## What is Underlay?

Underlay is the single most important technique to learn if you want to do Matched Betting longer term, it can make otherwise unprofitable offers profitable, help to ensure maximum profit from bookies that are known to limit or close accounts and generally help balance profit vs cashflow.

At it’s simplest, underlaying means calculating your lay stake so that you get more profit if the bet wins at the bookmaker and less if it wins at the exchange.

## When to Underlay

You can underlay any bet but as a general rule, if you’d rather the bet won at the exchange than the bookie you should be underlaying.

Many bonuses give you a bonus immediately when you deposit then have a wagering requirement that must be bet prior to withdrawing. The key to these is understand that if your bookmaker balance reaches zero the bonus is finished and you don’t have to complete the WR.

Underlaying is most effective when you’re placing a bet with your full balance (including bonus) in one go.

## How does Underlaying work?

Here’s an example which will explain the immense benefits of Underlaying.

Let’s say we have a 100% to £200 bonus with a 6 x Bonus wager requirement. This means that we have a £1200 WR, let’s also assume the odds are ok but not amazing and that we can find odds of 2 at the bookie and 2.1 at the exchange.

If we placed a series of bets and with each one calculated the lay stake so that we got an equal return whatever the result, we could expect to lose about £90 of the bonus (assuming 2/2.1 odds and 5% commission at the exchange) this is a significant proportion of the bonus. (Click here to test it out on the lay stake calculator)

**Take the time to work this through and understand it**

If it takes you 30mins to understand it’s probably the **2nd most profitable 30mins you’ll spend in your life** (the 1st being the introduction to matched betting)

### Think about the first bet…

What happens if we place the full £400 (£200 deposit +£200 bonus) on the first bet at 2 and lay £390 at the exchange at odd of 2.1

One of two things will happen:

1. The bet at the bookie wins, -we now have an £800 balance at the bookie, have lost £30 from the qualifying bet and need to complete the WR (losing another £60).

OR

2. The bet at the exchange wins, we now have £0 at the bookie, have lost £30 from the qualifying bet, the bonus is complete as our balance reached zero and we don’t have to complete the WR

**Which scenario would you rather have happen?**

The first which takes more time and makes less money or the 2nd that is quicker and makes more profit. If you said the 2nd, congratulations we agree.

The fact that you prefer one scenario over another makes this a form of gambling, you’re gambling that number 2 happens.

### Lets look at another way of playing it

Now lets look at what happens if we play this in a slightly different way, again we’ll place the £400 back bet at odds of 2, and again we’ll be laying the bet at 2.1 but this time we only lay £363.64 (underlaying).

If the bet wins at the bookie we’ve again got an £800 balance and need to complete the WR (losing another £60 completing it) but this time we’ve lost £0 on the first bet.

If the bet wins at the exchange we again have £0 at the bookie and have completed the bonus WR (because our balance is zero) but this time we’ve lost about £55

W**hich scenario would you rather happen in this 2nd example?**

With this 2nd example it’s slightly less obvious which the preferred scenario is.

We’d still prefer the 2nd scenario to happen as we’d be placing 1 bet and losing £55 of the bonus rather than placing multiple bets to complete the WR and losing £60 of the bonus.

This example of laying so that we get no profit or loss if the bookmaker bet wins is often called a Full Underlay

### What if we take this further?

Finally we’ll look at what happens if we underlay by even more.

Taking the same £400 back bet at odds of 2.0 and again having lay odds of 2.1, this time we’ll only lay £350, the possible results are:

1. The bet wins at the bookie we have an £800 balance, have to complete the WR (losing £60) but have this time made a £15 profit on qualifying bet.

2. The the bet wins at the exchange, the bonus is finished as the bookie balance is at zero, but we’ve lost £80 of the qualifying bonus.

**Again we’ll ask the question which scenario would you prefer to happen?**

Do you want to place 1 bet, lose £80 of the £200 bonus but have completed the bonus. Remember we still have £120 left of the bonus as profit.

£120 profit for placing 1 bet at the exchange and 1 bet at the bookmaker is not bad going.

Or

Place Multiple bets gaining £15 on the first bet but then losing £60 completing the WR leaving you with an overall qualifying loss of £45.

£155 profit overall

With this final option we’d struggle to have a preference between the two scenarios so for me this is the perfect lay stake and this is the approach I personally use.

## When to underlay?

Underlaying is can be used in many different scenarios but it’s of most use when you can place your full balance including bonus on 1 bet and the bonus is completed by getting the balance at the bookmaker to zero (i.e. not a post rollover bonus).

## The effect of higher odds on an underlay

The odds you bet at can have a huge impact when Underlaying. Here we look at what happens if you make the same lay stake at different odds:

Lay £390 | Lay £363.64 | Lay £350 | |||||

Back Odds | Lay odds | Back bet wins | Lay bet wins | Back bet wins | Lay bet wins | Back bet wins | Lay bet wins |

1.1 | 1.176 | -29 | -29 | -24 | -55 | -22 | -68 |

1.5 | 1.568 | -29 | -29 | -13 | -55 | -5 | -68 |

2 | 2.1 | -29 | -29 | 0 | -55 | 15 | -68 |

3 | 3.125 | -29 | -29 | 27 | -55 | 56 | -68 |

4 | 4.15 | -29 | -29 | 55 | -55 | 98 | -68 |

5 | 5.175 | -29 | -29 | 82 | -55 | 139 | -68 |

7 | 7.225 | -29 | -29 | 136 | -55 | 222 | -68 |

10 | 10.3 | -29 | -29 | 222 | -55 | 345 | 68 |

Increasing the odds has no impact on the amount you win at the exchange but can have a huge impact on bookmaker winnings.

When considering the odds to look for you should balance your cashflow and profitability against the risk of running up a large balance at the bookie. In this example you could easily get a balance of many thousands at the bookie if your back bet wins, don’t assume that higher odds bets never win.

It’s rare but they do win sometimes, think about if you want thousands in the bookie you’re playing at.

My personal preference is to look for close matches at odds of 2-4 as that’s a good balance for me personally of making good use of underlaying and minimising the exchange liability and potential bookmaker winnings.

## Final thoughts on Underlaying

Underlaying is essential when you move onto the larger bonuses that have huge WR’s, it’s as much an art as a science but my general rule is:

**If I care what the result is, my underlay is wrong.**

If I want to win at the bookie I need to increase my Lay

If I want to win at the exchange I need to decrease my Lay

A great explanation of Underlaying. It took me some time to understand all the nuances of this technique but it was well worth it.

As you point out, a critical factor is cashflow. It takes time to build up a good working balance at the Exchange in order to take full advantage of underlaying. Thanks for this.

“Let’s say we have a 100% to £200 bonus with a 6 x Bonus wager requirement. This means that we have a £1200 WR, let’s also assume the odds are ok but not amazing and that we can find odds of 2 at the exchange and 2.1 at the bookie.”

This confuses me. Because in the next section, you say:

“Think about the first bet… What happens if we place the full £400 (£200 deposit +£200 bonus) on the first bet again at 2 and lay £390 at the exchange at odd of 2.1”

You said “What happens if we place the full £400 on the first bet again at 2”. The word “again” is confusing here, because the preceding scenario didn’t mention placing a bookie back bet at 2. It mentioned placed a lay bet of 2 at the exchange.

So, I’m wondering if this an error, or perhaps bad punctuation/choice of words leading to confusion? Assuming so, please consider rewording it to “What happens if we place the full £400 on the first bet, but this time at 2”.

Cheers!

Sorry for the confusion and thanks for highlighting. It is a typo which I’ve now correct ed in both places so hopefully nowmakes sense but if you;ve any other questions please let me know.

Thanks for fixing that up! Makes more sense now. 😉

My other question is: When underlaying, wouldn’t it be easier to always look for higher odds at the bookie and lower odds for the same event on the exchange? Then if the exchange wins you break-even, and if the bookie wins you earn higher amounts to offset any losses (while still working towards completing the WR in both cases).

Ah, another thing you mentioned, is that the 6x WR is £1,200. Meaning you have to turn-over that amount before you can withdraw any winnings that came from the bonus bet. Considering the following quote:

“The bet at the bookie wins, -we now have an £800 balance at the bookie, have lost £30 from the qualifying bet and need to complete the WR (losing another £60).”

1) How is the entire £1,200 WR completed after losing only another £60 at this juncture? Are you able to explain the breakdown of the 6x £1,200 turn-over WR?

2) What does the ‘qualifying bet’ refer to in this context? Does it still mean the initial $200 staked to claim the bonus bet? If so, where does the lost £30 come from?

Many thanks!

Yes in theory larger bets can be better but if you go to high you’ll run out of cash and start.

The first bet you place is a £200 bet which results in a £200 bonus being credited which is then subsequently bet as well, £400 in total.

£1200 WR – £400 bet = £800 WR remaining.

£200 back bet at 2.0 layed at odds of 2.1 with commission of 5% = £15 loss. Repeating this twice (for both the £200 cash bet and £200 bonus) results in 2 x £15 = £30 loss.

If we continue to assume £30 loss per £400 bet then betting another £800 will result in a further £60 loss.

Hopefully this makes sense….

Ah, I see what you mean now. This is what threw me off:

“The bet at the bookie wins, -we now have an £800 balance at the bookie, have lost £30 from the qualifying bet and need to complete the WR (losing another £60).”

I took the part in brackets to mean the last requirement needed to complete the WR (i.e. Just turn-over another £60 and you’ve fulfilled the WR). But you intended it to mean how much money you’ll ultimately lose in the process of completing the WR. May I suggest re-wording the section in brackets to:

“The bet at the bookie wins, -we now have an £800 balance at the bookie, have lost £30 from the qualifying bet and need to complete the WR (losing another £60 in the process).”

How do you calculate the £55 loss in scenario 2?

Apologies but I also have a coupled of extra questions about the article.

Can you please clarify how you calculated the lay figures of £390 and £350? I understand how you got to £363.64.

Also, what is the advantage of including £200 of your own money with the £200 bonus, or is this something you have to do?

The final few lines of the article are also causing me a bit of confusion. I always though that if you wanted your bet to win at the bookies you would lay less at the exchange so you would have more profit overall and be paying less commission at the exchange. Can you please clarify?

Thanks for your help.

Hi Baz,

I’ll start with the last point. Think of it simply if you want something to happen then you’ll be happy to accept less profit if it does happen. If you want it to win at the EXCHANGE then lay less so you’re compensated if what you want to happen doesn’t. You want to bet in such a way that you make more if what you want to happen doesn’t.

Re including your own money – you have to in order to get the bonus

Re your other queries, you might find it easiest to put the numbers in my scenario into a calculator like Ultimatcher, I expect that will answer your questions, if not let me know and I’ll try and help.

Cheers

Matt

Thanks very much for that Matt, I’ll give it a go in Ultimatcher.