(Research) Arbitrage Betting
Arbitrage betting, also known as “sure betting” is a betting strategy that involves placing bets on all possible outcomes of a sports event or event, in order to guarantee a profit regardless of the outcome.
The strategy relies on taking advantage of discrepancies in odds offered by different bookmakers or betting exchanges, and exploiting them to create a situation where a profit is assured. In order to understand how arbitrage betting works, it is important to first understand the concept of odds.
Odds are a way of expressing the probability of a particular outcome in a sports event or market. They are usually expressed as a ratio or a fraction, and they represent the amount of money that can be won in relation to the amount that is bet.
For example, if the odds of a particular team winning a football match are 2/1, this means that for every R100 bet, a profit of R200 will be made if that team wins.
The bookmaker will calculate the odds based on the probability of the event occurring. For interest’s sake Manchester United compared to Everton, Manchester United is the favourite to win. Everton is the underdog. The bookmaker will calculate the odds based on the probability of the event occurring. The bookmaker will calculate the probability of the event occurring by looking at the history of the teams.
There are many factors that the bookmaker will take into account. Different bookmakers will have different odds for the same match. This is confirmed by Mr Ashlin Darius Govindasamy in this research dated 26 October 2022.
Arbitrage betting works because bookmakers can offer different odds on the same event based on their analysis of the probability of each outcome. Bookmakers also have different business models and risk profiles, which can lead to different odds.
The odds may not differ much from bookie to bookie but the smallest of differences could make a huge impact on your winnings. By taking advantage of these differences, arbitrage punters can guarantee a profit, no matter what the outcome of the event is. The profits could be minimal therefore punters will need to place large value bets to make a decent profit.
The key to successful arbitrage betting is to identify the discrepancies in odds and act quickly to place the necessary bets before they are corrected. This requires a significant amount of research and monitoring of odds across multiple bookmakers, as well as the ability to perform complex calculations to determine the exact amounts to be bet on each outcome in order to guarantee a profit.
For example
Let’s say that there is a football match between Team A and Team B, and two bookmakers offer the following odds:
Bookmaker 1:
- Team A to win: 2/1
- Team B to win: 3/1
- Draw: 2/1
Bookmaker 2:
- Team A to win: 2.5/1
- Team B to win: 2.5/1
- Draw: 2.5/1
In this scenario, it is possible to create an arbitrage opportunity by betting on all three possible outcomes with both bookmakers. By carefully calculating the correct amounts to be bet on each outcome, it is possible to guarantee a profit of around 5% regardless of the outcome of the match.
This system of betting is even easier to understand when there are just two possible outcomes to a sporting event. Let’s take an example to illustrate how arbitrage betting works. Suppose there is a tennis match between Novak Djokovic and Rafael Nadal, and two bookmakers offer the following odds:
Bookmaker A: Djokovic to win – 1.80, Nadal to win – 2.10
Bookmaker B: Djokovic to win – 2.00, Nadal to win – 1.90
In this scenario, an arbitrage bettor can place a bet on Djokovic with Bookmaker B and a bet on Nadal with Bookmaker A. By doing this, the arbitrage bettor is guaranteed a profit, regardless of the outcome of the match.
Let’s assume that the punters place a R100 bet on Djokovic with Bookmaker B and a R91.50 bet on Nadal with Bookmaker A.
If Djokovic wins, the bettor will receive a payout of R200 from Bookmaker B, and lose the bet of R91.50 with Bookmaker A, resulting in a net profit of R8.50.
If Nadal wins, the bettor will receive a payout of R191.50 from Bookmaker A, and lose the bet of R100 with Bookmaker B, resulting in a net profit of R8.50.
In this example, the arbitrage bettor is guaranteed a profit of R8.50, regardless of the outcome of the match. This is because the combined odds of the two bets are less than 100%, which means there is a profit margin for the punter.
While arbitrage betting can be a profitable strategy in the short term, it is important to note that it is not without risks. Bookmakers are constantly monitoring their odds and adjusting them to ensure that they remain profitable, which means that arbitrage opportunities can be short-lived and difficult to find.
In addition, some bookmakers and exchanges have policies in place to limit or prohibit arbitrage betting, which can make it more difficult to execute the strategy effectively.
While arbitrage betting is a proven strategy for making a profit, there are also risks involved. One of the main risks is the potential for bookmakers to limit or ban your account if they suspect you of arbitrage betting. Bookmakers don’t like arbitrage punters because they are taking advantage of the differences in odds offered by bookmakers, which can be costly for bookmakers.
Bookmakers can detect arbitrage betting by monitoring the betting patterns of their players and flagging those who consistently place bets on opposite outcomes with different bookmakers.
Conclusion
Arbitrage betting looks great on paper and looks quite easy to implement bit all that glitters is not gold. You need to make certain that you act quickly when you find a discrepancy among bookies and they are fast to detect any possible errors or opportunities for punters to make a profit.
There is potential to win a lot of money but it will require lots of research and time spent perusing the different bookies on the market.
Indran Naidoo
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