The paradox of arbitrage betting (and how to make money on it)

[Boristhecat]

For example, let's take the simplest case when we have the opportunity to make an arbitrage bet and get money without risking anything:
There are two outcomes of the event: 1 and 2, and let's say that at bookmaker A we can bet on outcome 1 with odds of 2.05, and at bookmaker B we can bet with the same odds on outcome 2.

It turns out that if we make two bets (for example 100$) on both events, we will get a guaranteed profit:

100x2.05 - 200 = 5$ net profit from a bet of $200

100x2.05 - either bet on event 1 or bet on event 2 wins
200 - money spent to place both bets

But there is a problem that bookmakers (most of them) prohibit arbitrage bets and most likely exchange information about the players who make them in order to get rid of them later. Is there a solution to this problem?

I think yes: the probability that of the two events 1 and 2 the first or the second will happen is the same. This means that if we bet only on event 1 (or 2) we will (on average) either win $105 or lose $100.

(105 - 100)/2 = 2.5 $ net profit from a bet of $100

Conclusion: if you find an opportunity to make an arbitrage bet, then you can bet only on one of the outcomes and on average you will still be in the black plus avoid problems with ToS of bookmakers.

[madnessteat]

I've never been involved in arbitrage betting, but what prevents you from using the account of a friend or distant relative with a different surname to participate in betting on the second site. As I understand it, they obviously will not be able to trace that you are engaged in arbitrage if you make bets under different IP addresses using VPN. Or if using VPN is forbidden by the rules to involve your friend for betting.

[Oshosondy]

I prefer to bet on sport, most especially football where arbitrage betting or what you call it is not possible. If you take win for match bet A and you take win for match bet B, if the end result is draw, the person will both lose on both matches and have minimum losses. I am not a person that take betting special, I bet on what I can afford to lose and either win or lose. I will prefer to go for a single bet rathe than complicating the whole thing.

[Boristhecat]

I've never been involved in arbitrage betting, but what prevents you from using the account of a friend or distant relative with a different surname to participate in betting on the second site. As I understand it, they obviously will not be able to trace that you are engaged in arbitrage if you make bets under different IP addresses using VPN.

Big data. At a distance of 100-500 bets, but in fact earlier, you will be calculated and get a ban on both accounts even if you use different devices, VPNs, or even "work" together with someone real from another country. In addition, I'm not saying that all other methods are bad, I just "invented" (i think I'm not the first here) another way.

I love math paradoxes and I find this one very interesting - you make an arbitrage bet but it's not really arbitrage (you don't bet on two mutually exclusive events) but still make a profit.

[AicecreaME]

For example, let's take the simplest case when we have the opportunity to make an arbitrage bet and get money without risking anything:
There are two outcomes of the event: 1 and 2, and let's say that at bookmaker A we can bet on outcome 1 with odds of 2.05, and at bookmaker B we can bet with the same odds on outcome 2.

It turns out that if we make two bets (for example 100$) on both events, we will get a guaranteed profit:

100x2.05 - 200 = 5$ net profit from a bet of $200

100x2.05 - either bet on event 1 or bet on event 2 wins
200 - money spent to place both bets

But there is a problem that bookmakers (most of them) prohibit arbitrage bets and most likely exchange information about the players who make them in order to get rid of them later. Is there a solution to this problem?

I think yes: the probability that of the two events 1 and 2 the first or the second will happen is the same. This means that if we bet only on event 1 (or 2) we will (on average) either win $105 or lose $100.

(105 - 100)/2 = 2.5 $ net profit from a bet of $100

Conclusion: if you find an opportunity to make an arbitrage bet, then you can bet only on one of the outcomes and on average you will still be in the black plus avoid problems with ToS of bookmakers.

This is what some people do to achieve a somewhat sureball win in betting. Putting your bets on both teams will still make you a profit even a little amount because the bet you won will be the bet you made on the other side. The only bonus is the remainder apart from the base bet. This is preferred by some, while others do not because of the complications of things. Personally, I wouldn't try arbitrage betting. I would rather bet on a single team that I researched and trust upon to avoid the complexity. After all, high risk, high reward. Although this is just my personal perspective because I believe in risking what I can only afford to lose. I do not bet and invest beyond what I'm scared of losing. This is to ensure myself that I won't have regrets later on and I will still have something left if ever worse things happen. If you want this kind of way as an extra profit, you could do this. But still do it with caution because everything has its costs.

[Mauser]

Conclusion: if you find an opportunity to make an arbitrage bet, then you can bet only on one of the outcomes and on average you will still be in the black plus avoid problems with ToS of bookmakers.

This would be one solution to avoid being flagged as an arbitrage gambler, but you are still taking risks here. If the outcome you bet on didn't come then you lost your money. Choosing the bookie that offers the best odds for your bet is a good idea and will make you a lot more money in the long run. The thing with arbitrage bets is that they are usually risk free with a much smaller payout. The risk free bet enables you to bet a lot of your money on it as there is no real risk of losing your money. How about you look for a partner to the trades? If your friend bets one leg of the arbitrage and you bet the other than there shouldn't be an issue with the TOS. I tried myself to look for such arbitrage bets in the past but couldn't really find any. Are you looking at not so popular sports and less frequent matches?

[madnessteat]

I've never been involved in arbitrage betting, but what prevents you from using the account of a friend or distant relative with a different surname to participate in betting on the second site. As I understand it, they obviously will not be able to trace that you are engaged in arbitrage if you make bets under different IP addresses using VPN.

Big data. At a distance of 100-500 bets, but in fact earlier, you will be calculated and get a ban on both accounts even if you use different devices, VPNs, or even "work" together with someone real from another country. In addition, I'm not saying that all other methods are bad, I just "invented" (i think I'm not the first here) another way.

I love math paradoxes and I find this one very interesting - you make an arbitrage bet but it's not really arbitrage (you don't bet on two mutually exclusive events) but still make a profit.

If your strategy works and you're worried about losing money if your account is banned you can use multiple accounts and constantly look for new sites to work on. I heard a story once that one enterprising guy registered a lot of his fellow villagers in one of the testnet and earned very well)

[Japinat]

I presume you mean sports betting, right?

~snip~
But there is a problem that bookmakers (most of them) prohibit arbitrage bets and most likely exchange information about the players who make them in order to get rid of them later. Is there a solution to this problem?

There's no way they will know that you are doing arbitrage betting if you are doing it on two different sites.
Arbitrage betting in the first place is not illegal, so why would the bookmakers or sportsbooks care about that?

It's an opportunity, but a rare opportunity as it's not easy to find it and I find it very difficult that's why I didn't pursue that kind of betting.

Also, most sportsbooks (crypto sportsbooks) promote anonymous betting, so how would they know that you are the same person who bet on the other site?

[Hydrogen]

The formula for arbitrage plays in sports gambling looks like this IMO.

To cite an example, consider the last UFC event:

https://en.wikipedia.org/wiki/UFC_272

Let's say you were fairly certain Jalin Turner (1.67) and Kevin Holland (1.26) would win their fights.

But didn't have an idea of who would win the fight between Ludovit Klein (2.33) and Devonte Smith (1.70).

Make 2 parlays

Ludovit Klein(2.33), Jalin Turner(1.67), Kevin Holland(1.26) = (4.90)

Devonte Smith(1.70), Jalin Turner(1.67), Kevin Holland(1.26) = (3.58)

That's one potential method of turning uncertain matches (with good odds) into arbitrage winners as long as the locks hold up.

[MonsterV]

This would be one solution to avoid being flagged as an arbitrage gambler, but you are still taking risks here. If the outcome you bet on didn't come then you lost your money. Choosing the bookie that offers the best odds for your bet is a good idea and will make you a lot more money in the long run. The thing with arbitrage bets is that they are usually risk free with a much smaller payout. The risk free bet enables you to bet a lot of your money on it as there is no real risk of losing your money. How about you look for a partner to the trades? If your friend bets one leg of the arbitrage and you bet the other than there shouldn't be an issue with the TOS. I tried myself to look for such arbitrage bets in the past but couldn't really find any. Are you looking at not so popular sports and less frequent matches?

That’s exactly what I was thinking as well, and I think it would also be better to have partners that you somehow know so you could constantly communicate about what will be your next agendas and actions in executing this. Nice comprehension and explanation here by the way, @Mauser.

[Boristhecat]

Conclusion: if you find an opportunity to make an arbitrage bet, then you can bet only on one of the outcomes and on average you will still be in the black plus avoid problems with ToS of bookmakers.

This would be one solution to avoid being flagged as an arbitrage gambler, but you are still taking risks here. If the outcome you bet on didn't come then you lost your money.

Individual losses or wins are not important. Only the average is important. In this example (and in any other case of arbitrage bets), the average outcome will be profitable.

I presume you mean sports betting, right?

There's no way they will know that you are doing arbitrage betting if you are doing it on two different sites.
Arbitrage betting in the first place is not illegal, so why would the bookmakers or sportsbooks care about that?

It's an opportunity, but a rare opportunity as it's not easy to find it and I find it very difficult that's why I didn't pursue that kind of betting.

Also, most sportsbooks (crypto sportsbooks) promote anonymous betting, so how would they know that you are the same person who bet on the other site?

Yes, I'm talking about sports betting.
I do not have all the information to prove that by arbitrage betting on different sites you will attract attention, and you cannot prove otherwise. Therefore, it is worth thinking about different options. It seems to me that bookmakers are not stupid and effectively resist those who are trying to make guaranteed money.
As for the difficulty of finding such bets, I heard that there are aggregator sites that provide such information. In addition, if you bet live, then you will have much greater opportunities to find an arbitrage bet.
Yes, crypto betting shifts the advantage towards the player. But in any case, the struggle between bookmakers and bettors is not the main topic of my thread. I wanted to show a mathematical paradox.

The formula for arbitrage plays in sports gambling looks like this IMO.

To cite an example, consider the last UFC event:

https://en.wikipedia.org/wiki/UFC_272

Let's say you were fairly certain Jalin Turner (1.67) and Kevin Holland (1.26) would win their fights.

But didn't have an idea of who would win the fight between Ludovit Klein (2.33) and Devonte Smith (1.70).

Make 2 parlays
-skip-

This is a completely wrong example of arbitrage. No matter how "confident" you are in the outcome of the battle, it may end differently. The meaning of arbitration is in guarantees. Your premonition and analytics do not guarantee anything.
If you're sure about Jalin Turner (1.67) and Kevin Holland (1.26), just bet on them and take the easy money, right?

[Hydrogen]

This is a completely wrong example of arbitrage. No matter how "confident" you are in the outcome of the battle, it may end differently. The meaning of arbitration is in guarantees. Your premonition and analytics do not guarantee anything.
If you're sure about Jalin Turner (1.67) and Kevin Holland (1.26), just bet on them and take the easy money, right?

Jalin Turner (1.67) and Kevin Holland (1.26) together is only worth only (2.10).

The way the arbitrage I posted works is, one side is (4.90) the other side is (3.58).

Bet 1 mBTC on both sides, 1st parlay pays out 3.90 mBTC and 2nd pay sout 2.58 mBTC.

Total winnings come out to either 2.90 mBTC or 1.58 mBTC once the 1 mBTC loss from the losing leg is factored in.

Its a guaranteed win as long as the lock plays hold up.

...

Arbitrage is a strategy where winning becomes possible on both sides of an outcome.

Asking for guarantees in the context of sports gambling, where there never are guarantees unless games are rigged.

Is like asking for water that isn't wet.

This is a good format for turning uncertain sporting events into arbitrage opportunities.

Which is the best anyone could hope for given the circumstances.

[seoincorporation]

I have read in the past about people making big money with this technique, but I have never tried it. You need a big bankroll to make a profit and there is always a risk.

We could try to do arbitrage betting on UFC but sometimes the fights end in a Draw, and that would be a game over for us. And as OP mentioned, sportsbooks keep an eye on the user's bets to try to avoid this practice and they could ban our accounts.

[OgNasty]

I try to use this strategy whenever the opportunity arises. You can do a similar strategy with options in the stock market. When it comes to gambling though, these opportunities frequently present themselves. Especially with live betting. You just have to arbitrage your bets when you see that the odds change to where it’s possible.

I also will sometimes add multiple bets if there’s a “sure thing” to make the arbitrage bets more profitable as parlays. That sort of defeats the purpose, but if it’s a sure enough bet, it can enable lots of arbitrage opportunities. Just don’t lose the sure thing.

[KTChampions]

I have read in the past about people making big money with this technique, but I have never tried it. You need a big bankroll to make a profit and there is always a risk.

We could try to do arbitrage betting on UFC but sometimes the fights end in a Draw, and that would be a game over for us. And as OP mentioned, sportsbooks keep an eye on the user's bets to try to avoid this practice and they could ban our accounts.

In fact, it is not the size of the bankroll that matters, but the speed of its turnover. If you play plus then you will quickly increase your bankroll with the condition that you make a lot of bets. As for sporting events with three (or more) outcomes, arbitrage strategies work for them also, but there you should place bets guided by a different algorithm.

[timerland]

For example, let's take the simplest case when we have the opportunity to make an arbitrage bet and get money without risking anything:
There are two outcomes of the event: 1 and 2, and let's say that at bookmaker A we can bet on outcome 1 with odds of 2.05, and at bookmaker B we can bet with the same odds on outcome 2.

It turns out that if we make two bets (for example 100$) on both events, we will get a guaranteed profit:

100x2.05 - 200 = 5$ net profit from a bet of $200

100x2.05 - either bet on event 1 or bet on event 2 wins
200 - money spent to place both bets

But there is a problem that bookmakers (most of them) prohibit arbitrage bets and most likely exchange information about the players who make them in order to get rid of them later. Is there a solution to this problem?

I think yes: the probability that of the two events 1 and 2 the first or the second will happen is the same. This means that if we bet only on event 1 (or 2) we will (on average) either win $105 or lose $100.

(105 - 100)/2 = 2.5 $ net profit from a bet of $100

Conclusion: if you find an opportunity to make an arbitrage bet, then you can bet only on one of the outcomes and on average you will still be in the black plus avoid problems with ToS of bookmakers.

I think that there are two problems with this:

1. You are not going to find a lot of profitable arbitrage opportunities. Even if you sign up to a subscription service, by the time that you see a recommendation/tip it's probably already too late and the opportunity has been taken advantage of.

2. A lot of the people here don't have the bankroll management that is necessary for this, and it's not a "surebet" in the sense that you are only making paper profits (in terms of EV) and not necessarily booking it in reality. There is a huge difference in risk.

[Boristhecat]

This is a completely wrong example of arbitrage. No matter how "confident" you are in the outcome of the battle, it may end differently. The meaning of arbitration is in guarantees. Your premonition and analytics do not guarantee anything.
If you're sure about Jalin Turner (1.67) and Kevin Holland (1.26), just bet on them and take the easy money, right?

Jalin Turner (1.67) and Kevin Holland (1.26) together is only worth only (2.10).

The way the arbitrage I posted works is, one side is (4.90) the other side is (3.58).

Bet 1 mBTC on both sides, 1st parlay pays out 3.90 mBTC and 2nd pay sout 2.58 mBTC.

Total winnings come out to either 2.90 mBTC or 1.58 mBTC once the 1 mBTC loss from the losing leg is factored in.

Its a guaranteed win as long as the lock plays hold up.

You write nonsense because it has nothing to do with arbitrage betting - and Turner and Holland can lose their fights and then your supposedly "guaranteed profit" will turn into a loss.

I think that there are two problems with this:

1. You are not going to find a lot of profitable arbitrage opportunities. Even if you sign up to a subscription service, by the time that you see a recommendation/tip it's probably already too late and the opportunity has been taken advantage of.

2. A lot of the people here don't have the bankroll management that is necessary for this, and it's not a "surebet" in the sense that you are only making paper profits (in terms of EV) and not necessarily booking it in reality. There is a huge difference in risk.

1. The theoretical possibility is one thing, the practical implementation is another. I showed a theoretical possibility. And in fact, arbitrage opportunities are not fleeting phenomena at all - for example, if you bet a week before the event, then you will most likely have the opportunity (long in time) to make an arbitrage counter-bet. If this opportunity does not appear, then you can wait for the start of a sporting event and catch such a bet in live mode.

2. The problem of the presence or absence of the necessary bankroll does not cancel the fact that there is an opportunity to make arbitrage bets.
I do not see a fundamental difference in risk, since at a distance (as I showed in the calculations in the first post), from the point of view of mathematics, such bets are equivalent to classical arbitrage.

[buwaytress]

Hey Boris, I remember you

Statistically, I agree with the idea that betting on same probability outcomes but with higher than expected returns is profitable in the long run, but I think the strategy you suggest can't be in any way labelled as arbitrage since by definition, arbitrage means betting on both sides of the same market.

Again, I'm not going to get into an argument, but when I am value-betting for picks, I always choose what I believe is good value (and statistics usually back my pick). I translate simple odds into statistics (not scientific but there you go). For example, 10/1 should translate into 10% wins but if the stats show they actually win more than 10% of the time on those odds, then you have good value.

So I keep betting on those types of games, on my picks threads, but I'm not sure I'd call that arbitrage?

[bitbollo]

Conclusion: if you find an opportunity to make an arbitrage bet, then you can bet only on one of the outcomes and on average you will still be in the black plus avoid problems with ToS of bookmakers.

What is the real advantage of this kind of bet?
I miss this part ... betting in only one side what type of advantage should bring to the player? You have just placed a bet with odds higher then 2.00 that's all. You don't need an arbitrage bet but just an event with one of the side above 2.00.
If you are searching an arbitrage bet you need to use a scanner enable to find for you these options.
Scanners are not free. Create a scanner or check bookmakers requires a lot of time...

From my experience: you need a LARGE bankroll in both sites you're using for arbitrage (but there are dozens of bookmakers that could have an opportunity for an arbitrage bet so it's become a LARGE bank roll "no limits funds" in all available site).
Higher odds are available (generally) in exchange markets but there is not enough liquidity for a large bets...
At the ends there are just few real options suitable and even if you are able to found the real advantage is just a little percentage.
Time and efforts doesn't justify the work for such bets.

You can avoid some betting limits because if you bet in FIAT, you can use meanwhile CRYPTO bookmakers.
For certain amounts it's close to impossible some one will note, but the amount available for "real cashout" is a little percentage, few dollars unless you're playing with 5-digit amount but at this point I don't know if it is really worth as idea.

[ajochems]

Betting had a very simple statics.It may be any kind of betting. Occurring a wide set of tactics is essential in betting.You need to learn huge amount of betting idea, only by the tactics.Arbitrage trading was an enough one to get a good profit. Betting is a part of risk. One side, it will gives you a enough chance of winning.On the other hand, their is a chance of losing in the gambling. Losing is not only in gambling and same was their in trading too.