Understanding Odds
What you'll learn:
- How to read decimal and fractional odds
- How lay odds and liability work
- The sweet spot for maximising free bet value
To get the most from matched betting, you need to understand how odds work. This guide covers how to read odds, how they affect your returns, and how to choose the best odds for maximum profit.
Decimal vs fractional odds
UK bookmakers traditionally used fractional odds (e.g. 5/1, 2/1, 6/4), but most matched bettors prefer decimal odds because they're easier to work with in calculations.
- Fractional 5/1 = Decimal 6.0 — for every £1 you stake, you get £5 profit plus your £1 stake back.
- Fractional 2/1 = Decimal 3.0 — £2 profit per £1 staked, plus your stake.
- Fractional 6/4 = Decimal 2.5 — £1.50 profit per £1 staked, plus your stake.
The conversion is simple: divide the fraction, then add 1. So 5/1 becomes (5 ÷ 1) + 1 = 6.0. We recommend switching all your bookmaker accounts to decimal odds.
| Fractional | Decimal | £10 bet returns |
|---|---|---|
| 1/1 (Evens) | 2.0 | £20 |
| 6/4 | 2.5 | £25 |
| 2/1 | 3.0 | £30 |
| 3/1 | 4.0 | £40 |
| 4/1 | 5.0 | £50 |
| 5/1 | 6.0 | £60 |
| 8/1 | 9.0 | £90 |
| 10/1 | 11.0 | £110 |
What odds mean for your returns
With decimal odds, your total return is simply stake × odds. If you bet £10 at odds of 3.0, your total return if you win is £30 (£10 stake + £20 profit).
Higher odds mean a bigger potential payout but also reflect a less likely outcome. In matched betting, the actual probability doesn't matter — we're covering both sides — but the odds do affect how much we profit and how much we risk at the exchange.
How lay odds work
When you place a lay bet at an exchange, you're betting against an outcome. The lay odds determine your liability — the amount you could lose if the outcome happens.
Lay liability = lay stake × (lay odds − 1). For example, if you lay £10 at odds of 3.0, your liability is £10 × 2 = £20. This is the maximum you could lose on that bet.
Calculating lay stakes — a worked example
Let's say you want to back £10 at a bookmaker at odds of 3.0, and the lay odds at the exchange are 3.1 with 2% commission.
The lay stake formula for a qualifying bet is:
Your lay liability would be £9.74 × (3.1 − 1) = £20.46. You need this amount available in your exchange account.
Understanding qualifying losses
When you place a qualifying bet, you'll almost always lose a small amount. This is because the back and lay odds are never perfectly identical, and the exchange charges commission on winning lay bets.
In the example above, whether the back bet wins or loses, you'd lose roughly £0.50. This is your “qualifying loss” — the cost of unlocking the free bet. As long as the free bet profit exceeds this loss, you're ahead.
If back wins
- Bookmaker pays out: +£20.00
- Exchange liability lost: -£20.46
- Net result: -£0.46
If back loses
- Bookmaker stake lost: -£10.00
- Exchange lay stake won: +£9.55
- Net result: -£0.45
Why close odds matter
The closer the back odds and lay odds are to each other, the smaller your qualifying loss. Ideally you want the difference to be as small as possible — a gap of 0.01 to 0.10 is excellent.
Avoid events where the lay odds are significantly higher than the back odds. A large gap means a larger qualifying loss, which eats into your overall profit.
The sweet spot for free bets: 4.0–6.0
- Too low (below 3.0): You retain a smaller percentage of the free bet value because more of the “return” is the stake (which you don't get back with a free bet).
- Too high (above 8.0): The lay liability becomes very large relative to the profit, tying up a lot of exchange funds.
- Sweet spot (4.0–6.0): You typically retain 75–82% of the free bet value with a manageable liability.
Key takeaways
- Switch all bookmaker accounts to decimal odds for easier calculations
- The closer the back and lay odds, the smaller your qualifying loss
- For free bets, odds of 4.0–6.0 give the best balance of profit and liability
- Use a calculator — don't try to do the maths manually