4. I have a fairly addictive personality. Is MB'ing likely to become a problem?
As someone who spent the best part of 15 years working in and around online gaming, I'm going to post the link to Gamcare. Matched betting vastly reduces the risk but it is still gambling and the 'rush' and euphoria type feelings you get when gambling still can occur - just read some of the posts on this thread of reactions when people placed their first bets.
The questions on the self-assessment tool are well worth looking at - warning signs that you might have a problem developing include chosing to spend time gambling rather than with family and friends (this can be a particular risk with matched betting as it's awfully easy to convince yourself that you're 'earning' and not gambling).
Similarly chasing losses - so trying to win back what you've lost straight away is a big warning sign we always looked out for, especially if you place larger bets than usual to try to recoup faster (eg if you normally do £10 bets but after a significant loss you decide to bet £50 the next time to win it all back in one go).
If you do find yourself worrying you have a problem all EU regulated online gaming companies have to offer you cooling off/time out periods where they will suspend your account and you absolutely will not be able to get into it during that time (they will also shut down any new ones you try to open to get round it in that period pretty damn fast as well). If you are genuinely concerned you have a problem then you can opt to self-exclude which will close your account for eg 6 months or permanently. You can also call them and ask for advice if you're worried you have a problem and they can give you guidance/help you set the tools to self-exclude etc and give you details of support organisation.
But... What's in it for the bookmakers if customers can't lose?
The traditional non-exchange bookies nearly always make a profit. They price odds so that the payout is less than the actual probability of something winning. So if the true probability of something winning is 25% then they will offer closer to 2-1 rather than 3-1 (so 3.0 rather than 4 in decimal odds). Also the favourites don't always win in the long run. Bookies look at performance over a year/season - that's why you sometimes see headlines that Ladbrokes eg had a bad quarter as all the favourites won at the start of the football season but over time they will make it back.
The exchanges don't care so much as they're taking a percentage of your winnings (not stake as someone mentioned up thread); for every bet there is a winner - obviously they tend to make more when the backer wins rather than the layer but whoever wins they're taking their commission. Matched betting works because you're two bets are with completely separate companies (unless you're using PaddyPower (or Betfair) Sportsbook and Betfair Exchange as they're owned by the same company) so they don't see both sides of your matched bet.
Free bets make money for the bookies because they bring in customers - matched betting off sets a lot of the customer's overall risk but the back bets with the free bets do lose so cost the company nothing. They also know that once you've got an account set up it's very easy to have a flutter on other things and use your winnings to make other bets/keep deposits. I suspect a fair few MNers who've opened accounts online through this will stick a few quid in to have eg a flutter on Gold Cup or Grand National next year for example when they might not have otherwise thought to open an online account.