It's Not Gambling If You Can't Lose

JDStarred Page By JD, 28th Jul 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/11pvwdyl/
Posted in Wikinut>Gambling>Sports Betting>Betting Tips

Do you know that it's possible to place bets, on a sporting event, in such a way that it will be profitable regardless of the event's outcome? This is a brief guide to how and why it's possible.

What is sportsbook arbitrage?

Sportsbook arbitrage (also called sure bets, punting, scalping and arb) is simply taking advantage of price discrepancies between different sports books. An arbitrage situation arises when two different sports books have such a discrepancy in their odds that bets can be placed on all possible outcomes of the event and you profit regardless of that outcome. Obviously you will lose one of the bets and win the other, but if you place your bets correctly your earnings from the winning bet will be greater than your loss from the losing bet.

Why do arbitrage opportunities exist?

In order to understand why these opportunities exist, you must first understand how sportsbooks earn their money. Sportsbooks build a commission for themselves into each bet. This commission is called vigorish, but is more commonly called “vig” or “juice”. The sports book is not looking to profit from the outcome of the event. They simply earn their profit from the vig. The simplest example of this is American Football. Typically when betting on an American Football game you will win $100 for each $110 you bet. Let’s say Atlanta is playing Chicago this Sunday. I bet $110 on Atlanta and Anne bets $110 on Chicago, so the sports book collects $220. Atlanta wins and I am paid $210 (my $110 bet + $100 winnings). The sports book has paid me with Anne’s money and kept a $10 commission for themselves. In order for this to work the sportsbook must have the same amount of money bet on each side. If more money is being bet on one team the sports book will adjust the point spread to steer bettors to the other team. The sportsbooks themselves are using arbitrage.

When a sportsbook adjusts their lines to steer bettors, arbitrage opportunities occur. One of the most common reasons arb opportunities exist is due to regional bias. If there is a boxing match between a U.S. fighter and a European fighter the U.S. sportsbooks will have more bets for the U.S. fighter. The European sportsbooks will have more bets for the European fighter. As a result the U.S. sportsbook will give better odds to the European fighter to steer bettors that way and the European sports books will steer bettors to the U.S. fighter by giving him better odds.

How do I find and take advantage of arbitrage opportunities?

It is very difficult to find arbitrage opportunities on your own. You must be a very fast ready and have exceptional math skills. If you really want to find and exploit arbitrage opportunities there are a couple of tools you’ll need to do so.

The first tool you’ll need is an arb finder or alert service. Many of the services online are scams or are so delayed that they are worthless. When choosing a service look for unbiased reviews of the services. Don’t trust a review on a site that has an affiliate link to the service. Many services offer a free trial period or offer small (less than 1% return) arb opportunities for free. You can use the free trial period or free alerts to evaluate the service.

The second tool you will need is an arb calculator. Most arb finder and arb alert services offer this as part of their service. The calculator simply examines the odds and shows you how much to bet on each outcome. The payout for the underdog winning will be higher than the payout for the favorite, so you will need to bet less on the underdog than the favorite.

It sounds too good to be true. What's the catch?

Since each individual arb opportunity offers a very small return and you will have to spread your money over several different sports books, it does take a significant amount of money to make it worthwhile. Most recommend that you start with no less than $1000. Starting with $500 is feasible though, especially if some of the sportsbooks you use offer a deposit bonus. I started with $200. I made some profit, but it was hardly worthwhile at that level of investment.

If you are in the U.S. you will not be able to make deposits directly to the sportsbooks using your credit card, debit card or checking account. You must use a third party payment processor and may incur fees. The fees will eat into your profit. If you do not properly manage withdrawals and deposits, fees could wipe out any profits you earn.

You must be quick. Arb opportunities usually don’t last very long. They are typically only available for a few minutes. You must submit your bets quickly and simultaneously to avoid line changes before your bets are submitted.

Familiarize yourself with the rules of the sportsbooks you use. Many have a clause saying that if they posted a particular line in error they don’t have to honor that bet. If you see an arb opportunity that seems way to good to be true, avoid it, it is more than likely an error. I personally have never encountered this situation, but it is something you need to watch out for. It’s also important to understand how each sports book handles postponed games or games that are called early. Some may simply cancel all bets while others may automatically place your bet on the rescheduled game or use the score at the time the game was called early.

There are a limited number of arb opportunities available each day. Sports books also place limit on how much you can bet on one event. As a result your profit potential is limited. I have yet to reach the limit, but others suggest that limit is between $40K and $50K a year.

Tags

Scalping, Sports Arbitrage, Sports Book Arbitrage, Sportsbook Arbitrage, Sportsbook Betting, Sure Bets, Surebets

Meet the author

author avatar JD
I am a single father of two children. For the past several years I have worked from my home. I have worked as an employee, an independent contractor and as a home based business owner. I currently operate a home based medical billing company, a home ...(more)

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Comments

author avatar Anegar
28th Jul 2010 (#)

love this article. so the bears should have won that. but unfortunately jay cutler threw to the wrong team. i think anne would've bet on the cowboys vs atlanta, and well we all know the cowboys would've won anne a lot of money in that scenario! gr8 article never the less.

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author avatar smoothoperator
3rd Aug 2010 (#)

Tried reading. Too hard for me to digest. I wish others enjoy it.

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author avatar JD
3rd Aug 2010 (#)

Thanks for the feedback. Do you have any specific suggestions on how I can make it an easier read or any specific things that are hard to comprehend.

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author avatar Brian
6th Sep 2010 (#)

There are some great arb and matched betting related freebies at http://www.ucantlose.co.uk/1000/fastgrand.html

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author avatar Jess Taylor
8th Sep 2010 (#)

JD...can you recommend an arb finder/ alert service that you trust?

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author avatar Ava Alexander
6th Jan 2011 (#)

Great article, thank you. Your research shows. I know there are arb opportunities when they move the line. But how can you know which way it will move? Also, doesn't paying a service cut into scalped profits too much?

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17th Apr 2011 (#)

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