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Not Just A Forex Trick – Arbitrage Betting Can Be Used With Bookies Too

Arbitrage is a trading tool most commonly used in the binary trading market. More common with financial brokers the method has now crossed into the sports betting world. Sometimes called the sure bet it is basically a way to exploit the differences in prices and cover all options. Bookies do a similar thing called laying it off. When it comes to sports betting arbitrage you use more than one bookies odds to bet on all outcomes to ensure a profit. ‘Ensure a profit with sports betting? You must be selling a scam’ you say. No it’s a fact there are professional sports betters that use the technique and make profit. They are called arbiters and they are not the industry’s most favorite people. So how on Earth does arbitrage sports betting work anyway? Well you do the unthinkable and bet on all outcomes. This would be a disaster if you used the same bookie to do that. No you shop around and find the best prices at different books. By exploiting the differences in bookies prices you hedge your bets and guarantee a profit. It doesn’t work with every match up and a lot work goes into it. It sounds like a fairy tale but it is for sure a very real thing and it happens a lot more than you think. In fact for a bookie to make a profit in the long term it is inevitable. It is a side effect of the business one which not that many people exploit.

A Little Mathematics Is Needed – A Lot Really

Let’s explain a bit more. It is easier to explain with a game that only has two outcomes. Basketball, American football, ice hockey and tennis all have no tie possible. It can however be applied to anything that has bookies offering odds on an outcome. With the right sums getting done of course. So bookies lay odds depending on how they see the outcome of a match. Not all bookies see the same outcome so give different odds. Also some make mistakes and there is the balancing of a book needed to ensure a profit for the bookies. So this creates a verity of differing odds. With a little (sic) maths you can pick two different books bet on each outcome and make a profit. It’s a lot easier to use decimal odds as opposed to fractional to work out the sums here’s an example:
bets

Bookie A

Bookie B

Team 1 Win

1.25

1.43

Team 2 Win

3.90

2.85

 

This is the boring bit bear with us. For each bookie the sum of the inverse of all results will always be more than 1 that’s the profit margin.

Bookie A 1.25⁻1 + 3.9 ⁻1 = 1.056 and Bookie B 1.43 ⁻1 + 2.85 ⁻1 = 1.05

The bookie A’s return rate is 1 – (1.25*3.9) / (1.25+3.9) = 5.34%

So your profitable arb betting would be you take the odds from Bookie A for a Team 2 win at 3.90.Then you take the odds from Bookie B for a Team 1 win at 1.43. You put a stake of 100 with Bookie B on Team 1 and a stake of 100*1.43/3.9=36.67 with Bookie A on Team 2 you collect 143 whoever wins your stake totals 136.67 so you profit 6.33 (about 4.6%)

1.43⁻1 +3.9⁻1 =0.956

That’s the maths it’s not that complicated but it is easy to make a mistake. Recognizing the odds needed to make an arbitrage sports betting play is another ball game. This is a general look at things but it goes like this

 

Team A Win

Team B Win

1.2

more than 6

1.3

more than 4.33

1.4

more than 3.5

1.5

more than 3

1.6

greater than 2.66

1.7

greater than 2.42

1.8

greater than 2.25

1.9

greater than 2.11

2.0

greater than 2.0

This table will help you spot at a glance whether odds are favourable for an arbitrage play. Then of course you need to do the sums to work out how much to bet on each, then you collect your profit from the bookies.

Is Arbitrage Betting Even Legal?

Yes it is perfectly legal. But just like card counting in a casino if a sports book suspects you are doing it they will probably suspend your account. Why do they let it happen then? Well as mentioned at the beginning bookies don’t always agree on a match up for one thing. The other big thing is balancing their book. For a bookie to be guaranteed a profit they offer odds that level out the field. Their sums will always add up to over 1 which means profit for them. So if one team is getting all of the action thy will make the odds on the other team more attractive to get action on them to balance the book. In an ideal world for the bookie they want to make the same payout on either winner, i.e. less than was staked. This is their balanced book and a profit. Bookies are in the game to make money they are not sports fans they have no interest in offering fair odds. This makes them open to the arb bet. A smart punter using the correct methods can make a profit every time. The profit may not be that big but it is a profit every single time.

Surely It Doesn’t Happen Often?

You would be surprised there are literally thousands of opportunities across the world’s bookies. Most run in at around 4-6% profit but if you do it right there are always a few that can give 10-15% profit. The hardest part is the effort involved. You need to be putting in the hours of searching and the time consuming maths. It is easy to slip up with the sums and very easy to miss the golden opportunity. This is the main reason there are not that many doing it. The profit margin is slight and it requires a large amount of capital. The hours it takes to make it a full time proposition need a chunk of cash. To earn a decent living at a 6% margin you are looking at around €25 000 start up cash. Not everybody’s got that kind of cash. The risk of making a mistake puts a lot of people off the whole idea. You also need a pretty fast stable internet connection. A lot of patience as well because this is no get rich scheme. It takes a lot of dedication, and some long hours crunching the numbers. There are however a quite a few doing it for a living and now there are software services available to work out all of the maths involved. Couple this with alert services which scan the markets for arbitrage sports betting opportunities and some make a good living at it. As it stands there are not hoards of bettors doing this but it is a viable business. The bets are completely legal and if you have enough accounts you can stay under the radar. But get this straight it’s not for the faint hearted a lot of your money is out there working all of the time. A couple of glitches and you can end up broke.

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