In the world of sports betting the art of arbitrage involves wagering on both or all sides of an event with the right combination of odds and stakes in place to make a profit whatever the outcome of that event.

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The principle of arbitrage is ‘sure betting‘, supposedly with minimum risk (for the seasoned arbitrageur) and long-term, guaranteed profits.

Surely this is the closest you can come to attaining the “Holy Grail” in betting? Or maybe not?

Despite the apparent rewards on offer the number of worldwide professional sports arbitrageurs is in the low tens of thousands, not more. In comparison, the German stock market employs over 3,200 staff, whilst one of the largest providers of automated arbitrage services, RebelBetting has even fewer subscribers than this number (as we write).

So, why such a relatively small group of customers taking advantage of the so-called ‘guaranteed’ gains averaging between 1.5% and 3.5% per bet (a typical ‘arb‘ provides around 2.5%), with perhaps 15-25% potential profit on the capital employed each month? That’s a far higher reward than any bank, building society, or share dividend offers!

Is Arbitrage legal?

There is no question that arbitrage is legal because the arber is simply exploiting price differences in the market, effectively buying and selling (bets) as any trader does. There is nothing illegal about this.

However, it is understandable that bookmakers are not fond of arbers. Every company has the right (even arbitrarily) to decide who their customers should be and many bookmakers prohibit arbers from their books. As soon as suspicion is aroused bookmaker accounts are quickly limited or even closed.

High Capital Requirement and Personal Characteristics

Successful arbitrage betting ultimately guarantees small returns but the sacrifice is that the process requires large funds. The money is tied-up in the venture for a potentially long period of time.

Pursuing an average 2.5-3.0% profit per betting round and targeting a return of 15-25% of the capital employed per month, the ‘arber’ needs, for example, a starting bank of at least 25,000 € in order to make 5,000 € profit per month.

Wow! A lot of money required at the start to make it worthwhile, and entering the arbitrage arena on these terms will be impossible for many.

Of course, arbitrage betting is a pretty safe investment, but in addition to substantial funds it requires not only great expertise but also some strong personal characteristics to make it possible at all:

• Many time-consuming calculations must be performed. Ouch, lots of maths!
• Clear and complete records of every transaction must be kept. How boring!
• Discipline and consistency has to be maintained at all times. Far too unsocial!

And lastly, a really stable, reliable and fast internet connection is essential, without any limitations to any bookmaker or exchange worldwide.

However, the average punter is perhaps not such a ‘professional’ investor, but bets for fun and/or the excitement of watching an event knowing that money is riding on the outcome. Of course, he hopes to profit from the wager but his are gambles, not investments. Is that the reason why there are so few ‘arbers’ out there and active in the market?

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(1) Disappearance of Arbitrage Opportunities

Arbitrage positions often have a very brief window of opportunity, perhaps between three and 15 minutes, before they disappear from the market.

Furthermore, the greater the number of ‘arbers’ finding and exploiting an ‘arb’, the shorter the arb’s lifespan becomes.

Once an arbitrage opening is identified speed and accuracy are essential to ensure that bets are placed at the required odds within the very short time window, the duration of which is fleeting and unknown.

Possible solutions:

Rapid disappearance of the optimum odds to attain profit from backing (or laying) all outcomes of an event is one of the largest challenges faced by professional arbers.

Experience in combating or avoiding loss making positions in sports arbitrage is the equivalent of possessing the betting equivalent of the ‘holy grail’, and every arber who has this high degree of market knowledge should be considered a master in his field.

• One path to attaining such heights is to specialise in cross market arbitrage, as these transactions are harder to identify for bookmakers and punters alike, reducing the risk they will be found by many others; hence the lifespan of the arb is protected or prolonged.

• Focusing on established bookmakers with both an online and high street presence is also a good idea. In this way, arbs can be compiled using a mixture of online bets from home, and walk-in transactions using the betting shops in your neighbourhood.

  Shops need to publish and make their prices available several days in advance as fixed odds coupons are printed and distributed for walk-in customers. This can certainly present arbitrage situations where all bets can be placed many days in advance of the event (although whether arbers mind having their betting bank tied-up for longer periods such as this is purely a personal and/or financial decision).

  Usually, only on the day of the event will punters be faced with the possibility of arriving at a shop with fixed odds coupon in hand only to be told that the price they have selected has dropped.

In summary, the combination of cross market arbitrage via the larger bookmakers will often present arbitrage opportunities with life spans of much longer than 15 minutes.

Bookmakers have the advantage in the long run and they work very hard to keep it that way; after all, they set the odds.

Simon and Björn from the RebelBetting team

But bookmaking is essentially a market situation like any other with many hundreds of providers charging different prices for their goods (bets).

There is never a time when every bookmaker offers exactly the same price, which is why it is possible to take advantage of price differences to guarantee profits on every bet you make.

In our article ‘Is Arbitrage Worth Pursuing?’ we discussed the mindset and set-up required to be a successful arbitrageur.

In this article we showcase the best of the arbitrage software providers, RebelBetting.com.

Co-founder of RebelBetting, Simon Renström, is the brains behind the project, which has outlasted many competitors over the last 10 years.

We recently interviewed Simon to find out how RebelBetting was born, and to clarify the doubts many potential customers have about arbitrage in general.
 

Simon Renström, Co-founder of RebelBetting:

“I’ve been a software developer since 1996. I first heard of arbitrage betting in 2006 from my friend and RebelBetting co-founder, Mattias. He was a professional poker player, and had tested a few sports arbitrage products that were around at the time.

Even though the concept worked, the products were horrible. He eventually managed to convince me to build a better product, or at least a prototype.

I’ve always half-jokingly called gambling a ‘tax for the stupid’, but I was attracted to the idea of beating the bookies. I’m not a gambler, but I love sports.

The prototype was built during 2007, and in September of that year I quit my job at one of Sweden’s largest IT consultant firms and started RebelBetting. The first public version was released in 2009.

We now have four people working full time and we’ve recently hired one more part-time developer.”

How profitable is sports arbitrage using your software?

“If gambling is a high-risk lottery, in comparison sports arbitrage is more of a low-risk high-yield investment method.

While not completely risk-free, most users reach a very high ROI (return on investment) compared to other investment methods; an average of 10-15% per month is common.”

Is Sport Arbitrage as easy as creating an account and clicking a button?

“It’s important to understand it still requires a lot of time and effort; it’s not a free lunch.

Before you’ve placed your first bet you need to learn the concepts, register with online bookmaker sites, and prepare for the task ahead with a few days of ‘paper trading’ first (getting used to creating ‘arbs’ without betting actual money).

However, if this feels like a lot of work compared to the potential profits, arbitrage trading is probably not for you.”

If sports arbitrage is one of the most effective ways to make money
from sports betting, why isn´t everyone doing it?

“The interest for the RebelBetting product is slowly increasing and has been since we started. Most customers trade for a limited time and are happy with the money they make.

Bookmaker resistance in the form of stake limitations is the most common reason why many clients do not become full-time arbitrageurs. But amongst our clientele we have several professionals who have been with us more than five years.

I would say it’s definitely a ‘niche product’. Many love the idea but it takes dedication, a healthy starting bank, and time to get started. It’s always great fun and very rewarding to hear back from a happy customer telling us about their amazing profits.”

RebelBetting: Extolling the Benefits of Arbitrage

Sports arbitrage is when the odds from two different bookmakers allow bets on both sides of an event to ensure a small profit, regardless of the outcome.

The process of manually finding these opportunities across multiple bookmaker accounts is not easy and can be very time consuming. In the vast majority of cases, such opportunities exist only momentarily, for a few minutes at most.

Now, think about possessing a software that automatically finds arbitrage situations for you in real time. Think about the ultimate arbitrage tool, which tells you how much money to apportion to each side of the bet according to how much money you want to earn from the transaction.

Their software does all of this for you. You can sign-up for free and trial Rebelbetting in a limited format, until you are ready to go ahead and subscribe to the full package.

RebelBetting finds hundreds of arbitrage opportunities every day across a whole range of different sports. Profits are typically 1% to 5% per bet, and although this may sound small, the accumulation of small daily gains can add-up to huge monthly profits.
 

There are not many other reliable arbitrage software providers around at the moment. Rebelbetting has stood the test of time. They stand out for the accuracy and effectiveness of their software.

Watch RebelBetting’s short video explaining the basic principles of arbitrage:

Recently we received an email from a distressed reader who after a very short time scale (just 2 months!) employing a strategy based on our Home-Draw-Away article, found that without warning several bookmakers (e.g. Boylesport, Stan James, Expekt, Betway, 888Sport, Sportingbet) cancelled his accounts and literally barred him from their e-premises.

Other bookmakers didn’t close his accounts but effectively also ended their relationship by limiting his stakes to ridiculously small amounts such as 2 € per bet.

Our initial response was that bookmakers are free to choose their clients and accounts belonging to customers who do not satisfy their business model are subject to cancellation. This was half accepted by the reader who stated you can read similar suggestions throughout the Web without ever finding a clear explanation but he was insistent and what he really wanted to know from us was WHY?

Therefore, this article attempts to answer in detail the legitimate question as to why customers are banned by bookmakers or accounts are limited.

However, we cannot promise that our conclusions will be agreeable to everyone because sometimes it is better not to know WHY, as dreams are sometimes all too easily shattered by the truth.

Warning: If you prefer to cling on to aspirations of becoming very rich one day with sports betting then perhaps you should stop reading this article now!

Doubtless, life is more bearable if there is some hope of better fortune involved. The reasons why bookmakers close accounts are banal. Using simple logic to interpret the business approach of bookmakers, the bigger picture almost certainly conveys a straightforward message to the masses of people with gambling dreams. Unfortunately, the truth which evolves is contrary to the popular belief system of becoming rich from betting.

Soccerwidow’s survey results for the question “Do you make money with betting?”

This poll has been present on the Soccerwidow site for many months. Let us take a look at the current vote scores to discover whether readers admit to making money from betting:

Survey results (up to November 2012)

So far (as per November 2012), the survey has accumulated a total of 832 votes. Although this is a fairly representative sample, we cannot claim any scientific significance as it has not been carried out under controlled conditions.

Unfortunately, the survey also has a design error. It contains the option, “I make a living from betting”, but fails to quantify voters’ winnings over and above £5,000 (English site) or 5,000 € (German site). Therefore, we have to accept that anyone regularly winning more than £5,000 or 5,000 € per annum had no other option but to tick, “I make a living from betting”. Of course although this is insufficient for survival in most European countries, our readership is worldwide and it may be that 5,000 currency units is enough to live on in some countries.

“I would like to open an account with your bank.” she says to the bank clerk.

He smiles and replies, “Why of course, Madam, how much would you like to deposit?”…

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…“One million pounds!”, says the old lady.

The astonished clerk smiles again but decides to proceed with caution.

“That’s a sizeable sum, Madam, where did you get so much money from?”

The lady is understandably reluctant to answer with so many other bank customers within earshot.

Finally, the clerk decides upon discretion and arranges a private meeting between the lady and the manager of the bank.

After the introductions are over, the bank manager asks the lady, “Madam, where did you get so much money from?”

“It’s the profits from all the winning bets I have placed recently”, she smiles.

The bank manager cannot begin to imagine who this woman is or how she can be such a successful gambler, old and frail as she looks. He contemplates the situation for a few seconds before she looks him in the eye and speaks again…

Image: Anton Brand (Shutterstock)

“I bet you ten thousand pounds that your crown jewels are square shaped!”

Caught completely by surprise, the bank manager almost chokes before replying, “That is quite a ridiculous suggestion, Madam. My gonads are as normal as any other man’s!”

Again, the old lady grins before declaring, “Well, if you’re so sure, then you won’t mind putting your money where your mouth is!”

After a few minutes of discussion with this odd woman the bank manager agrees to the wager, and she promises to return the following day at 10am.

That night, the bank manager is in bed and decides to be on the safe side. He slowly snakes his hand towards his crotch and has a good rummage around. Everything is very normal down there he thinks, not in the least bit square! The old lady cannot possibly win. Reassured, he falls asleep.


The next morning the little old lady reappears at the bank with a smart dressed man in tow. They are ushered together into the manager’s office. She explains to the manager that she has brought her lawyer with her to act as a witness to the financial transaction.

As soon as the formalities are out of the way she exclaims, “Well come on then, let’s see them…both!”

Obligingly, the bank manager drops his trousers and whips out his wedding tackle.

Triumphantly he cries, “There, Madam, as you can see, everything is absolutely normal!”

The woman’s eyes narrow as if to focus more fully on the situation before she says with a playful look on her face,

“Well, they look a little lumpy to me!”

The bank manager’s patience is by now a little stretched and he immediately emphasizes that his meat and two veg are perfectly normal for him.

The old lady counters by saying, “Well, as there is the small matter of ten thousand pounds on the line, I need to be absolutely sure – will you let me feel them, please?”

Image: Anton Brand (Shutterstock)

Aghast at such a suggestion the bank manager considers long and hard what to do.

His children’s school fees are due soon and he could really do with the money.

At last, he reluctantly agrees to the lady’s request.

The elderly woman kneels before him and cradles his balls, yanking them this way and that, leaving him feeling weak at the knees.

Just as she stops, satisfied that nothing more can be done, her lawyer collapses onto his knees and begins to howl and cry, beating the floor with a fist.

“What’s the matter with your lawyer?” the bank manager asks.

“Well…”, says the old woman, “You may have won our bet because your testicles are not square at all, but I bet twenty thousand pounds with my lawyer here that I’d have my local bank manager firmly by the balls today..!”

This is the classic form of sports arbitrage (sure bets) in football betting.

The arbitrage opportunity relies on at least two bookmakers evaluating the same event differently, each offering different odds. Taking advantage of these price differences is the key to creating an arbitrage, or “arb”.

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For example, bookmaker ‘A’ offers a price of 2.04 on the ‘Over 2.5 Goals’ market, whilst bookmaker ‘B’ is pricing the ‘Under 2.5 Goals’ bet for the same match at 2.08.

This is an arbitrage opportunity, or “surebet”. Both prices return more than even money, and of course one of the bets will definitely be a winner.

To ensure the same profit whatever the outcome, the stake money is weighted on each outcome. With bookmaker ‘A’, 50.49 units are wagered at 2.04 odds; with bookmaker ‘B’, 49.51 units are placed at 2.08 odds.

The total stake is 100 units, and no matter which bet wins, the guaranteed return is 2.99 units (almost 3% profit on the total stake).

Sometimes, “arbs” with 5% or more return may be found in the market, although larger arbs occur more seldom in this “classic arbitrage/surebet market”.

The situation described above is the easy option. For more advanced gamblers who enjoy thinking outside the box there is another type of arbitrage opportunity available, and these arbs often achieve a higher return. This of course relies on knowing where to look…

(2) Cross Market Arbitrage Betting

Due to the explosive growth of the Internet and the increase of betting customers, bookmakers now offer more and more betting options.

This means that the market is not limited to the historical standard sports betting markets such as gambling on the outcome of a match (home, draw, or away), or on goals; there are now many more betting choices within a single game and thus more arbitrage openings.

For some of the more popular matches there are often over 100 different bet types available in the market.

This enormous coverage opens up cross-market arbitrages opportunities but, in order to find them, creative thinking is required.

The Big Advantage of Cross Market Arbitraging

Many cross market arbitrages are not obvious; therefore, the opportunity remains viable for a much longer time. Surebets between bookmakers in only one betting market have a limited lifespan, sometimes only minutes as demand and supply in the market fluctuates.

It is said that there are about 60,000 different combinations of arbitrages using cross market methods, and this means that everyone seriously interested in arbitrage will certainly be able to identify a preferred strategy for identifying unusual arbitrage groupings…

Some Cross Market Arbitrage Examples:

• Team 1: More than 0.5 goals
  Team 2: Clean Sheet
• Match result: Draw
  Draw no bet: Team 1
  Asian Handicap Team 2: +/- 0
• Total goals: 1
  Total goals: 2
  Total goals: Over 2.5
  Time of first goal: No Goals (or 0-0)
• Match result: Draw
  Draw no bet: Team 1
  HT/FT: Team 1/Team 2
  HT/FT: Draw/Team 2
  HT/FT: Team 2/Team 2

Caution! Not everyone bookmaker has the same bets on offer, and with some, a bet is not necessarily known by the same name as it is with others. Equally, the same bets may be subject to different conditions with different bookmakers.

Cross Market Arbitraging Requires Thinking outside the Box

Cross market arbitraging does not only entail placing straight forward bets, e.g. final score: 0-0, goals by only one team, and both teams to score. There are plenty of cross market arbitrages such as: Match result = draw, Draw no bet: team 1, and Asian Handicap team 2: +/- 0.

In this case, if the match finishes drawn the stakes for bets 2 and 3 are returned, but if team 1 or 2 win the game then the stakes for the other 2 bets are lost. This certainly requires some thinking and accurate calculating before committing to place the bets for a guaranteed profit.

Recommended Sports Arbitrage Services

If you fancy a taste of cross-market arbitraging, then consider subscribing with an automated arb finding service. Unfortunately, none of the really good sites are free, and usually there are also no free trials.

However, please note the one service we will document below have their software available for free download to demonstrate arbs in the range up to 0.6% (Rebel Betting). Of course, profits this small are hardly worthwhile, so you will have to subscribe to see the higher arbs.

Arbitrage services are not cheap and one of the reasons is certainly the extremely high programming effort required, which does not stop after the software has been developed. You will always see new bookmakers and/or new betting types added to the armoury at your disposal.

On the other hand, there is a limited customer base which is interested in purchasing niche products such as these. The competition between arb finding software producers is high, and many of these providers share a relatively small market of perhaps just 20,000 serious customers worldwide.

Rebel Betting: Different packages available at different costs to suit your budget.

Rebelbetting provide a wide range of cross market bets and also update them as soon as they are detected. Their tutorials are comprehensive and ultimately they are easy to use.

If you thought cross market arbs were limited to three or four markets then you may be surprised to see some opportunities flagged up involving up to 20 bets on the same game.

Cross market arbitrage is a real science and turns betting from a form of gambling into pure investing.