April 2, 2019
Making a profit from matched betting relies a lot on the odds offered by both the bookmakers and betting exchanges. The closer the bookmakers back odds are to the lay odds on the exchange, the less qualifying loss we incur and the more profit we can extract from free bets.
Occasionally, you’ll come across markets where the bookmakers’ odds are actually greater than they exchanges lay odds. When this happens, it is called an ‘arb’. Arbitrage betting is generally not recommended when matched betting as it can increase the chances of having your bookmaker accounts restricted. However, many use their less valuable accounts to profit from arbs as they can return a good profit with minimal effort and don’t require any free bets or other promotions. However, if you do choose to do arbitrage betting, it’s important to understand when there are valid opportunities and when there are false ones.
Arbing opportunities happen frequently throughout every day. If you take a look at an odds matcher, it’s likely that there will be multiple instances where the bookmakers back odds are greater than the lay odds for the same bet on the exchanges. This generally happens when the bookmakers are too slow to update their odds based on the exchange odds. However, it can also be due to the bookmaker posting incorrect odds, also know as ‘palpable errors’ or ‘palps’.
What are palpable errors?
Palpable errors are when the bookmaker has made a mistake when posting their odds. Usually, the errors are obvious but if you’re not aware of palpable errors, they can seem like an easy way to make a profit.
The image above shows an obvious error from a bookmaker. Where other bookmakers are offering odds of around 1.5, one bookmaker is offering 5.0 for the same bet. It’s extremely unlikely that this is a valid arbing opportunity and that the bookmaker has made an error when posting their odds for that market.
What happens to your bets if the odds are incorrect?
Unfortunately, bookmakers have a clause in their terms which entitles them to void all bets if odds are posted incorrectly due to human error. Some bookmakers may choose to settle bets at the correct odds which seems like the fairer option of the two but this can still be disastrous if you have taken the higher odds for matched betting purposes.
Going off the example in the image above, let’s say that you took the higher odds of 5.0 and placed £100 on it with the bookmaker and layed your bet on the exchange.
As you can see, if this was a genuine arbing opportunity, we could make £227 profit by simply backing and laying the bet.
Now let’s take a look at the possible outcomes should the bookmaker void or settle the bet at the correct odds of 1.5 should it win.
Bet wins & bookmaker voids bet – You’ll receive your £100 stake back but lose £172.42 on the exchange
Bet wins & bookmaker settles bet at the correct odds – You’ll lose £172.42 on the exchange and make £50 profit with the bookmaker leaving you £122.42 down.
As you can see, should your bet win with the bookmaker, there is no positive outcome and you could lose a lot of money.
How to spot palpable errors
Palpable errors are less common with the bigger bookmakers as they will generally have more traders who are less likely to make mistakes. However, any bookmaker can make mistakes and so it’s good practice to simply avoid any bets which seem too good to be true. There will always be differences in price between bookmakers but if one is offering odds a lot higher than all the others, it’s likely to be an error and something to be avoided.
What to do if a bookmaker doesn’t honour your bet
As mentioned above, bookmakers will likely include a section for palpable errors in their terms and it’s unlikely that you will win your case if you try to contest their decision to void your bet or settle it at lower odds. Most people who have tried this have failed but there have been cases where the bookmaker has settled at the given odds as a ‘goodwill gesture’.
If you believe that the odds you were given were not incorrect, you can contact IBAS (Independent Betting Adjudication Service) who will look into the situation and determine whether the bookmaker was in the wrong. You can contact IBAS via their website: https://www.ibas-uk.com/