Playing Bookmakers Against Each Other: The Betting Arbitrage
Image a system where you always win, regardless of what you are punting on. Whether it is a horse race in Sydney, a soccer game in England or a boxing match half a world away, this is very much a possibility. While every single event may not work, most of the time the savvy punter that researches his or her punts will find that they can successfully complete a betting arbitrage on many different events and take full advantage of different punting sites fighting for a punter’s business.
What is a Betting Arbitrage?
A betting arbitrage is a betting system that involves finding events to punt on where different bookmakers have differing opinions of what the odds should be for that event. An optimal betting arbitrage would involve either a mistake or simply a completely different opinion of who is favoured to win. When these situations are found, punts are placed with the different betting companies and a profit is guaranteed.
A typical betting arbitrage requires a large amount of money to make decent returns, however, there are many people that use betting arbitrage rules with smaller amounts of money. When done in this conservative manner, it is typically called a betting investment. Arbitrage returns can range from less than a two percent profit to over twenty percent profit depending on the event.
Classic Betting Arbitrage Example:
The most simple betting arbitrage is where there are only two possible outcomes. Two rugby teams play, two tennis players play a match, etc. When there are different and largely disparaging odds, then there is room for a betting arbitrage. For our rugby teams the odds that are given by Bookmaker one are: Team one to win: 1.25, Team two to win 3.9. Bookmaker two offers 1.43 or 2.85 to win. The bigger the disparity between the payouts, the better profit the arbitrage will give.
The way this betting arbitrage works, is that the arbitrage playing punter will place, for example, an one-hundred dollar punt with bookmaker two for team one to win at 1.43 odds. Should this win, the punter would receive 143 dollars. For bookmaker one, they place a punt for team two to win that will net that same winning amount. For this case, the punter would place a punt for $36.67. The calculation for the punt for the higher odds is to take the return for a win from the first punt and divide it by the odds of the second punt that will be placed. When all is said and done, the punter has spent 136.67 on punts and has won 143. The return is a mere $6.33 or 4.6 percent; hence why most betting arbitrages are done on a larger scale than a simple one hundred dollar and corresponding punt.
Variations on typical Betting Arbitrage:
The betting exchanges that are out there have changed betting arbitrages a bit. Many people can find better odds through individuals that offer odds for a limited number of punters and for a limited amount of capital. Because there is more opportunity to find differing odds, this type of betting arbitrage has picked up. The typical Aussie betting exchange requires betting arbitrages to work on a smaller level; while reinvesting winnings again and again to build a snowball effect.
The other variation on arbitrages is to use the betting arbitrage as a way to quickly use bonus cash that most sports punting sites give new punters. By building arbitrages on a couple punts on two separate sites, the money from each site becomes money that the punter can then request to be deposited into their bank account. Between two sites, even a break-even scenario still affords the punter the opportunity to make money off the bonus or deposit matched money these sites offer.
Betting Arbitrage Risks:
Betting arbitrages do have risk. The biggest of which is a punter making errors. Whether it is a math error or an error in filling out a betting card, this is a possibility that must be taken into consideration. The more possibilities to the betting arbitrage a punter is attempting, the bigger likelihood for an error.
The biggest risk, however to the punter that routinely does betting arbitrages is the risk of a bet being cancelled by the bookmaker. Australian law allows bookmakers to cancel punts if they can prove that a true mistake was made and if a bet is cancelled, the betting arbitrage is destroyed for that particular set of punts. Instead of having a hedge and more, the punter is then stuck with a punt on one outcome and not the other. While this could lead to a bigger profit, it also exposes the punter to an actual loss as well.
Conclusion:
The betting arbitrage is become less and less common as the online punting sites use software to scan the competing sites to prevent arbitrages. Because of this, the savvy punter has to look harder and harder to find sites that do offer competing odds that can make arbitrages work. There is nothing illeagal about betting arbitrages but there are no laws in Australia preventing companies from trying to prevent people from attempting them. The reality is that competitive sites are going to offer similar odds and the software is designed to prevent betting arbitrages as well as simply loosing customers to other competing sites.