Arbitrage theory

2. Sports Arbitrage Profitability

The answer to the question in the heading is – Extremely! Nevertheless, you will meet a certain number of traps on your way towards becoming an experienced, successful arbitrageur. For once, there is a great mass of people already doing it, so the markets are now considerably more efficient than they were only a short few years ago. Also, today many bookmakers use services like Betradar, scanning hundreds of betting sites at a time and alerting the user immediately whenever there is an out of the line price. So, the bookmakers receive fast feedback – and make less mistakes! Generally, the best arbitrage opportunities will be present at the very beginning of the bet placing, because this is the period when the prices depend on the general situation on the market least of all.

Personally, I believe in signing up to some arbitrage alert systems yourself – they are making the markets a lot more efficient, too, by merely existing, and are also incredible useful for arbitrageurs who wish to work their business quickly.

Now, let us talk about more definite traps that you can find yourself caught in. The biggest problem is, of course, the getting on with size one! I’m talking about the ability to make really large bets with individual bookies. Your arbitrage profit is based on your percentage and edge as well as your turnover. So, if you only get a single 5% arbitrage deal a day yet managed to get 5000 per team, this means you can easily make 500 a day. Unfortunately, in the real world you will hardly be able to get such amounts of money on with the majority of bookmakers out there. There are exceptions, of course – Pinnacle, Ladbrokes, and other big firms – but mostly the books that are best suitable for arbitrageurs offer small limits. In such case you can increase your turnover either by placing a huge number of arbitrage bets per game or by having a lot more than one account. We shall talk about multiple accounts later, of course, but one thing can be said right away: quite often they cannot really solve the problem with a definite bookmaker, since this bookmaker can have a liability limit that gets hit very, very quickly, not a players limit as such. As a result, the arbitrage is only available for a really short period of time – until the liability is hit and never later. As you can see, here the sheer number of your accounts won’t matter! Also, you need to develop a clear feeling for such limits at each bookmaker’s, which generally comes with practice.

The second trap is extremely annoying and lies in the field of getting one of the arbitrage sides on – and then finding out that the bookmaker had either changed the prices or even had the guts to withdraw it completely. The problem can be solved only with quick wits. Use Arbseek or a similar arb service to get to the books involved really fast – and take on the lucky chances and the unexpected advantages! As you finish this course, you will have absolutely no excuses for not being organized; I’ll give you all the details regarding tooling up your web browser with a number of free plugins and addons that can help greatly, too. And remember the golden rule of any arbitrageur: always make for a perfect cover, even if you won’t lose much in any case, because in 99 cases out of 100 the team you couldn’t bet on will be the winning one.

Another thing: please, beware of the arbs that are literally to wonderful to be true – and I mean the word literally! For example, there was a time when I came across an incredible soccer arb between Ladbrokes and another company, BetFred – it was wort 15%, no kidding! I got all the legs on even though BetFred unscrupulously limited me to a paltry bet amount. Things looked rather fine – until, several hours later, I noticed more money at my BetFred account than there should have been. After a quick check I realized that my bet had been voided – with no e-mail from BetFred, too! I had to make another bet to cover the leg – one with a built in loss. BetFred explained themselves by claiming they had made a ‘palpable error’ when posting the price originally; they also said they ‘made things right’ by giving me a chance to either accept the new price or void my book. They even game be a timeframe to make my choice! But, because of the lack of the e-mail, I couldn’t have contacted them within this timeframe – so they voided the bet automatically. The good thing is, such problems do not arise too often. By subscribing to another arb service system, ArbitragePro, you can see the general price picture – and I assure you, all the mistakes will be more than obvious!

One more trap I feel obliged to describe is the differences in the bookmakers’ rules. This is quite a boring topic, but if you learn al the different for diverse sports, you’ll benefit from it greatly by all means. For example, when it comes to baseball it is quite possible that both pitchers are required to start a game for all bets not to be void. But another bookie can tell you that only the pitcher for the team you’ve placed your bet on has to start! As for the third book, they list no pitchers as such. Consequently, you need to act really carefully so that you don’t lose the arbitrage completely because of the ‘rules trap’.

Last, but not least, do not let the annoyance of having not enough funds in one of your betting accounts get to you. Of course, this is Murphy’s Law at its best – the money goes somewhere out to play when you need it the most, so you’d better watch it closely! As for me, I use the services of fewer bookmakers than most arbitrageurs do, because I only prefer those that work for me best, work fast and part with the money easily – to my profit. I monitor their funds, to be sure that I can take advantages of an arbitrage as soon as I see the opportunity without any fears. I’d advise using marginal arbs, even if they are as low as 0%, for the better money circulation. Say, if you need to push more resources into one single book because of running too low, and your other book has been fed even too much, you should use the latter for the surefire favourite and the former to cover all the potential losses. Thus, you can transfer your funds – and likely benefit from it! The low percentage arbitrage deals, in such manner, can be very, very good for your money.

And now, when we know all this hard stuff, let’s get back to the heading. How profitable is arbitrage? Is it profitable at all? Yes – if you are ready for the situation in which you literally reap what you saw. If you have time to look around at all and don’t mind waiting for golden opportunities patiently, you can easily find several hundreds of arbs with a 2-3% return a month. This might not sound too wonderful, but in the issue you receive a 10-12% profit in total! Hence, if you’ve got 5000 at your disposal to use for arbitrage and can work the money cleverly (later I’ll give you more advice regarding the choice of bookmakers for that matter), you can make around 600 per month without too much difficulties. With 20000, you’ll make something like 2400. Remember what I’ve told you about the bookmaker limits and do not expect the ‘profit vs. bank’ graph to always be linear. If you are a millioner who can donate 1000000 for arbitrage, you’ll hardly make 120000 per month since you’ll just find it practically impossible to make your bets get on with the books. I don’t think, in all honesty, that an average apt arbitrageur can surpass 6000 per month – which is, however, a very good income, too.

Although arbitrage is really simple in most cases, just like the example from the above, at times it becomes a rather complex deal. With each month, there are more and more scenarios of what the bookies can offer when it comes to the types of bets, so you can also become more and more creative with your arbitrage structure. Plenty of arbitrageurs don’t go further than merely monitoring the clearest possibilities, but soon you’ll see that arbitrage gives you a lot more chances if you seek other, non-trivial solutions. And it’s good, really – because the whole field here is getting more and more competitive by day. The same goes for financial markets, by the way, where arbitrage is still on if you’ve got the right technologies and know how to be creative – but even then it can be a hard shot. As for our favourite sports market, well, for those who are not afraid to make the effort arbitrage offers wonderful potential. But the effort is there, surely; arbs are no longer available at any given hours or easy to find. Plenty of people no about it, so you need to be patient, centered and know your resource to make it work. And – to make good money!

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