If you haven’t already read my matched betting guide, I would recommend you do so before reading any of my strategy pages. It’s important that you understand how we place certain bets before learning why we place them.
So, your account has been credited with a free bet and you’re wondering how best to extract your profit. The majority of free bets are ‘stake not returned’, which means that we only get the winnings back and not the free bet itself. So, for example, if we had a winning £10.00 free bet at odds of 3.00 (2/1), we would win £20.00 cash and the £10.00 free bet stake would not be returned. We are therefore required to place our free bets at higher odds, to account for the fact that free bet stakes are rarely returned.
By using straightforward matched betting, we are able to extract approximately 80% of any free bet as cash profit. In order to demonstrate how this is achieved, we need a free bet, so following on from my Qualifying Bet Strategy page, I’ll show you how best to extract your profit from the Ladbrokes £50.00 free bet.
It’s important that we always read the terms of an offer before placing our free bets as there may be restrictions on how we can use them. For example, we may only be able to use a free bet on a certain market or at certain odds.
I like to place my exchange lay bets with Smarkets as the site is really easy to use and they only charge 2% commission in comparison to the 5% charged by other betting exchanges.
I’ve opted to place my free bet on a match between Chelsea and Swansea City, the odds for which are as follows…
As you can see, we can place our free bet on a Chelsea win, a draw or a Swansea City win. In order to determine which selection gives us the biggest profit, we need to input the figures into the matched betting calculator. The results are as follows…
|Outcome||Back Odds||Lay Odds||Bookie Profit||Exchange Liability||Free Bet Profit|
As you can see, if we place our free bet on a Swansea City win (the highest odds), we will make the biggest profit of £40.16. If we bet on the draw, we’ll make £34.44 profit and if we bet on a Chelsea win, we’ll make a measly £13.90 profit. Obviously, we need back and lay odds that are fairly tight, but generally, the higher the odds, the more profit we will extract from our free bets.
It’s also important to notice the exchange liability figures. Our exchange liability is the amount we stand to lose from our Smarkets account if our lay bet loses. As you can see, the higher the odds, the more money we need in our Smarkets account to lay the bet. If, for example, we only have £150.00 in our Smarkets account, we would just have to place our free bet on the draw instead and take a slightly smaller profit. For more information about lay betting, please see my betting exchange guide.
We know we need to place our £50.00 free bet on Swansea City at Ladbrokes as this is the selection that gives us the biggest profit. All we need to do now is work out our lay stake for the Smarkets bet.
As you can see, by selecting ‘Free Bet’ and entering the relevant figures into the matched betting calculator, it tells us that our lay stake needs to be £40.98.
So all we need to do is click on the 11.00 lay button and enter our stake of £40.98. It tells us that our liability on this bet is £409.85 and it’s good practice to check this figure against the expected liability on the matched betting calculator. As you can see, they are both the same but for a penny (due to rounding), so we know we have entered the correct lay stake. We will need to deposit funds into our Smarkets account to cover our £409.85 liability as this is the amount we stand to lose from Smarkets if Swansea City win. Don’t worry though, our potential Ladbrokes winnings of £450.00 will more than cover it.
Let’s have a look at our resulting profit/loss for the two outcomes…
|Swansea City win||+£450.00 – £409.85 = £40.15 profit|
|Swansea City don't win||-£0.00 + £40.16 (£40.98 minus 5% commission) = £40.16 profit|
So regardless of whether Swansea City win, lose or draw we will make a guaranteed minimum profit of £40.15 from our free bet.
Always place your free bets at high odds. You’ll need more money in your betting exchange account but it’ll give you a much larger overall profit!!!