20th August 2001 - issue 6

There are a variety of techniques that you can use to bet profitably on these sites. Most of the following techniques have been referred to in previous newsletters or the original reports, however I feel it is worth summarising them at this point. These techniques if followed in a disciplined manner should result in profits. The technique you choose will vary depending on the how much risk you are prepared to take in the short term, balanced with how quickly you want your profits to start building up. Different techniques are also appropriate for different sports and different types of bets.

1. Research

Research has always been a tool that successful gamblers have used to their benefit. The problem that gamblers had to overcome in the past was that their research had to be good enough to overcome the bookie's overround and the tax. The bookie free sites have replaced the bookie's overround with very modest commission rates. They have also given us the opportunity to bet against other ordinary people rather than professional bookmakers. In addition an enormous number of statistic sites have put a wide variety of statistics at our disposal which was previously unavailable. This has created a level playing field where turning research into profits has become a realistic proposition. You may be able to use your research to identify bets where the market has under or over priced the outcome, however I prefer to use my research to offer bets myself at the odds I want. A good proportion of these bets will not be matched but at least those that are matched give me a significant statistical advantage. In order to maximise the number of bets that are matched at the right odds you need to understand what offers perceived value to your potential opponents. This subject is covered in the review of Play121 in Issue 4. One strategy you may wish to pursue is to focus all your research efforts on one particular team, or player so that you become an expert. This will give you the best chance of having superior information to your opponents. This strategy will be covered in detail in Issue 7.
Risks: Unlike some of the techniques outlined, this is a medium to long term strategy. You are still betting on an event with an unknown outcome and anything could happen in the short term. If your research is good , your profits are likely to be good, but they may take some time to come through. For this reason you must always stick to your maximum stake, to ensure that your bank does not run out before your advantage has a chance to come through. You also need to be very careful with translating your statistical findings into odds not to make a careless mistake. If you offer one bet in a hundred which offers overly generous odds to your opponents, you can be quite sure that is the one which will be accepted, and it may wipe out a lot of good work. Finally I must stress from personal experience, that, however good your research is, consider the possibility that your opponent's research is better and do not bet more than your limit, however attractive the bet may appear.

2. Laying the field

On the vast majority of events the overround favours those laying rather than backing. This is simply a case of demand and supply, with more people wanting to back than lay. Any member who adopts the role of the bookie is therefore likely to come out on top in the long run. By combining the sites you should be able to lay as many choices as possible at the lowest possible odds.
Risks: As some bets will be accepted and some will not, you will be exposed to (possibly substantial) losses if the wrong selection wins. It is for you to ensure that the potential losses are within your acceptable range. If they are not, you can reduce or eliminate your risk by backing the selection to which you are exposed. This will of course reduce your profits, and if the market has closed in on the selection you need to back, you may have to accept a guaranteed but manageable loss, rather than expose yourself to potentially damaging losses. (Post publication note: experience of myself and others has shown that the spreads and overrounds on most events are no longer bigger enough to ensure a profit. This combined with the high level of knowledge of people using these exchanges means that you should not use this technique.)

3. Offer worse odds than the bookies

This is a technique on which I focussed heavily in the original report. By offering odds below those set by the bookies you should be getting a significant statistical advantage over your opponent if the bet is accepted. The obvious caveat is that the majority of bets you offer are unlikely to be matched because superior value is available elsewhere, and there is a good chance that another member will top your odds. Therefore, you will be tying up a large amount of your account in bets which will not be accepted, and it is for this reason I tend not to use this technique. If you want to give it a try, you need to identify bets which are only offered by a limited number of bookies, which means that your opponent is less likely to identify the relatively poor value you are offering. I had quite a lot of success in the early days with half time bets, although it is more difficult now.
Risks: Firstly, the bookie has to balance his books and the odds on an event can often reflect market forces more than probability. For example England were odds on to beat Holland in last weeks soccer international friendly. This must have been based on an over optimistic nation, expecting Sven the Saviour to maintain his unlikely run of form, rather than any realistic statistical analysis. To blindly follow the bookies' odds, especially on bets where sentiment plays a part could be dangerous. Secondly, even with a statistical advantage on the event in question, there is still every chance that you will lose the bet. Whilst in the long term if you manage to match a large number of these bets your profits should mount up, in the short term you could easily find yourself in a negative situation. If you do match a lay bet below the odds offered by a bookie this of course gives you an arbitrage opportunity where you can place the same bet with the bookie and guarantee yourself a profit, removing any risk .  (Post publication note:  use this technique with great caution.  Markets are more fluid than ever, and opening bookies' prices are not a reliable indicator of where the odds will end up.  There is every chance of your bet getting swallowed up by moving prices leaving you stranded.) 

4. Working the margins of the spread

This is one of the best ways to make steady profits with minimal risk. On any given event there will be a spread between the odds at which you can back or lay an outcome. If you can lay an outcome at a certain price, and then subsequently back it at a better price you can get a risk free gamble.
eg. If you manage to lay Hakkinen at £20 at 4-1 then back him £20 at 5-1 you will make £20 profit if he wins, and you will break even if he loses.
To achieve this you need to find an event and a selection where there is a reasonable spread between the odds at which you can back and lay the outcome, but one which is busy enough for your bets to stand a chance of being accepted. Essentially you are exploiting the imperfections in the market. If it is a perfect market there will be no gap between the layer's and backer's odds, therefore you will not be able to use this technique. A good example of this is the 2001/2 Premiership title where there is a lot of focus on Manchester United, with the effect that the odds are currently 1.98 to back and 2.00 to lay, giving no scope to work the margins. However on some of the less fancied teams there is quite a spread. I have successfully backed Middlesbrough at 800-1 and then layed them at 300-1, giving me a free 500-1 bet. This can be a very effective technique if betting in running, especially in an event with lots of twists and turns.
Risks: You have to start somewhere, and one bet will always be accepted before the other. This will expose you to potential losses if the other side of the bet is not accepted. If you are comfortable that your odds give you a statistical advantage and the potential loss is within acceptable levels, then you may choose to run with it. Alternatively you can reduce or eliminate your risk by "reversing out" of your bet, ie betting the opposite to your original bet. This could however mean accepting a loss if the market has moved against you. To manage your risk you need to ensure that you know the market you are betting on very well, so that the bets you place are the right side of the spread and you stand the best chance of reversing out of the bet in a profitable situation.

5. Betting arbitrage

This is a similar technique to working the margins in that you are exploiting imperfections in the market, except that you are seeking to exploit differences in odds between the different sites. Whilst many bookie free bettors are members of more than one site the variation in odds between the sites suggests that many are exclusive to particular sites. This results in independent markets which sometimes make it possible to place a bet on one site and then immediately lay the bet at lower odds guaranteeing yourself a profit. (See the horse racing feature in issue 5) You will not find such opportunities in every event, but they certainly do exist, and for anyone who is prepared to spend enough time on a big enough variety of events such opportunities will definitely arise.
This is the least risky of all the techniques, although you may have to spend quite some time finding such opportunities. Generally speaking the profits, whilst assured, will not be massive. If for example the best odds to lay a runner on Betfair is 4.3, and you can back the same runner on Flutter at 7-2 (4.5) you will be getting a free bet worth 0.2 of your stake. If the maximum bet on offer is only £10, this will give you a potential profit of £2. You do however have to take into consideration the commission payable which can be disproportionate to the winnings. In the above example if the selection won, your profits on Flutter would be £35 on which you would pay 2.5%, a total of 88p, which is nearly half your profits of £2. If your selection failed to win, you would pay 5% on your profits of £10 on Betfair bringing you a loss of 50p. I prefer to use this technique as a nice bonus when the opportunity arises but it will never form a cornerstone of my strategy.
Risks: There will always be a time delay between you accepting the two bets, and it is possible that someone will beat you to one of the bets. This is especially likely when betting in running. To counter this threat always accept the bet first which appears to offer the best value. If there are bigger bets available than you could afford to lose, bet within your limit, then when you are satisfied that you have successfully laid it off you can go back for more.

(Post publication note:  anyone serious about betting arbitrage will need to make use of the mainstream bookies as well as betting exchanges.)

6. A combination of the above

The effectiveness of these techniques varies from sport to sport and event to event, and with experience it will become clear to you which to use and when. Generally speaking the most successful bookie free bettors will use a combination of these techniques to maximise their returns. By successfully mixing up the techniques you may find successfully cover all possible options.
Risk: This is far more difficult than sticking to one simple technique, as the different permutations can get extremely involved and complicated. Unless you are able to process this information in a calm, logical and numerate manner you could find yourself over exposed to a certain outcome. I find the best way to deal with this is to create a spreadsheet detailing all my bets which calculates my potential profits and losses in all possible scenarios. If you are just starting then I recommend you tread very carefully with this technique.