Matched betting: ‘bonus abuse’ costing industry £20m every month
Julian Rogers examines the rise of matched betting advice sites and what impact the activity is having on the online betting industry.
“Earn a tax-free and risk-free second income of up to £1,500 a month”. With head-turning messages like these, it is perhaps no surprise more and more people are being seduced by the concept of matched betting.
For those unfamiliar with the idea, matched betting is a technique where people take up free bookmaker signup offers and other bonuses to back one outcome of a sporting event, then place a lay bet at a betting exchange such as Betfair. Because the back bet was essentially free, they profit whatever the outcome.
For those willing to put in a bit of legwork, there are genuine and consistent profits to be bagged. Of course, matched betting is nothing new – far from it. Yet Google searches for the term ‘matched betting’ have soared in recent years, as the graph below shows.
The rise of “matched betting” Google search queries since 2004
However, the practice has become noticeably more organised of late as a slew of slick-looking sites armed with odds-matching software, calculators, tutorials and forums have burst onto the scene.
An odds-matching process that was once plotted using spreadsheets and by trawling the internet for matched betting opportunities is now automated, making it a considerably simpler and quicker process.
Profit Accumulator, which charges paying subscribers £22.99 a month or £150 a year, only launched in 2014 but has quickly mushroomed into the space’s recognised leader, with over 20,000 monthly members. Even by conservative estimates, the site is raking in seven figures annually just from subscriptions.
According to web traffic statistics specialists SimilarWeb, Profit Accumulator attracts around one million visitors a month, with users hanging around for an average of 11 minutes and clicking on 19 pages.
As well as an accomplished video extolling the virtues of matched betting, together with member case studies, rival subscription-based site OddsMonkey includes caricatures of the 18-strong team, mimicking the vibe of a tech start-up.
Moreover, though, a headcount of this magnitude – if it’s true – underlines the money to be made from this niche. It’s no cottage industry.
Even so, Michael Rasmussen, head of acquisition at Panbet (Marathonbet Group), describes matched betting today as organised bonus abuse. “The whole concept of matched betting is that there is zero risk and you just extract value from offers.
“Translated, it is organised bonus abuse. As soon as you have got a new company out there that opens up a bonus they have an army of matched bettors killing them on their bonusing.”
Despite this criticism, some industry veterans have diverted their attention towards matched betting. For instance, David Archer founded sports betting affiliate network Biggerbet in 2009 but he recently launched MatchedBets.com from his base in Marbella, Spain.
Meanwhile, Pierluigi Buccioli ran Bookmakers Review for a decade before later establishing MatchedBetting.com. Buccioli, who habitually buys and sells domains, says he’s received multiple five-figure offers for his Matchedbetting.com url over the past few years as suitors realise its potential value.
“In early 2015 I started looking for a new project – I received a six-figure offer for the domain and decided right there and then to build it into a website.”
A different type of customer
Curiously, matched betting sites seem to cast their nets far wider than the existing pool of sports bettors, deliberately targeting students and those looking to earn a few extra quid.
Not only has matched betting appeared in articles by The Guardian, The Huffington Post and The Telegraph, this activity regularly features on sites such as Save the Student, The Student Guide, Money Saving Expert and Mumsnet.
In these sites’ comments sections and forums you will find gambling neophytes trying to wrap their heads around the somewhat esoteric methods of exploiting bookmaker offers and how to lay a bet. They don’t tend to be your typical gambler.
“I know our general punter but I know you will see the stay-at-home mum doing matched betting in between the school runs. It’s a different segment,” says Rasmussen. “It’s a segment that betting companies are never going to turn into profit.”
However, Buccioli says: “Subscription sites like Profit Accumulator have done an incredible job at making matched betting popular with non-gambler demographics, and in particular with those looking to make money online or working from home, but in my experience, the typical matched bettor is someone who already has an interest in sports betting and starts looking for ways to profit from his hobby.”
One of the most popular free-to-access matched betting services (29,000 Twitter followers) is Matched Betting Blog, owned by Matthew Kirman. A profits target on the homepage was set at £16,000 for 2016. Yet by the time New Year’s Eve revellers locked arms to sing Auld Lang Syne, Kirman had eclipsed £18,000.
Although perhaps not a life-changing sum to most, risk-free profits like this are certainly not to be sniffed at, especially if you are a cash-strapped undergraduate who is prepared to put in the effort.
“Since the money is a relative small gain per offer it is not really worth it if you already have a decent salary, but if you are student or stay-at-home mum, this money can make a difference,” says one operator’s head of sportsbook speaking to iGaming Business on an anonymous basis.
However, our source is quick to highlight how from the industry’s perspective, newer operators are the most exposed to matched bettors. “New operators are the ones that are being hit the hardest since we cannot afford the abuse to the same extent as the more mature operators, and this puts us at a competitive disadvantage.”
‘We’re not talking small numbers’
The average European sportsbook shells out €180 to acquire each new customer these days, according to betting tech supplier Bettorlogic, with freebies and bonuses part of this outlay.
Traditionally a low-margin operator, Marathonbet decided to provide its first new customer offer in August 2015. Bonus abusers and matched bettors were quick to pounce, says Rasmussen, adding that the promotion cost his firm seven figures.
He estimates similar amounts are lost to matched bettors across the industry. “Let’s say an organised matched bettor can make £1,000 a month and you have one site with 20,000 subscribers, that’s £20 million extracted from the industry from pure speculation and trading offers on a monthly basis.
“It’s difficult to estimate how many are super-organised and manage to get away with it [but] I don’t think we are talking small numbers across the industry.” He adds: “A lot [of operators] probably don’t realise how much their offers are abused amongst matched bettors.”
Many matched betting sites offer advice on how to fly under the radar and try to avoid being ‘gubbed’ (no longer eligible for free bets and offers). This includes placing the occasional ‘mug’ bet, playing some casino, or, if they are sharp, locking in the profits on the exchanges. That way, the bookmaker just sees a losing account.
Buccioli, unsurprisingly maybe, refutes the suggestion that this is all organised bonus abuse. “There is no doubt that when it first became popular 10 years ago,” he says, “the matched betting technique was presented, discussed and refined by groups of players and forums that had a history of bonus abuse, but these days I don’t know of any major matched betting site that encourages or caters to bonus abusers.
“It’s also important to mention that matched betting, if done right, doesn’t cost anything to the bookmaker as the matched bettor wants to move his profits and cash out on a betting exchange, where it will be either a market maker or another punter to pay for them.”
As it stands, matched betting continues to be a lucrative activity, especially so for those established sites with loyal paying subscribers, not to mention the facilitators of the lay bets – exchanges like Betfair, Betdaq and Matchbook.
In fact, it’s reaching the stage where consolidation in the matched betting arena is a distinct possibility, suggests Buccioli. “I see more matched betting sites launching in 2017 and I most definitely expect some M&A activity within the matched betting niche, and possibly a media group taking over one of the more established subscription sites.”
For our anonymous source, the situation is simple: “I think we will see more and more of these sites until the free money stops.”