When the thrill of regular betting has gone, you have turned from punter to serious sports investor, and you
would like to spend your weekends glued to a computer screen working on something really fiendishly difficult
but possibly terribly lucrative, then, dear friend, it is time to give arbitrage a go. Arbitrage, you say, yes...
I heard about that from my mate in Yorkshire.
Yes, for some reason arbitrage betting is particularly popular in Yorkshire, but it is not a game limited to that
area. Any serious sports investor can take it up, and many are tempted. Arbitrage is theoretically risk-free,
after all. To work this system, every possible outcome of an event is bet upon, such that a known percentage of
profit can be made regardless of the outcome of the event. While in the past bookmakers frowned on arbitrage and
sought to prevent it by cancelling bets, refusing to take certain bets, or even to ban players,
the rise of online betting exchanges has created the kind of differentiated marketplace where arbitrage is now
more readily available. Bookmakers have somewhat come to terms with arbitrage in the marketplace and as long as
the bets are spread between different bookmakers (i.e., all your for bets at some online site and all your lay
bets with the pub bookie) they are limited in their abilities to stop arbitrage.
By hedging all possible outcomes of an event and taking advantage of different bookmakers’ slight differences in
odds, profit through arbitrage is possible. However, keeping abreast of the fluctuating odds and possibilities
across the different markets available can be a full-time job. Also, given that the typical arbitrage profit
potential is around 2% (although it can get all the way to 20% on some events), volume is also a key part of a
successful career in arbitrage. In Britain, this has played out in the marketplace with professional “arbers”
stationed firmly in front of computers at home while “key men” in their employ place bets on their behalf.
The computer based arbiters are essential, as the math for arbitrage can be rather (horribly) complicated. As the
margins are small, screwing it up can mean the difference between profit and loss. Fortunately, there are many
online tools that one can download for arbitrage calculations. With practice, given the theoretically risk-free
nature of arbitrage profits, the serious sports investor could make a good living at it, but good organization,
market awareness, and sound mathematical calculations will be key for one taking this path.
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