The Ultimate Challenge of Arbitrage Betting
The concept of arbitrage betting isn't a new one; an arbitrager ("arber" for short) exploits the relatively rare opportunity when the "buy" price on one market is lower than the "sell" price on a "parallel" market. Much like in the real world market economies, such anomalies seldom last very long and the betting market quickly returns to its usual shape.
"Much like in the real world market economies, such anomalies seldom last very long and the betting market quickly returns to its usual shape"
There is plenty of material on the web that describes the basic mechanics or arbitrage betting: arbitraging means backing all possible outcomes of a book with a negative over-round (overbroke) using stakes that ensure a profit regardless of the outcome. This equals backing a selection at a bookmaker and then laying it at a lower price on a betting exchange, which is often the easiest way to arb.
A number of the authors highlight the risks and problems associated with arbitrage betting. These include stake size limits, unreliable bookmakers, transaction costs and delays, varying terms and conditions at different sportsbooks, and price changes. The good news is every single one of the above risks can be addressed and virtually eliminated.
"The good news is every single one of the above risks can be addressed and virtually eliminated"
If an arber knows where to look for arbs and is prepared to go through the hassle of creating new accounts with the bookmakers who make frequent ricks, the state of things is such that it is possible to make a very decent living from arbing even by UK standards - as to how many such arbers exist I dare not estimate, but presumably not too many.
Whether this situation will prevail is hard to tell, but with so many sportsbooks competing for customers and offering wide range of services, there should always be room for a few shrewdies to earn their cash. The line between nearly-100% books and arbitrage opportunities is very thin.
To make the most out of your arbitraging experience, it is best being selective about which arbs you decide to place. Despite what some arbers would have you believe, there are arbs with very good percentage returns to be found almost every day. The nature of arbitraging implies that it is impossible to lose with a bookmaker in the long run.
Sooner or later, the balance with one or more of the bookmakers used for arbing will grow to a level they will not tolerate. It is best to exploit the existing account to the fullest while the limits aren't there and that means ignoring minor arbs that don't generate much profit and only annoy the bookmaker.
The best arbs occur in an environment where the odds change dramatically over a short period of time, and more often than not a betting exchange is involved. For our purposes, it is safe to assume that, on a saturated betting exchange market, the prices reflect the real probabilities pretty well. Therefore, an arber laying on a betting exchange and backing at a bookie at incorrect prices cannot lose with the bookie in the long run, as he is consistently betting on value.
"a bit of common sense in place of 'brute force' arbitraging will prolong the life of your bookie betting accounts"
Therein lies the catch; if an arber could devise a way to consistently lose with bookmakers and win on betting exchanges, arbitrage would truly become the Holy Grail of betting. Is this an impossible task? My evidence suggest so, but it still pays off to apply sane money management to your arbs, much like one should do with "normal" bets; a bit of common sense in place of "brute force" arbitraging will prolong the life of your bookie betting accounts.
The mechanisms used to track a bettor's performance probably differ from one bookmaker to another, but the following things have been observed to raise suspicion and possibly account for ridiculous stake limits:
- Winning very large sums at long odds
- A large percentage increase of one's balance with the bookmaker
- Winning very large sums at any odds, if the stakes represent a substantial percentage of one's balance
- Several (long odds) wins in a row, especially in obscure sports/leagues (even betting on animals)
- Extremely high ROI (although this is very unlikely)
- Any combination of the above
An alternative to arbing that might prolong your account life is using exceptional arb prices for regular betting. If a correct money management is applied, it truly is an unearthly task to lose in the long run.
Trying to lose with the bookmaker is what I consider to be the essence and "intellectual challenge" of arbing, if there is any. In a way, the situation is similar to normal betting, only it is reversed. There aren't many punters who consistently take money from the bookies. And there definitely aren't many arbers who consistently manage to lose with the bookies and win on the exchanges.
BBC
