The world of online sports betting is a funny business, but one of the more popular areas of discussion is arbitrage betting. Arbitrage betting guarantees you to make a profit regardless of the outcome of the event by taking advantage of the different odds set by bookies on each side of the market. In effect, you are beating the bookies at their own game.
Arbitrage betting occurs when a bookie sets the odds too high on an event. By signing up to a sports betting exchange like Betfair you can then lay the outcome of the event so that whatever happens you will make money. Importantly, for this to work, you need to find laying odds that are shorter than the odds for covering the event.
(Laying an event means you are betting against the event happening. For example if I am laying a football team I am betting on them not to win).
Example of Arbitrary Betting
Let's say that we are betting on a horse race, and we wager 10 on horse A to win at 4.0. We then find a sports betting exchange offering laying odds of 3.5 that A will lose and we place a bet of 12.
If our horse wins, we will win 1.5 profit (40 - 38.5). If our horse loses, we will still make 2 profit (12 - 10).
In the above example, regardless of the outcome of the event we will make profit. This is what artbitrage betting, also known as "trading" is all about. It usually requires placing much larger sizes bets than usual in order to make money from the small 2-5% margins. A typical arbitrage bet will be worth 200+ in order to secure any decent amount of profit. Remember however that there is absolutely no risk involved in arbitrage betting since you are guaranteed to win no matter what the outcome is.
Factors to Take into Account in Arbitrage Betting
Firstly, arbitrage betting requires you being able to find a bookie which allows you to lay teams/events. Most conventional sportsbooks don't allow users to do this, however you can sign up to a sports betting exchange such as Betfair which allows you to both lay and back teams and set your own odds.
Arbitrage betting also only works on events with limited outcomes. In greyhound or horse racing, your horse either has to lose or win. In football however, teams can draw, thus arbitrary betting would be almost impossible here.
The best way to make maximum profits from trading is to use odds checking software to find the highest odds covering your team, and the lowest odds for laying them in the exact same markets. Clearly you want to keep the laying odds as low as possible in order to minimize your risk - I generally prefer my laying odds to be between 1 and 3.0. You can use a betting calculator to make things easier when combining cover/lay odds.
Other Types of Sports Arbitrage
There are other forms of sports betting arbitrage in addition to trading which can guarantee you profits in an event.
Bonus sports arbitrage involves taking advantage of the free deposit-bonuses that most sportsbooks offer. With a rolling bonus in the range of $10 - $1,000, you can hedge/back your bets as usual, but since you received the bonus you can afford to take a small loss of 2-5% on your wager. This leads to you cashing out your bonus albeit with a slight loss. Of course there are drawbacks to this type of bonus arbitrage, however if you can find bets with high enough odds than it can be very profitable in the long term, going from sportsbook to sportsbook and taking advantage of the free betting bonuses.
In-play betting arbitrage is another way of making guaranteed profit from events however it does contain more risks and effort. Because the in-play betting odds change as the match or event takes place, you can combine the fixed odds from before the game with the in-play betting odds to make a margin regardless of the outcome. For example, let's say that the favorites Man Utd are 3.0 to win the match vs. Valencia CF. We place a bet of 10, and then during the match Man Utd go 1-0 up. The odds of Valencia winning have now risen to 5.0 because of the fluctuations in the market. By placing a 10 on Valencia winning, we're now guaranteed to make a profit (albeit our profits for Man Utd are now reduced by 10). If Man Utd wins we make 20, and if Valencia wins we make 40. All the outcomes are covered. Obviously, this type of arbitrage betting is much more difficult to predict and requires less mathematical noose, but more depth and analysis
