Dutching is a very similar concept to traditional Matched Betting whereby more than one selection is backed such that profit and loss can be equalised across each selection. It differs from matched betting simply by the fact that only back bets are used across multiple selections, rather than having one back bet and one lay bet on the same selection. The main advantage of this is that if we can find good odds we can avoid paying commission on the exchange which can lead greater potential profit. Sometimes this will even allow us to create arbitrage bets that wouldn’t be possible if we were using an exchange.
Dutching Example 1
We can see that the best odds we can get are 3.00/3.20/2.75 with Bet365/PaddyPower/Comeon! each. The total overround is only 1% since 1/3.00 + 1/3.20 + 1/2.75 ≈ 1.01. To work out what stakes we should use, you will need to know what is the maximum amount you will be staking for at least one of the bookmakers. For this example it would be £50 with Bet365 (they often have big offers for big matches).
This means that our maximum win at any bookmaker will be £50*3.00 = £150. To equalise profit we simply need to calculate what stake we need on the other outcomes to make a £150 win:
Paddy Power: £150/3.2 = £46.88
Comeon!: £150/2.75 = £54.55
To confirm our calculations:
Profit if Juventus win: +2*£50 – £46.88 – £54.55 = -£1.43
Profit if Draw: +2.2*£46.88 – £50 – £54.55 = -£1.41
Profit if Real Madrid win: +1.75*£54.55 – £50 – £46.88 = -£1.42
Ideally we want to round our stakes to the nearest £5 or £10 since oddly precise amounts will flag you as not being a regular ‘mug’. It will mean that you could lose or win more than -£1.42 but the EV will be a approximately the same. In this case it would mean placing £50 on each outcome. Paddypower and Comeon! usually have offers for £25 and £20 respectively so we will be staking much more than is necessary to qualify for their offers. This is good. Staking much more than the minimum for offers will keep you under the radar for longer as it is less obvious that you’re trying to take value from the bookie. If you’re curious this is what the odds on Smarkets were:
If we were to lay each of the £50, £25, and £20 offers separately without taking into account combined liabilities the loss would be £1.49, £0.73, and £0.75 for a Juventus/Draw/Real madrid win respectively.
Dutching Example 2
Here is another example, except this time we can create an underround book to create a ‘risk free’ profit.
If we place £25 on Ukraine to win at 1.9 with Interwetten then we can place the following bets at the other bookmakers:
SBObet: 25*1.9/3.45 = £13.77
Comeon: 25*1.9/5.75 = £8.26
With the profit for each outcome:
Profit if Ukraine win: +0.9*£25 – £8.26 – £13.77 = +£0.47
Profit if Draw: +2.45*£13.77 – £25 – £8.26 = +£0.47
Profit if Finland win: +4.75*£8.26 – £25 – £13.77 = +£0.47
As I mentioned before, in reality you would want to round the stakes which would mean that you could potentially lose money on a particular outcome if the book percentage is too close to 100%, like in the example above.
The odds for this match on Betfair and Smarkets were:
If we assume that we took these odds and had a commission of 2% then the P/L would be:
Ukraine: Back £25 @ 1.9, lay off @ 1.85 –> profit of £0.43
Draw: Back £13.77 @ 3.45, lay off @ 3.5 —> loss of £0.39
Finland: Back £8.26 @ 5.75, lay off @ 6.00 —> loss of £0.48
Overall, about breakeven.
In dutching example 1 we calculated our stake sizes and qualifying loss if we chose to only place back bets. This was so that commission can be avoided and also so that we appear more like a regular punter since we’re placing bets greater than what is needed to qualify for a promotion. We can however match our bets in the usual way by backing and laying each selection and benefit from what’s known as combined liabilities.
Combined liabilities is essentially dutching with lay bets instead of back bets. Since we only pay commission on net winnings for a market (e.g. win-draw-win or O/U 2.5 goals), a lay bet on any selection that is green (i.e. would have given us a profit) will mean that we will pay less commission if that selection wins. What’s more, since only one lay bet can lose in any given market, we will require less money to cover our liability as any loss from a lay bet will be at least partially offset by the profit of another lay bet.
Combined Liabilities Example
Going back to Dutching example 1, if we were to lay each selection independently without considering combined liabilities our lay stakes and P/L would be:
Juventus win: Back £50 @ 3 at Bet365, Lay @ 3.05 —> Lay stake £49.50, Loss of £1.49
Draw: Back £25 @ 3.2 at PaddyPower, Lay @ 3.25 —> Lay stake £24.77, Loss of £0.73
Real Madrid Win: Back £20 @ 2.75 at Comeon, Lay at 2.82 —> Lay stake £19.64, Loss of £0.75
Total loss: £2.97
If we used the minimum stakes required to qualify for each offer. Use this matched betting calculator to confirm the calculations yourself.
If we place these bets on the same exchange however we can now recalculate our P/L for each outcome:
Bookmakers: 2*£50 – £25 – £20 = +£55
Exchange: -£49.5*2.05 + £24.77 + £19.64 = -£57.07 (-49.5*2.05 is our liability from laying Juventus winning)
Since we lose on the exchange we pay no commission, hence our net profit is: £55 – £57.07 = -£2.07
Bookmakers: -£50 + 2.2*£25 – £20 = -£15
Exchange: +£49.50 – 2.25*£24.77 + £19.64 = +£13.41
Net profit: -£15 + 0.98*£13.41 = -£1.86
Real Madrid Win:
Bookmakers: -£50 – £25 + 1.75*£20 = -£40
Exchange: +£49.50 + £24.77 – 1.82*£19.64 = +£38.53
Net profit: -£40 + £38.53 = -£1.47
For each outcome the qualifying loss is significantly lower than calculating matched bet independently, nearly by as much as 50% in the case of Real Madrid winning. What’s more we only require £57.07 in our exchange account to lay these selections instead of £101.48, allowing us to use the money elsewhere.
If you have any questions feel free to leave a comment below and I will endeavour to answer as soon as possible.