Arbitrage Sports Betting : A Newbies Guide.

Sports betting arbitrage is a way of placing bets on the outcome of sporting events to make a profit irrespective of the results of the event. Sports betting arbitrage involves taking advantage of the differences in the odds that bookmakers offer on different participants.

In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets.

A bookmaker, bookie or turf accountant, is an organization or a person that takes bets and may pay winnings depending upon results and, depending on the nature of the bet, the odds.

Arbitrage bettors, called 'arbitageurs', place their bets on every selection of a sporting event in such a way that ensures them a profit irrespective of who wins. It is termed no risk gambling because of its assured returns. There are different names for sports arbitrage opportunities; all of which refer to the same style of betting. The most popular is 'arbs', while other names are overbrokes, surebets, underrounds, and they all have exactly the same meaning. Sports arbitrage bettors are able to get guaranteed profits by locating the highest odds on each participant and placing their bets with different bookmakers accordingly.

Firstly it is necessary to find at least two different bookies whose prices differ; the difference should be high enough to create an arbitrage opportunity that can provide a big profit margin.

To simplify, you bet on one participant with one bookie and bet on the other with another bookie. The odds offered by each of the bookies should be different and will be the basis to determine the amounts that need to be wagered on each participant to create an arbitrage.

For example in Wimbledon with John McEnroe and Bjorn Borg competing with each other, Bookmaker X offers 1.91 for McEnroe and 2.39 for Borg. Bookmaker Y offers odds 2.2 for McEnroe and 1.72 for Borg. This presents a sports betting arbitrage opportunity to provide guaranteed profits no matter who wins.

Suppose you are prepared to invest $500, what can be a good way to an arb? Take a look at the details below.

On McEnroe – $267.64 with bookie X
On Borg – $232.36 with bookie Y
Total Investment $500

Scenario 1 where McEnroe wins -

Bet on McEnroe – $267.64
McEnroe @ 1.91 with bookie X = 267.64 x 1.91= $511.19
Net Profit = Winnings – Investment = 511.19 – 500 = $11.19

Scenario 2 where Borg wins

Bet on Borg – $232.36
Borg @ 2.20 with bookie Y = 232.36 x 2.20 = $511.19
Net profit = Winnings – Investment = 511.19 – 500 = $11.19

Therefore, it does not matter who wins. The profit is assured.

Arbitrage sport betting although hyped as risk free is however not entirely free of risks. For one, the bookmakers have their odds balanced and if you back both sides with the same bookmaker you are sure to lose. Therefore, arbitrage will occur only when you place your bets with two different bookmakers who for their own reasons offer different odds for the same event.

Then they may shorten their odds after a certain amount has been received against the bets and this will kill your chance of making a profit. Bookmakers also restrict the amount they accept from one person against a selection and even if you would like to put in a bigger amount against your bet, you may not be able to do so.