Arbitrage betting has, in the last decade or so, reached a level of prominence which would have been unheard of in the days before the internet. Without reference to sports betting, the practice of arbitrage is the science of finding two sets of odds on the same event which will result in a guaranteed profit if the correct amounts of money are placed.
Arbitrage betting can of course be practised on any market in which there are at least two or more bookmakers offering the required range of odds. Our focus is of course sport but the financial and currency markets are areas in which arbitrage betting can also be used.
Here’s an example of a recent successful arbitrage bet:
The person betting had a total of £1000 to invest and placed the following amounts on a French volleyball match:
Montpellier to win – 11/4 with Stan James £278 placed would return £1,042.50 Stade Poitevin to win – 11/25 with Bet365 £722 placed would return £1.042.57
Now it’s pretty obvious that, using this example, the person betting would walk away with a profit of either £42.50 or £42.57 (just over 4.2%). That’s it, a tax free profit for watching the markets and calculating the correct amount of money to lay. This is the point at which it becomes more complicated. Out of the millions of odds available out there, how does the discerning arbitrage gambler pick out the ones which offer the guaranteed profit?
The reason it’s now possible is of course the power of the internet, or more specifically computer software which can trawl the online bookmakers to find the arbitrage opportunities for you. The software will then calculate the correct amount of money needed to be laid.
So there must be some drawbacks right? Well yes – the bookmakers obviously don’t like it and have sophisticated software themselves to spot customers accounts who may be engaged in arbitrage. It’s not illegal but there’s no compulsion for the bookies to take your bets either.
Another drawback is that you will need a pretty hefty bankroll to begin with; in the example above it costs £1000 to make £42. You will also need a large number of bookies accounts and different credit cards so get your accounting and spreadsheet skills up to scratch. Lastly, odds change all the time so when the arbitrage software finds an opportunity you need to act quickly – lay the money a few seconds late and you could face a loss rather than a profit.