The maths behind matched betting

This guide tells you everything you need to know about how matched betting works and how to get started.

Likewise, if you’ve just heard about this risk-free way to earn guaranteed profit and you want to learn everything you can about how matched betting works, you’re also in the right place!

Here’s your complete guide to earning a second income.

How matched betting works

Matched betting explained

Matched betting exploits free bets from betting sites to make a profit. The technique is completely legal and low risk – as long as you do it right. In basic terms, it involves betting on two opposing outcomes (e.g. a football team winning and losing) using free bets.

There are quite a few terms and formulas to get your head around, so without further ado, let’s get started.

Key terms

Back bet

A back bet involves putting your money down FOR a certain outcome. For example: “I bet Tottenham will win against Arsenal” is a back bet. Ordinarily, if Spurs lose or draw, then you lose your stake. This is a standard bet that you can place with any bookmaker you choose.

Lay bet

A lay bet involves betting against a particular outcome. Following on from the previous example, this could be: “I bet Spurs will lose against Arsenal”. In this case, a loss or a draw for Spurs means you win the bet, but if they win then you lose. It is only possible to place a lay bet at a betting exchange, like Smarkets or Betfair.

In matched betting, you use the lay bet to minimise any potential loss by betting against yourself at the same – or very close – odds.


When you place a losing bet with a traditional bookmaker, you just lose the stake. When you make a lay bet with a betting exchange, you could lose an amount equal to the odds multiplied by your stake. In matched betting, this will be cancelled out by the opposing back bet you make with a bookmaker.

Qualifying bet

A qualifying bet is the first ‘real-money’ bet that you place to unlock your free ‘welcome’ bet.

Free bet – stake NOT returned (SNR)

This is a type of free bet that does NOT return your stake in the event of a win.

Free bet – stake returned (SR)

This is a free bet that, in the event of a win, IS returned with your stake.

Betting exchange

Betting exchanges differ from traditional bookmakers, such as Ladbrokes or William Hill, in that they don’t mind whether you win or lose.

It’s in a bookmaker’s interests for you to lose your bet because that’s how they make their money. But by contrast, in the case of a betting exchange you don’t bet against a company, but instead against different exchange members who are willing to offer odds on an event. Betting exchanges make their money from commission on bets or trades.

Matched betting formulas

To be successful at matched betting, you either need to know your mathematical formulas, or use software that makes those calculations for you. If you want to calculate your odds, profit and optimum stake yourself, here are the formulas you need:

1 Qualifying bet and welcome bet formulas

a) Profit if back bet wins:
Profit = back stake * (back bet odds – 1) – lay stake * (lay bet odds – 1)

b) Profit if lay bet wins:
Profit = lay stake * (1 – commission) - back stake

c) To work out the ideal stake for even profit, no matter what the result:
Lay stake = back odds * back stake / (lay odds – commission)

d) Final profit for the qualifying bet and welcome bet stage:
Final profit = lay stake * (1 – commission) - back stake

2 Free bet – stake NOT returned (SNR) formulas

a) Profit if the free bet SNR wins:
Profit = (back odds – 1) * free bet size – (lay odds – 1) * lay stake

b) Profit if the lay bet wins:
Profit = lay stake * (1 – commission)

c) To work out the ideal lay stake for the same profit, no matter what the result:
Lay stake for an even profit = (back odds – 1) / (lay odds – commission) * free bet size

d) Final profit for the free bet (SNR) stage:
Final profit = lay stake * (1 – commission)

3 Free bet – stake returned (SR) formulas

a) Profit if free bet wins:
Profit = free bet value * back odds – lay stake * (lay odds – 1)

b) Profit if lay bet wins:
Profit = (1 – commission) * lay stake

c) To work out the ideal lay stake for even profit, no matter what the result:
Lay stake for an even profit = (back odds * free bet value) / (lay odds – commission)

d) Final profit for the free bet (SR) stage:
Final profit = (1 – commission) * lay stake

Step-by-step guide to matched betting

Once you know how to do the maths, matched betting becomes easy. Here are the steps you need to get started:

  1. Find a bookmaker offering a free bet to new members.
  2. Open an account with the bookmaker. Read their terms and conditions to find out the type of free bet on offer (e.g. stake returned, stake not returned, type of sport). If the terms aren’t clear to you, get in touch with customer service for more information.
    You’ll be asked to make a deposit (this will vary from one bookmaker to the next).
  3. Open an account with a betting exchange account, such as Betfair or Smarkets, which also offers a free bet.
  4. Find and place your qualifying bets. Ideally, you want to find a back bet and a lay bet with the same – or similar – odds.
    For example, if Coral offers odds of 4.00 FOR Everton to draw with West Brom, you need to find a betting exchange that offers the closest odds for a lay bet AGAINST the draw. This prevents you from losing any actual money while also unlocking the free bets.
  5. Repeat step 4 using your free welcome bets from the bookmaker and betting exchange. Because both bets are free, you don’t incur any losses and make only profit.

How OddsMonkey can help make the process easier

OddsMonkey is a matched betting service that trawls online bookmakers and betting exchanges to find matching odds for your back and lay bets. So you don’t have to waste time doing it yourself.

Whether you’re an expert or have no idea how matched betting works, OddsMonkey has everything you need to make a profit from betting without gambling.

So while this article includes all the formulas you need to work everything out without any outside help, OddsMonkey ensures you don’t have to worry about making complex calculations. The OddsMonkey Community is a place you can go to ask for advice from other members and swap your success stories.