Sports Betting and Arbitrage

One of the strategies frequently used in sports betting is arbitrage betting. Arbitrage betting means using different odds that are offered by different bookmakers in order to maximise the chances of making a profit. Sometimes it is possible to achieve a risk free arbitrage system where it is impossible to lose assuming that the event takes place as planned. There is always the chance that the event will change after bets have been placed, for instance a horse might be withdrawn, and this could throw the whole arbitrage strategy into chaos.

In an arbitrage strategy you will bet on every possible outcome of an event in such a way that whatever the outcome you will make a small profit. Because the profits are very small, the capital bet must be very large to make a reasonable income. As the income is in fact a very small return on investment, care need to be taken that the very small percentage profits are net eaten up in fees relating to currency transfers and money handling fees and commissions.

Here is an example of how arbitrage betting might work. Imagine a simple example concerning the outcome of a football game, Liverpool versus Chelsea.

Bookmaker One is offering 5/4 Liverpool, 11/4 Chelsea

Bookmaker Two is offering 11/8 Liverpool, 5/2 Chelsea

If you bet £100 on Liverpool at Bookmaker 1 and £63.28 on Chelsea with Bookmaker 2 you would make a nice little profit of just over £74.00 whatever the outcome.

Calculating arbitrage opportunities in real life is surprisingly complex. There are a number of approaches. If you have a reasonable amount of skills with spreadsheets then it is quite possible to create your own arbitrage calculator for say horseracing with excel. There are also arbitrage calculators that can be downloaded from the web, but some of these can be very limited so you should try them out before you but them if possible.

A cautionary word to finish: Because on the surface arbitrage betting looks like a sure fire winner, and indeed it can be if one is careful, it is used in lots of internet scams and get-rich-quick schemes. The important thing is to ensure that you understand exactly what you are doing and the risks you are taking before betting any real money.

One of the strategies frequently used in sports betting is arbitrage betting. Arbitrage betting means using different odds that are offered by different bookmakers in order to maximise the chances of making a profit. Sometimes it is possible to achieve a risk free arbitrage system where it is impossible to lose assuming that the event takes place as planned. There is always the chance that the event will change after bets have been placed, for instance a horse might be withdrawn, and this could throw the whole arbitrage strategy into chaos.