Arbitrage betting is one way to try guaranteeing a profit on your sports bets, but it’s not as easy or as safe as it sounds. Let’s take a look at how arbitrage works and whether you have what it takes to play.
How to Do It
When you gamble on a game, different sportsbooks have different spreads and odds. By betting on different outcomes with different sportsbooks, you can almost guarantee that you’ll turn a profit. Arbitrage puts wagers on every possible outcome of a game. If you balance your wagers correctly, you can ensure that you don’t lose. People don’t just use arbitrage in sports betting. Some day traders use arbitrage strategies to try to guarantee returns in securities and currency trading.
Still wondering what exactly is sports arbitrage? Here’s a step-by-step overview:
Find the sportsbooks with the highest odds for each outcome. Find the sportsbooks that place the highest odds for each outcome. Remember, in some sports, win and lose aren’t the only outcomes. Don’t forget the possibility of a draw.
Calculate the individual arbitrage percentage (IAP) for each outcome. Divide one by the decimal odds (European odds), and multiply it the total by 100 (1/odds * 100 = IAP). Do this for both possible outcomes.
Find the total arbitrage percentage (TAP). Add the individual percentages together. If the TAP is less than 100, you have an opportunity for arbitrage.
Compute your potential profit. Multiply the amount that you have for betting by the arbitrage percentage, and then subtract it from the total amount that you’re betting [(bet * arbitrage percentage) – bet = potential profit].
Calculate how much to bet on each outcome. To compute how much to bet on each outcome, multiply your total bet by each outcome’s individual arbitrage percentage, which you computed in Step Two, and then divide by the total arbitrage percentage. The formula is [(bet * IAP) / TAP]. The answers tell you how much to bet on each available outcome.
Although it sounds easy on the surface, arbitrage isn’t as simple as it looks. Make sure you understand both the advantages and disadvantages before you attempt an arbitrage bet.
Because you’ll be placing bets at several different sportsbooks, you’ll have to maintain multiple accounts for betting. If you don’t have a large cash reserve, this strategy could max out your credit cards.
Constant Money Movement
Inevitably, you’re going to end up with a lot of money at one sportsbook and a dribble of money at other sportsbooks. You’re going to have to move your money around to fund your accounts, and this will cost you in terms of bank fees.
Incredibly Fast Changes
Thanks to today’s online sportsbooks, odds can change in an instant. By the moment you’ve researched odds on both outcomes, the odds will have changed on your original outcome. You can pay money to arbitrage services that will claim to send you opportunities for arbitrage. However, you have to act instantly, or the opportunity will pass you by.
Bookmakers take note when people bet with arbitrage patterns, and they often don’t look at it kindly. Your bookmaker might start limiting the spread on your bets or block you from certain betting opportunities. Some bookmakers have even confiscated gamblers’ money.
You can subscribe to expensive arbitrage calculators, or you can do the calculations on your own. When you do calculations on your own, you sacrifice speed, and you also make room for arithmetic errors. In arbitrage, calculation errors can leave you with huge financial losses.
Avoid betting arbitrage with a syndicate that asks you to pay huge amounts of money so that the syndicate can bet on your behalf. In most cases, you’ll never see that money again, or you won’t get the profits that you’re promised. Also, be careful about spending a lot of money on arbitrage software. If it doesn’t work as well as it claims to, you will lose a lot of money.
Finally, some scammers will cold call people inviting them to participate in an arbitrage opportunity. Never give your money to someone who cold calls you, no matter how good they make the opportunity sound. To avoid getting scammed, stick with reputable, trustworthy sportsbooks when attempting an arbitrage bet.