The Sports Bookie Blog

Sports Arbitrage: Fact or Fiction

February 5th, 2007

Arbitrage betting - no sure fire bankroll!An arbitrage bet potentially exists when contrasting odds occur across different bookmakers, sports books or betting exchanges for a given event or game.

Arbitrage is also referred to as sure bets, scalps, no-risk and risk-free bets.

In theory, in an arbitrage situation, you can guarantee a profit regardless of the game outcome by placing balanced bets across all possible outcomes (e.g. in football,  win, draw, and loss) at the best odds for each outcome.

In practical terms, however, real arbitrage opportunities seldom exist – and certainly not in sufficient quantities and percentages to be viable for professional punters.

If you are prepared to consider lesser (more dodgy) bookmakers you may be able to create an opportunity but the process can be far from “no risk”.

Top numbers man and betting tipster, The Gooner of www.goonersguide.com, considers that there are three main issues that dispel the myth of sports arbitrage. They are voiding, volume and money management.

Voiding
Bookmakers have rules covering themselves for “palpable error”. If they get a price wrong on their web site they can void all bets at that price. So if you take bets to cover the arbitrage that are subsequently voided you’re in trouble as your “no risk” bet has suddenly evaporated. This happens and punters find themselves risking a very large bet on the other legs of the arbitrage!

Volume and Timing
The second big issue with arbitrage is whether you can get enough volume and at the right ratios to get a real arbitrage opportunity.

When a bookie is markedly out-of-step with the market and creates an arbitrage situation, they are likely to take a lot of bets from general punters anyway (ie not just those trying to achieve arbitrage) and as such arbitrage windows are usually closed quickly by natural market forces.

As most arbitrage bets offer just a 1-3% profit (ie the overall difference between the balanced bets across all possible outcomes), in order to make $20 profit you’ll need to have $1000 wagered across the bets. You have to be very sure that all legs of the bet will accept the volumes you want to place in order to make the bet risk free.

Imagine the sinking feeling you’ll get if you’ve placed the $800 on and can’t get the remaining $200 placed to achieve the arbitrage. (For example you might be limited to $20 per punter instead and you no longer can achieve a balanced bet or have a ‘sure win’ situation).

Money Management
Thirdly, in order to profit from arbitrage you need to have active accounts with lots of bookies – maybe as many as 20 to 30 – to be able to identify and take advantage of discrepancies in pricing. Your betting bank (your total funds in all bookmaker accounts) needs to be spread across these bookmaker accounts in order to allow a quick response.

You also need to be able to move your available funds across each of your betting accounts quickly and without losing value. Remember that some e-wallets and many online bookmakers will charge you either a fixed fee and or a percentage each time you make a withdrawal. It is common practice for bookmakers to limit you to one free withdrawal per month.

With 20 active bookie accounts you potentially need $10K in your betting fund spread across your bookies in order to place $1000 arbitrage bets. If it is a 2% arbitrage on offer – that means just $20 profit. In our view if you’ve $10K tied up, you’d be better off just putting it in the bank!

Arbitrage is a notion that sells books and subscriptions to web sites supposedly listing arbitrage opportunities. The size and scope of the arbitrage is generally so small that these opportunities can disappear literally within minutes.

Where Arbitrage can give great value – the free bet !
When a bookie runs a promotional offer or free bet you sometimes can get value from arbitrage bets. You can lock down one leg of the bet (the free bet or cash back deal) and all you’re really looking to do is to place contrasting bets to get close to 100% stake return, no matter what result. Pocketing the promotional offer or free bet is your objective.

A memorable 2006 example saw an aggressive and relatively new sports book offering a $1000 cash back deal on an NFL football game. By taking the bet with them and placing a ½ sized bet on the opposition at another bookie, punters were guaranteed to pocket a $500 overall profit regardless of the game outcome.

We certainly took advantage of this deal along with many other bettors who grabbed at the opportunity. The only complaints we heard were from bettors who were not geared up with multiple bookie accounts or had slow payment methods and so were not able to get in before the offer was over subscribed!

Other Sports Betting Terms Explained:
>>Overround
>>Fixed Odds Betting
>>Asian Handicap Betting
>>Spread Betting

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