The age-old battle between punters and bookmakers has seen many strategies and tactics rise and fall, with some of them becoming obsolete, while others continue to be successful.
One of the most interesting strategies that some sports punters employ is sports arbitrage betting. The aim of this strategy is to ensure a profit, whatever the outcome of a sports event; a situation that most punters would agree is almost the ideal! It is also the basis of how bookmakers themselves operate.
How does sports arbitrage betting work?
Sports arbitrage betting is all about spotting small differences in the odds offered by different bookmakers and then exploiting them. The idea is to build up a position that ensures you will profit in all eventualities.
This is done by comparing the prices on an event across the full range of available sportsbooks. By turning these prices into percentages, it is possible to identify opportunities when the total implied probabilities in a market add up to less than 100%.
A sportsbook will aim to ensure that the implied probabilities of all the contenders in a betting market add up to more than 100%. This means that in the long term, they will make a profit whatever the outcome. A typical bookmaker’s market on a horse race for example might look like this:
- Horse A Evens 50%
- Horse B 3/1 25%
- Horse C 4/1 20%
- Horse D 4/1 20%
Adding up the implied probabilities in the right-hand column gives us 115%. This market, then, has a 15% ‘overround’ which is effectively the bookmaker’s profit margin.
But just as an overround market is in the bookmaker’s favour, an ‘under-round’ market, in which all the implied probabilities add up to less than 100%, is in the punters’ favour. Now obviously, no single bookmaker is going to offer an under-round market. But by picking from the prices available at several bookmakers, it is possible for the shrewd sports betting punter to create their own under-round. This is sports arbitrage betting.
Sports arbitrage betting in practice
To keep things simple, let’s imagine a typical basketball game in the NBA, in which there are only two possible outcomes. Checking out the markets, you see that two bookmakers are offering these prices:
- LA Lakers 5/6
- LA Clippers 11/10
- LA Lakers 8/11
- LA Clippers 6/4
In this case, if you were bet on LA Lakers at 5/6 with Bookmaker A, and LA Clippers at 6/4 with Bookmaker B, the combined implied probabilities would add up to 94.54%. This means you have effectively created your own under-round and by structuring your bet carefully, you will stand to profit whichever team wins.
Is sports arbitrage betting legal?
Some punters who are considering trying sports arbitrage betting may be concerned that this form of betting is illegal. After all, it feels unusual to be in a situation where you have an advantage over the bookmaker.
The good news is that there is no law against sports arbitrage betting. It is entirely legal to place a bet with one bookmaker and another, complimentary bet with another. Operating in a shrewd fashion that enables you to turn small margins in your favour is essentially the principle of bookmaking. Of course, just because sports arbitrage betting is legal, that doesn’t mean it is encouraged by bookmakers.
Can you get banned for arbitrage betting?
The short answer is yes, you can. As explained above, sports arbitrage betting is not illegal. You won’t face any criminal or civil sanction for doing it.
Sportsbooks, however, do not like arbitrage betting, or ‘arbers’ as they call those who bet in this way. You will find that most bookmakers will have a clause in their terms and conditions through which they reserve the right to close your account if you engage in sports arbitrage. There is no doubt that you can be banned since bookmakers are private entities that are not obliged to take your custom.
Many punters feel that this is unfair and that this is one of the areas in which bookmakers are seeking to obtain an unfair advantage. There may be some truth to that, but as it stands right now, in most betting jurisdictions in the world, sports arbitrage betting can get you banned.
Sports arbitrage betting and the betting exchanges
The arrival of the betting exchanges (Betfair is one of the UK’s most popular) has increased the options for punters looking to carry out a sports arbitrage betting strategy. With a betting exchange, you can back for and against any selection in a particular market, giving you more choice and flexibility when it comes to creating your under-round.
Sports arbitrage betting is not as easy as it once was. Bookmakers are much quicker to ban those who use this strategy and they are also more careful to ensure their prices are not too far out of line with the market. But for those who are prepared to be patient and who can move quickly when they’ve found the opportunity, sports arbitrage betting remains a useful sports betting option.