposing yourself to variance.

Royal Fleet · 14 Mar 2019 at 11:29

dowie said:
Assuming you're placing the same series of bets at the bookies then your expected value for those bets is unchanged - if you disagree then explain why? What has changed with regards to the expected value for those specific bets at the bookies? They will have, overall, a positive expected value thanks to the free bets - this is where the money comes from.

Now your lay bets at the exchange have a negative expected value as I think we both agree (if not then why not?) - if you place a series of -ev bets what happens in the long run? You lose money over time, right?

If you don't lay at the exchange then in the long run your expected value, overall, is higher. Nothing has changed with regards to your bets at the bookies. All that has happened here is that you're exposing yourself to variance.

This is the point of contention. With a long series of unmatched free bets your loss will be the overround. This is c8%.
With a long series of matched free bets the loss will be the QL 4%. By matching a bet you take out the overround and replace it with a QL. This is what I see as the flaw in your argument. You seem to be asserting that you still have the overround on a matched bet. You don't.

dowie · 14 Mar 2019 at 11:50

Royal Fleet said:
This is the point of contention. With a long series of unmatched free bets your loss will be the overround. This is c8%.
With a long series of matched free bets the loss will be the QL 4%. By matching a bet you take out the overround and replace it with a QL. This is what I see as the flaw in your argument. You seem to be asserting that you still have the overround on a matched bet. You don't.

Sorry but why do you think there is any change to the EV of the bets at the bookies? Nothing has changed there, that is your source of profit.

For example you gave an example of a bet at 1.75 on Arsenal

Betfair at the time of typing is/was showing 1.87 : 1.93

lets assume (for the sake of this example) that betfair is super efficient and the true odds are the mid price: 1.90

so if you're laying at 1.93 (lets ignore commission) and the true odds are actually 1.90 you're making an -ev bet right?

Also if you backing at 1.75 and the true odds are 1.90 then you're making an -ev bet again right?

It is only the presence of free bets that allows you to make a profit, which in the long run occurs at the bookies.

Those bets at the bookies are unchanged whether you lay or not - if you don't think they're unchanged then please explain why.

Minusorange · 14 Mar 2019 at 11:58

Is it better to hold off doing this until you can invest a larger sum of money vs trying to grind a balance with lower amounts ?

Royal Fleet · 14 Mar 2019 at 12:11

dowie said:
Those -ev bets at the bookies are unchanged whether you lay or not - if you don't think they're unchanged then please explain why.

Surely this comes down to how well you can match your bets.

You assume have two strategies. You gamble or you match. In both scenarios you get 10% of free bets for your back bets at the bookies.

Strategy 1 - You gamble and win in accordance with the probability and bookie's overround of 8%. Your stakes of 1000 bet at 10 (so 10000 gambled) would return you 9200 in winnings and 1000 in free bets.
Strategy 2 - You lay all your bets with a QL of 4%. You pay no commission on your lay bets*. Your 1000 bet at 10 would return 9600 in winnings and 1000 in free bets.

You then repeat the same with your free bets. Same margins would apply (the impact of stake not being returned would impact both equally)

*This is possible if you use PA in partnership with Smarkets for example.

Street · 14 Mar 2019 at 12:43

Minusorange said:
Is it better to hold off doing this until you can invest a larger sum of money vs trying to grind a balance with lower amounts ?

You can start fairly small. If you do all the intro offers, you can build up a few hundred fairly quickly and then you'll have more of a bank to work with. The only problem with starting small is having to wait for withdrawal from bookies to start the next offer.