Arbitrage betting is often referred to as the smartest way to place bets, given that it results in guaranteed profits. However, arbitrage betting is also complicated, and demands a great deal of patience and skill. The sharpest betting enthusiasts will spend a great deal of time and dedication looking for arbitrage opportunities, and pounce on them when they are identified.
But identifying the opportunities is the most difficult part of the strategy. Only the keenest and most dedicated will spot them, which is what makes proper arbitrage betting generally only a part of the best betting enthusiast’s arsenal.
Spotting the Opportunities
The core of arbitrage betting is, first and foremost, the act of spotting inefficiencies, or mistakes, in the world of bookmakers. Given that being a bookmaker is not what can be referred to as an exact science, it leaves room for smart bets to be placed that exploit a fault.
The biggest inefficiencies exist in bookmakers assigning incorrect odds to the same event. The reason for these tiny mistakes is, of course, simple human error. Though in the case of the bookmaker making an enormous mistake, the line of betting will generally be cancelled, and any bets made will be void. Bookmakers reserve the right to do so, and it certainly shouldn’t be held against them.
How It Works
Those who are familiar with hedge betting will know that the idea is to place two different bets, at a two different times. As odds change, hedge bets can be made to maximise winning potential, and minimise risk.
Arbitrage betting, however, relies on betting on every possible outcome, based on the same odds at one time. The idea is immediately confusing to many prospective bettors, but the science behind it is solid, and works if done properly.
Spotting an arbitrage opportunity is as easy as spotting bad maths. If, for example, when the positive odds are higher than the negative odds assigned. Or when the probability of two assigned outcomes adds up to less than 100%.
A simple example is positive odds being 102, and the opposite negative results being 101. Of course, it general won’t be as easy as that in the real world.
An easy example to understand would be as follows. The Penguins are listed at sportsbook A available online with a money line of +110. The opposing team, the Capitals, are listed at sportsbook B also with a money line of +110. This means that a $100 bet could be placed on both teams to win. The result would be that, regardless of which team wins, you would have a guaranteed outcome of $10.
This example rarely, if ever, happens. In most cases it is a +1 discrepancy, meaning that only $1 would be guaranteed. A huge amount would have to be staked in order to make the arbitrage be truly worthwhile. Plus, given how difficult it is to spot these opportunities in the real world, few even bother to pursue them. Not in the least because some sportsbooks will even ban arbitrage bettors.