It is rare that two words cause me more disdain than those of ‘matched betting’. Well maybe ‘bean counters’, ‘trading decisions’ and ‘bookmaking industry’. However, it is tough to measure the damage that I think ‘matched betting’ has caused. Matched betting’ is in essence a customer taking advantage of the free bets that bookmakers offer, usually when opening an account. The customer then hedges the free bet they have placed either on exchanges or with other bookmakers. They do this to ensure a profitable outcome regardless of what happens with the free bet they received. They are also able to take advantage of special concessions and offers that bookmakers may make at other times.
What has ended up happening is that this has become a little industry in its own right. With the lure of easy and risk free money the industry has attracted plenty of people who have zero interest in betting. They just want the free money. These people are adding absolutely nothing to the betting industry. In fact they are doing a great deal of harm. The money being taken out of the industry has to be paid for somehow, by others. As we all know that will inevitably be losing punters.
What has happened is that the bookmakers have decided that they need to refine their customer base further to make it more profitable and as a consequence restrictions of accounts have increased. As account restrictions increase, multi accounting increases. It becomes bit of a vicious cycle. The more multi accounting there is, the more KYC issues there are. It’s one of the main reasons bookmakers make the checks so onerous. To try and make life difficult for those multi accounting.
What you have is a mass of multi accounting purely for matched betting purposes. People opening accounts in other peoples names just to take advantage of the free bets offers. They are rarely used beyond that and any other offers that appear. You even have the smaller exchanges deliberately catering for the matched bettors. Creating odd markets. So they can lay off the free bets/boosted bets they have taken. Whilst it can result in value for other punters it is still a huge negative for the industry.
I have always said if I was starting out in the game that the free bet offers are a good and easy way to start to try and build a bankroll. You would then be using those accounts as a normal customer though. Not just using for the concessions.
Why would bookmakers allow this to keep happening? They clearly feel it represents good value to them or they have to do it as others continue to do it. Either that or they havent managed to come up with another way to attract new clients in the last 20+ years. I guess the easiest way to lure in an unsuspecting new punter is with the promise of easy free money. I am amazed that such incitements are still allowed with regard to responsible gambling but I suspect that may change sooner rather than later.
The quality of new accounts that bookmakers are seeing opened is falling through the floor. The Average Revenue Per User (ARPU) continues to fall noticeably. Its no huge surprise if accounts are opened just for free bets and/or the account is restricted prematurely. I guess the bookmaker can tell the financial world that ‘x’ number of new accounts have been opened. Given we know that 70% of revenues come from 5% of customers maybe they aren’t overly fussed by the quality, as long as the ‘growth’ is perceived to be there.
I have no doubts that the golden goose era of matched betting in the UK has diminished markedly. Whilst free bets continue to exist though, money will continue to leak from the industry. America has a huge problem with it where the sign up offers are insane. It just feels a weird world when bookmakers are happy to lose so much money to those who don’t/wont bet. I guess it just helps to paint a picture of a pretty broken industry.
ProPunting 