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5 Minute Guide to Sports Arbitrage
5 Minute Guide To Sports Arbitrage – The Internet Loophole That Can Make You Money
by Tukshad Engineer
Every now and again the Internet throws up some real loopholes. One in
particular stands out, and if you’re interested in making some fast
pocket money then you should check out the concept of sports arbitrage
(ed. note: also called "arbitrage sports betting" and "arbitrage sports trading") in more detail.
Imagine being able to bet on both sides of a sporting
event--so that no matter what the result you walk away with a
guaranteed profit. Well that’s exactly what arbitrage betting is about--and thanks to the hundreds of bookmakers that continue to offer
online services this arbitrage loophole is growing with more and more
opportunities to claim guaranteed cash every day.
The best thing is that it’s completely legal, simple to do and once you start chances are you’ll get hooked with the guaranteed and fast money that’s there for
the take.
Before you get too excited lets take a moment to
understand the mechanics behind arbitrage--an age old concept that has
been used by banks and businesses for centuries. Arbitrage simply is an
inconsistency in the market--where for example due to global
differences the same product or service is charged at different prices
in different locations.
How is this applied to sports betting? An
arbitrage opportunity is formed when different bookies have different
prices for different outcomes in a particular sporting event. The
bottom line is that we can place bets to cover both (all) outcomes with
different bookmakers and get back more than we invested each and every
time.
It’s important to remember that this is a form of investment and
not betting--with arbitrage you know your exact return before a ball
is kicked or a stroke played. It’s also important to remember that
arbitrage returns are generally low--on average yielding 5% to 10% per
play--but for an investment that lasts for a couple of hours, that’s
pretty good.
An Example
Let’s take a look at a real life
example of sports arbitrage. During a ladies single tennis match at Wimbledon
between Davenport and Clijsters the bookies Tote and Victor Chandler
priced the outcomes differently:
To return £100 with Victor Chandler above we would have to invest £71.42. To return £100 with Tote for a Clijsters win we would have to invest
£25. Our total collective investment would be just £96.42--and whoever
won the game our total return would be £100. We have just made a
guaranteed 3.58% on your money within 2 hours. You can find plenty of
these arbitrage opportunities each and every week.
How did we calculate how much investment is required to return £100 (including our stake)? We do a very simple calculation:
1. With V.C. the odds for a Davenport win was 2/9. To find out how much
you need to invest to return £100 simply make the following
calculation:
2. With Tote the odds for a Clijsters win was 3/1. To return £100 (including our stake):
Total Investment (£71.43 + £25) = £96.42
Total Return REGARDLESS OF OUTCOME £100
Total Profit (£100 - £96.42) = £3.58 risk free.
Do you see the beauty of this? No matter who won the game you are
guaranteed a certain profit of 3.58%--this is a very good return for
an investment lasting just a couple of hours that carries absolutely
zero risk. The good news is that arbitrage opportunities like these
happen many times on a daily basis, and with a little practice you can
find quite a few to invest in as you please.
Why Do Arbitrage Opportunities Occur?
Arbitrage opportunities occur when there are differences of opinion on a
particular sporting event between two or more bookmakers.
Remember that thanks to globalization and the Internet you can use an online
bookmaker who is based anywhere in the world. There are many reasons
why bookmakers may offer wildly different odds on the same sporting
event. For a start, many bookmakers overstretch themselves when
offering odds--they try and cover every possible market to get as many
customers as possible.
This is great news for us because in doing
so they will sometimes offer odds on events that they have little or no
expert knowledge in. For example, a bookmaker in the USA may know very
little about English Division 2 football games, and yet offer odds on
them. In contrast, an English bookmaker will be much more “clued up” as
to the likely outcomes from the same games.
The result? Wildly different odds on the same games, and a feast of arbitrage
opportunities and free money for us. And remember, every day more and
more online bookmakers are entering the highly lucrative online
gambling market--this is great news for us because the number of juicy
arbitrage opportunities will grow well into the future! Also,
bookmakers are busy people--and when they are forced to offer odds in
pressurized situations they can sometimes make mistakes! Again--leading to a nice stream of easy arbitrage pickings.
How To Start Earning From Sports Arbitrage
Now we have a firm understanding of how arbitrage works and what causes
them we're going to see how best to spot them, and how to organise your
time for maximum efficiency.
As an arbitrage trader it's vital that you construct a daily checklist of events that you wish to investigate. It's very handy to buy a diary specifically for your
arbitrage trades and jot down the specific events you'll be hunting for
arbitrages in. Make this a routine--for instance, perhaps on a
particular Saturday you want to check the English football Premiership
fixtures, the tennis fixtures and the one day cricket series between
India and England. Do not randomly hunt for arbitrage opportunities
without a system firmly in place.
Now that you've identified the list of events you're going to attack today, what do you do next? Let's start with the tennis fixtures between player A & player B in the below example. We will see how to go about organising ourselves to see
if an arbitrage opportunity exists:
Example
You find out that the odds for Player A are as below:
And for player B…
Here it's obvious that the best 2 prices are 2/5 for player A (W. Hill) and
3/1 for player B (Eurobet). Does an arbitrage opportunity exist here?
Yes:
To return a total of say £1000 on player A with W. Hill we need to invest (2/5+1 = 1.4...then £1000/1.4) £714.28
To return a total of £1000 on player B with Eurobet we need to invest (3/1+1 = 4...then £1000/4) £250
Our total investment to return £1000 whichever player wins is just £964.
This is a clear arbitrage opportunity and you would then place £714.28
with W.Hill on player A and a further £250 with Eurobet on player B. At
the end of the match you will pick up a certain profit of £35.72.
Finding just three arbitrage opportunities a day of this kind (very
achievable) will give you a daily profit of £107.16 -- and a tax free
monthly income of over £3000.
The traditional way to approach
sports arbitrage trading is to have a daily list of sporting events and
work through them one by one. If you take this systematic approach
with each sporting event you have on your checklist your chances of
finding an arbitrage are very good.
If you would like to learn more, you can discover a step to step guide of arbitrage trading and a list of daily arbitrage opportunities at www.freemoneyeveryday.com. For more free education you can also try www.my-online-powerpack.com which goes into sports arbitrage methods in more detail.
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Note from Steve Smith
As a long-time financial investor, I was familiar with the concept of arbitrage. However, I had never heard of sports arbitrage until reading Mr. Engineer's article. I did further research and concluded that this indeed appears to be a legitmate way to make money in sports betting that is risk-free when done correctly. You probably won't get rich, but you can certainly make a nice supplemental income--enough to afford some of the extras you would like to have. If it sounds intriguing (it does to me, and I'm going to try my hand at it), then check out one of the sites mentioned above, Free Money Every Day or the Online Power Pack.
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Sports Arbitrage Information
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Free Money Every Day
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Recommended Online Betting Services
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Totesport
Bet on tennis and other sporting events from the comfort of home or office! Just sign up with Totesport.
Sports Betting
Here's another option to check out if betting on sports is something you're eager to try (whether in conjunction with sports arbitrage or not).
Does a career in tennis appeal to you? The jobs are out there. And we know of a couple of job services that specialize in finding them for you. Click for more.
