a US 1.5 – bet $800, return $2,000).
A Bet You ALWAYS Win – How Sports Betting Arbitrage Works
by: Kevin Schultz
Betting arbitrage is a method of creating a bet that has a zero risk – in other words, you always win! The concept of ‘arbitrage’ comes from the financial world, and describes the activities of traders who find two different places offering the same trade, but at different prices. As you recall, it was close. No one knew for sure which way it would go. Simply exploit the difference. For example, in a boxing match, the US champ will, of course be favored by the US bookies, but the UK challenger will be top bet at the UK bookies. But what you could have done is put on a bet with UK bookie Coral that Kerry would win, and the odds they would give you would have been 6/4 (i.e. The main problem is the size of the account you need to make a useful profit. Usually the difference will be small. Sometimes, the differences are deliberate. By exploiting the inefficiencies of some brokers, a win can therefore be guaranteed. Nothing wrong with that, you think? Not if the bet is 100% guaranteed? But what about if thru the vagaries of the internet, you manage to get one side of the bet on at the right odds, but not the other? You are left holding a LARGE position. They then exploit this difference by selling in one location and buying in the other. Also, accounts of this size are viewed with some suspicion by the bookies – they will want to know that you aren’t (for example) money laundering.
At the same time, your fave US bookie might have given you odds of 6/4 on Bush! That means if you took both bets, you are betting (risking) $1,600, but will win $2,000 WHATEVER the result! Easy money or what? Bank a cool $400 for nothing.
So ok, you know the risks, but how does it actually work? Let’s go back to the US election between Bush and that Herman Munster guy, the Democrat fella with the long face (Kerry? Curry?). Whatever happens to price, they make a profit on the difference between the original 2 prices. Each online betting site has to maintain it’s own ‘book’, and it would be a strange world indeed if they all had the same number of punters, all betting the same way and the same amount, meaning they all had to offer the same odds! . That is why you need large accounts.
The advent of online betting sites meant that the punter could suddenly check prices at a multitude of different locations very quickly, and open bets at those that had ‘slipped’ out of line. It works even within the US too – a Varsity football match, for example, may find the out of state team offering you an opportunity to arbitrage within the home team state depending on the demographics of the customers using two US online bookies.
Mr Schultz is a writer for www.supabets.com bet site an archive of free tips and trix for betting fans, where he concentrates on sports betting rules.
This article was posted on February 10, 2005
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Generally, you can bet risk free on any sporting event with either 2 or 3 outcomes, such as Football, Baseball, Boxing, Basketball, Tennis, Soccer, Golf, Snooker, Cricket, Hockey, Ice Hockey and Darts. Are the odds always as good as in the example? No. The same thing applies to betting arbitrage, typically on sporting events. The difference between the odds offered by 2 bookies, and exploited by an arbitrageur, may only amount to a fraction of a percent, meaning that you may have to wager several thousand dollars to win 5 bucks. So how does 100% winners, no risk sound? Groovy, huh? But there are, of course, problems.
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How often does this happen? Quite a lot