Also, endearingly referred to as “arbs’, arbitrage opportunities are a great way to assure for yourself a profit from your in sports betting endeavors. As an average or low-gain but exceptionally low-risk betting strategy, arbitrage allows the punter to capitalize on informational discrepancies in the betting market to make profits. In fact, if done well, this method ensures that the punter has a 100% GUARANTEED PROFIT and zero margins for loss! That said, there’s plenty to know about arbitrage before one can know how to use it effectively and where. Let’s start with the basics.
What Is Arbitrage?
In simple business terms, arbitrage is taking advantage of discrepancies in an asset’s price in different markets to turn a profit. When applied to sports betting, the concept is actually pretty similar. When different bookmakers offer different prices on the same outcome of a certain event, then the opportunity to use arbitrage emerges. The key thing to note is different bookmakers. To use this betting strategy, you have to involve at least two bookies and bet on at least two contrary potential outcomes of the same event with each of the bookies.
That’s the key difference between arbitrage and other seemingly similar betting strategies we’ve looked at before, including hedge betting. If looking for a guaranteed profit, all possible outcomes of that event must be covered. If not, you could at least try to cover all the most likely outcomes, which will obviously allow you to use a lower stake BUT introduce risk simultaneously.
How To Use Arbitrage In Betting: STEPS
For the sake of demonstration, we are going to use a simple tennis player-to-win betting scenario. There are only two possible outcomes. That’s because there are no tennis draws, making it very easy to ensure all outcomes from that event are covered.
1) Do good research to find arbitrage opportunities
This is the very first step in this journey and the absolutely crucial one. Researching means looking at different bookmakers to see what prices they offer for the two potential outcomes of the match. For higher profit potential, dedicate time to look at as many bookies as possible.
2) Compare & analyze the odds
In a tennis match between Humbert and Fognini, let’s say you find the following prices:
3) Pick two highest odds from two opposite outcomes
Your two contrary outcomes from this event are Humbert winning or Fognini winning. Pick the two highest odds for each from all different bookies analyzed. In a practical, real-world case, the differences between the bookies’ prices for each player are not likely to be that far apart. That’s because the bookies are all looking at the same info while compiling their odds. Also, they do often compare notes when setting prices.
Nonetheless, it is not uncommon to find a situation where different bookies have a wildly different view on the likely winner of a match like this. That right, there is your chance to capitalize!
4) Lay your bets and reap the reward
What you need to do now is place two bets, one on each of the highest-priced, contrary outcomes from the bookies you’ve analyzed. In our case, our best odds are 2.10 with Bookmaker C for Humbert and 2.09 with Bookmaker C for Fognini. If you were to stake $100 each, you’d get either $210 for a Humbert win or $209 for a Fognini win. Given your total outlay of $200, this would guarantee a profit of either $10 or $9 regardless of the match-winner. And zero loss no matter what happens.
It is easy to see that while we are not making a really huge profit in this case, the possibility of a loss is zero. In sports betting, such is often the case where risk is minimized (or in this case, utterly removed). But.. Should you use a larger total outlay, the bigger the profit you stand to gain from arbitrage betting. Say, for instance, you had $20,000 to stake. Placing $10,000 on each bet would guarantee you a profit of either $1000 or $900 from this match.