#11: My Professional Gambling Story – Matched Betting & Arbitrage

S: Hello and welcome back to another episode of the lazy entrepreneur I’m your host Sam Priestley and as always I’m joined by my lovely wife Emma say

E: hello

S: today we’re gonna be telling the story of how I kind of got started in working for myself it’s a story that Emma takes almost zero interest in so she won’t have heard most of this before I remember I want to try to recruit you at one point in this and you just laughed in my face I never brought up again

E: I vaguely remembering it yes

S: you’re one of the only people I’ve met who weren’t at all interested in this but therefore it’ll be new to you and hopefully if I flop over stuff too quickly you’ll bring back and answer questions

E: well what I do remember from that initial conversation was I wasn’t interested but I did say a few my friends were

S: yeah that that makes sense what we are is talking about well we’re talking about professional gambling which is actually the first thing I did that really made any money I started in my second year university in a 2008 and then I did it kind of full-time ish up until about 2014 I did do some other businesses during a time generally especially once we got serious about it I was doing it with with friends we sort of formed the partnership and we always had this idea here that we wanted to be able to build other other businesses as well you know invest the money we were making and so sometimes I would go off and focus on something else so friends as most of 2012 was taken up with our price comparison website ET advisor but generally you know for our most that time there was at least two hours free I was working full time on this so what do I mean my professional gambling well I’m talking about anything where we had kind of mathematical advantages over the bookmakers or casinos and were making money it all started with cash back sites so theres websites such as top cashback quidco cashback Kings places like that where they basically works similar to affiliate sites on blogs where businesses will give them a bit of money if they refer customers and these cash back sites would then pass on most of that commission to to the user that might not make sense and I’ll give you an example so for instance let’s say something like coral which is a bookmaker was on there they would say to top cashback any customer you refer to us will give you 50 pounds and then top cashback would say report on their website anyone who signs up for our link will give you 45 pounds so often what you could do you can sign up someone like or on their requirement be have to deposit 50 pounds and you’d get a 50 pound cash back from cash back site which meant effectively that money he put in there was free you know you could bet it a few times and then if you want withdraw it

E: yes it’s corrals way of marketing and trying to get a new customers

S: exactly that’s exactly it they also go a step further they often give you a bonus as well when you sign up you’ve probably seen them around, sign up to coral or get a 50 pound free bet things like that which then took us on to next step which is very well known now it’s called match betting and it’s basically where you take these free bets they different bookmakers give you and you you fulfill their requirements which often to bet it maybe once or twice you do that by kind of hedging your bet at a different bookmaker or a bet in exchange

E: and that step from going from getting this free money just to start gambling and then match betting is that quite a normal step for kind of an online gambler to do?

S: well so what they’re hoping is donate what they hope is that you’ll end up and that start using it now if you’re recreational betting yeah so they know they gonna lose money from your first few bets and then eventually but it is now very well known these cash back sites don’t really exist much anymore but a kind of a match betting side of it does right and that’s very very well known like it’s at the time we kind of had to work out what to do ourselves whereas now there’s hundreds of guide, there’s a guide on my blog there’s loads of services you could sign up to and pay a monthly fee and they’ll give you all the offers every every day then as they come out and

E: you say at the time that was about ten years ago you started

S: yeah 2008 yeah 2008 we were doing this why hedging out a tennis match there can only be one winner yeah so if you bet on both sides at the correct odds you can you know even out or potentially make a bit money just from that if you find the correct odds of different places after that we don’t moved on to casinos which was a bit more complicated but they had the same kind of offers of a free bet you can’t really hedge out in them so instead you’re taking a bit of a risk but it’s kind of a mathematical risk so you started for instance you put 100 pounds in I give you a hundred pound bonus so now you got 200 pounds and you say you need to bet once in order to make any money so you could for instance put that 200 pounds on red on roulette if it loses you’ve lost a hundred pounds if it wins you’ve made three hundred pounds so it’s almost 50/50 chance slightly less than that but in general if you do that 100 times you’re gonna make those money like anyone ever offers you lose 100 or make 300 on a coin flip you know you should probably take that that’s a good good bet but it’s not very free whereas the matched betting stuff we started with was so it’s kind of a slow progression as we got more confident with the mass we got more confident with you know investing money on these kind of things got better and better and at the end of my end of that year of university the year before in a thumbhole days I’ve worked as a caretaker and I’ve done 250 pounds a week and I thought if I can do this on a full-time through the holidays and make 250 pounds a week then I’ll do that instead and I did and I managed it and it’s kind of all uphill from there then in my my third year of of university we started to take it to a slightly bigger level I so I get into what’s called arbitrage which is situations where two bookies disagree on who the favorite is in a certain event so that’s a tennis match example if their odds are different enough you can bet on both places and regardless of the outcome you can make a bit money so I was a computer science student so my dissertation for my undergrad was on arbitrage and I’ve AC developed software which would kind of scan lots of different bookmakers and find opportunities where there was there were these places where you go bet on both things and and make a bit of money

E: was that really complicated

S: so I didn’t do that well in my dissertation not because the stuff didn’t work that software is still in use by people today in much more advanced forms but it’s not very groundbreaking in terms of computer science and I wasn’t invented any new algorithms

E: but it was quite commercial

S: yeah it’s very commercial which is not what they wanted they wanted like a research project for pushing the boundaries of algorithm design or something yeah efficient storage you saw something like that but it wasn’t that I think I got sixty eight percent or something on it which is like t high

E: There’s a high t1

S: yeah but considering it was making me quite a bit of money at a time I was a bit cheeky actually dumped like a youthful project on that practical side yeah and to be fair I went back I did a master’s afterwards and for my Master’s we did another practical thing but this time we chose our supervisor a bit better

E: yeah

S: and we found someone who really appreciated practical stuff

E: yes and would mark you accordingly

S: and I think on that one we got 80 percent or something ridiculous and that was a like a GPS system that would um for cars which would take the date from all different cars and map you know the best route based on traffic and all that kind of stuff stuff which is now quite common on at the time wasn’t yeah so that was now, whereas nowadays you can pay computer programs so nowadays you can pay and rent software like this it’s quite common and you know I mentioned before the kind of match betting services where you pay like a monthly fee often those ones now have they now have these odds finders as they’re called built-in so that you can you know find good matches for your match bets but other time this is we were they were for you around but we would kind of targeting markets that nobody else was so we’d be the only people arbitraging them then you know we got we got more complicated you know big part of what we’re doing was looking for places where bookies would would mess up slightly so we were looking for stuff where there might be a little difference between one bookie and another and where that rule difference wouldn’t leave like an opportunity we were looking for mistakes that companies would make you know if they miss price their odds you know for instance we word for like smaller bookies we would often work out the formula they were using to create the odds so when there’s a new market especially something a bit weird like whatever the the number of red cards in a football match where it’s not a very well understood market they’d often have quite a simple formula to create those odds and then once we knew that we can reverse-engineer it and find the opportunities where that formula was wrong I mean we can make some money we yeah so a lot of it was looking for these weird opportunities another example was a new betting exchange opened and a betting exchange is where instead of betting against the bookie you some market place so you can buy and sell bets against a lot of people we discovered that they were kind of propping up their own they were they were playing their own markets using quite simplistic like Robo betters we found that we can manipulate those Robo betters in order to like do stupid things where we could take advantage on it they worked it out pretty quickly and sent us a polite email asking us to stop. And it kind of just went from there we did a lot of data mining where we would look at how the change in odds word would ripple out so stuff like if a team scores in a football match how does that affect the number of the odds of like the number of red cards happening in that match and so we so once you get kind of a few levels down to that you’ll find that people are very quick to change the odds on them saying who’s gonna win the game but they might not have mapped that interaction far enough back and so those odds the altered red cars happening would change quite slowly so we did that for a while eventually we got we started running two interproblems with the bookies working out that we were smart betters and kind of limiting our accounts. nowadays they’re very quick to do that if you’re doing arbitrage as soon as they workout that you’re not a regular punter they will close your account down which is actually legal in some places that’s illegal in Australia but it’s not illegal here yeah and they have the right here to say we don’t want you as a customer anymore so what we started doing we started leasing out our software and our knowledge to other people in exchange for like a portion of the profits they were making and I think that’s why I try to recruit you to do I’m no gonna go into too much detail with how that works because I’ve still got friends who do that you kind of get the idea we’d have sort of tens of hundreds of people who would be using our software who we would be you know communicating with on basically a daily basis on you know what in such situations and basically focusing on the software side of it

E: how would it work would you send out like an email to these people saying these are the opportunities for today

S: no it was all software that they would have running on their computers and then it would give them kind of opportunities and they’d always be on whatsapp or a phone call type things okay again I don’t want to go into too much detail on it because people are still doing it and I don’t really want to tread on any of my friends toes –he’s who are oh no no it was it was kind of like a much more intense version of what a lot of these so now there’s a lot of software you can sign up to you pay like a 10 pound 15 pound 20 pound a month and you’ll get along with ten thousand other people daily offers a lot of these opportunities so we would have that but it was much more intense and only with a hundred people as opposed to ten but they would be giving us a lot more money than twenty quid a month

E: yeah

S: thinking about maybe we should have gone the other route because those companies are doing very well and they’re a bit more in the open with it where us recruiting was quite a big challenge because we actually find people who are interested and then kind of convince them that it worked we weren’t charlatans yeah yeah exactly we did that, things got harder that still kind of worked. we tried a different a different method at one point we we wanted to place the bets manually going into bookies because there you don’t need accounts they don’t know who you are but if they recognize you too much they’ll get to know it so we so built up a network of people who we would you know give them money they would go to different bookmakers place the bets based on an app we developed for their phone and then they were going take photo for the betting slip and it would go to our computer program and it would work out you know the odds of it winning and all this kind of stuff and then it will determine if the bet won and they would go back and pick up the money at the end of the day give it to our agent he was like I mean uh agent in these groups of people going round and made you know get recognized and have to dress up in disguises

E: that’s my favorite bit

S: yeah wigs running around that kind of worked you know there’s a lot of leakage when you have so much cash lying around just people making mistakes and maybe people stealing from you I don’t know so it didn’t work quite as well as all online and also people thought getting recognized quite quickly because they were placing kind of like 500 pound bet on a quite obscure marketplace no one else would bet on yeah the pattern was quite easy for people to track by this time you know we got to about 2014 things were still going well our software was real cutting edge and then I quit I retired really basically I really I’d got a bit fed up with the business I made quite good money out of it and and I wanted to do something where I was actually like contributing towards the world we have this betting you know it was intellectually stimulating because it’s always like competing with the bookies and trying to find my opportunities and all this kind of stuff but really you know the money we’re making it was just coming out of the profits the bookies were making we weren’t actually improving the work we weren’t creating a product it’s always a bit adverse and the sartorial for the word is you know you’re always trying to deal with people who don’t want to deal with you you know how all this is 100% legal and you know we weren’t doing anything wrong but if we were out in the open we would very quickly have been you know we were making money as long as the bookies didn’t know what we were doing as soon as they got clever enough to close one opportunity we would have to like find another one I should say it still works and as I said I’ve still got friends who are doing nowadays and still doing really well but I just got a bit fed up with it I moved on obviously now there is a bunch of stuff that I do go back to every now and again I’m really interested in automatic algorithmic trading on betting exchanges which is where you may see like create some like AI style bots that just goes around placing bets for you on exchange money I’m a bit looking and maybe like once every couple of months I’ll go back and do some work on that and I think I will spend a lot more time on that coming in because I just find it really interesting and I’m I kind of have this I did like this idea to eventually it’ll be a just like a money machine you turn it on it goes off and prints you money I know I think it’s very possible and if anyone could do it I should be able to do it because you know at some point we were like top five in the world a professional gambling and you know things have moved on a bit but not that much you know, stuff like you know we collected more data than I think even the bookies have I still have all that data so I couldn’t like at some point go and delve into that and find opportunities but each time I start doing I realize I’m not good enough programmer to work it all out a lot of things I’m more interested in yeah but I do get back to it every now and again

E: and you made the conscious decision to stop doing this

S: yes yes yes and if I did I’d be more of a hobby than a business you know I’m much more interested in the other stuff we’re doing in a moment

E: yeah and I think one of the key things the successes of this type of business was that you did make quite a lot of money that meant that you can invest it into other businesses

S: yeah yeah and you know it’s part of this whole you know podcast the blog and the idea of doing stuff for the lifestyle you know doing work so that it creates a lifestyle you’d have rather than living a life that enables your work so once I kind of made you know I made a decent amount and my table tennis business was quite taken off which was a bit more hands-off and I thought you know I could retire and travel the world or laze on my arse and watch TV 24/7 for the next ten years or so and be fine play computer games yea got quite interested in like early retirement and you know having been financially independent sort of having enough invested that you didn’t really need to work

E: and this business really helped you to do that

S: yeah definitely I mean you know other things happened since with some of the investments are made I haven’t worked out so well but still you know it’s it I’ve got a lot to be thankful for for that and effectively a very young age I was able to make a decision just to focus on stuff I want to rather than the jobs that made the most money

E: yeah

S: so where we’re gonna leave this you know this isn’t an advert for you to start gambling in fact you probably if you have any sort of addictive personality or you have any history of you know you’re losing money betting and this is really not for you I think one of the reasons we all did quite well is that none of us had really ever gambled before and the gambling part never really interested us it was all like the maths behind there making the money the opportunities if that does sound like you maybe have a look into matched betting it’s now very easy to get into the it will be very difficult for you ever to get to the level we were at because everything’s a lot more out in the open now which means there’s a lot more people doing it but also means the amount you can make is a bit more capped the bookies know these opportunities exists and they’re happy with them but anyone that they limit them so you know you can make a few thousand pounds maybe two or three thousand pounds fairly easily have a look at my own blog post on matched betting just goggle sam priestley matched betting to find it or if you look at arbitrage I got some on that as well or you know you can post a comment if you’ve got any questions yeah I hope that wasn’t too boring for you emma yeah is there anything there that you found you didn’t know or that we have more questions about

E: I think I did know most of that

S: yeah you probably pick up a bit more when you hear me talking to other people

E: exactly because something particularly when we’re traveling something that a lot of the other travelers are quite interested in

S: yeah when we were traveling the world and saying hostels and stuff we didn’t meet a few people who were doing it who were matched betting kind of full-time well not full-time but to fund their travels yeah

E: not necessary doing it very well were they weren’t they weren’t at a big level but making a thousand pounds a month which if you’re staying in hostels and living in South America is more than enough yeah a lot of people use it for, yeah don’t approach this sort stuff as a business like it’s very difficult to become to make any like real big amounts money out of it and there’s very only very there’s only room for a very small number of people doing that and they’re all taking initiative if you just follow the matched betting recipe and finding opportunities there that no one else knows exists but you can make it a bit of money

E: topping up your income

S: yeah

E: good to go travelling or you want to buy a kitchen or something well I feel that’s just me

S: or just want to invest maybe it’s good or if you’re lazy and you don’t wanna get a job after university my use this as a way to delay that a little bit while working on your other businesses it’s kind of how I started kind of all started

E: yeah

S: it gave me not so much the money because we often didn’t really invest much money into things we were starting it was more the time and you know and also the way to think well well yeah when I say invest into businesses I mean it pays your lifestyle costs while you set up these new businesses

E: yeah

S: I don’t know that you have hundreds of thousands of pounds for investing in this brand new business the idea is that you’ve got a bit of money to pay your rent and you eat that month while you have lots of time to think about setting up these new businesses

E: yeah definitely

S: all right let’s leave it up then thanks for listening as always you can email me at hello @ sam priestley dot com please subscribe and if you leave us a five star review whatever podcast service you’re using I would really appreciate it thank you very much and goodbye