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

[KTChampions]

The problem is that bookmakers (at least in my country) fight successful bettors not only on formal grounds (prohibition of arbitrage bets, multi-accounts for receiving bonuses, etc.) but also simply because such bettors are profitable. It can be called differently, like a ban on "value betting", but basically, for no reason, successful bettors have their betting limit reduced and they are practically deprived of the opportunity to bet at least some significant amounts.

[magneto]

This is essentially the principles of +EV betting.

It comes with risks and you need to make sure that you still manage your bankroll correctly, because bad beats can happen even if you are doing everything right.

And don't think that this is the magic thing that will ensure you never get caught. If you bet and win consistently and show that you have an edge, most casinos/sportsbooks are still going to catch on as a matter of time regardless of how well you conceal your activities.

[alegotardo]

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.

How would a bookmaker be able to exchange information with another about a particular player?
Only if that player uses the same nickname in both houses or has KYC in both houses as well.
And even then, I think it's unlikely that they talk to each other about players.

However... It's very difficult to see totally opposite winning possibilities in both houses, the best bookmakers use good algorithms to predict the favorite and they adjust it all the time.

[bittraffic]

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.

How would a bookmaker be able to exchange information with another about a particular player?
Only if that player uses the same nickname in both houses or has KYC in both houses as well.
And even then, I think it's unlikely that they talk to each other about players.

However... It's very difficult to see totally opposite winning possibilities in both houses, the best bookmakers use good algorithms to predict the favorite and they adjust it all the time.

I also doubt they are going to share data about who are those users trying to game the system by trying to implement this arbitrage betting. But I think it's based on the amount of money you bet on a match which they will identify that a user is doing the arbitrage betting. He will need to calculate how much he'd bet on the other side on one platform and to the other.

It's because regardless of the outcome of the game, the bettor will always win and bookmakers don't like it when you keep winning even if it's just a small amount of money every time. It accumulates.

[KTChampions]

This is essentially the principles of +EV betting.

It comes with risks and you need to make sure that you still manage your bankroll correctly, because bad beats can happen even if you are doing everything right.

And don't think that this is the magic thing that will ensure you never get caught. If you bet and win consistently and show that you have an edge, most casinos/sportsbooks are still going to catch on as a matter of time regardless of how well you conceal your activities.

You are right, casinos pay attention to all profitable players and eventually get rid of them (I wrote about this earlier), but this is mainly for fiat bookmakers. With the advent of crypto bookmakers and various services where you can bet directly against another better, this problem becomes less acute.

[DarkStar_]

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.

That's a terrible way of looking at it and you're just exposing yourself to an extra 1.74% margin on the bookmaker's side. It would only ever make sense if there was some sort of promotion for placing a 3 leg multibet that would make it worthwhile, and chances are the bookmaker might see it as promotion abuse in the case.

If you place the multibet with 1 mBTC on each side, you have a chance at either 2.9 mBTC profit or 1.58 mBTC profit. You can also bet 2 mBTC on your "locks" and end up with 2.2 mBTC in profit (4.2 mBTC payout) guaranteed. However, if you'd prefer to have a chance at more profit, you could play a dice roll at 1% house edge and bet 0.62 mBTC on a 2.13x bet (for 0.7 mBTC profit). Thus, you have a 46.48% chance of ending up with 2.9 mBTC, and 53.52% chance of ending up with 1.58 mBTC.

If we assume that the market for your "arbitrage" leg was efficient, the implied vig-removed probability of each outcome is 57.82% (1.70) and 42.18% (2.33). Thus, by placing a dice roll instead of "arbitrage", you have a 4% higher chance of ending up with the larger sum of money. You could argue that you believe the 2.33 fighter has a greater chance of winning than the odds implied, but then we would be getting into value betting territory and you'd be purposely taking a stupid -EV bet on the 1.70 fighter for no reason.

[ralle14]

How would a bookmaker be able to exchange information with another about a particular player?
Only if that player uses the same nickname in both houses or has KYC in both houses as well.
And even then, I think it's unlikely that they talk to each other about players.

I also don't know how they do it but it's certainly possible as i've seen a couple of cases before even with different nicknames it won't be enough to hide their actions since if they have some suspicions they can easily look for every account that placed similar bets or on the opposite side.

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.

There are websites that offer arbitrage opportunities like Bitodds for example they have alerts that mention which sportsbooks to bet on. I agree with the large bankroll part, to make your effort worthwhile you really need a huge bankroll since the profits you get aren't that much and it could only take a couple of bets before the bookies catch on with your betting activities.

[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.

How would a bookmaker be able to exchange information with another about a particular player?
Only if that player uses the same nickname in both houses or has KYC in both houses as well.
And even then, I think it's unlikely that they talk to each other about players.

However... It's very difficult to see totally opposite winning possibilities in both houses, the best bookmakers use good algorithms to predict the favorite and they adjust it all the time.

I think that the existing identification capabilities (not to mention the KYC, which is quite common for many bookmakers) allow you to very effectively determine the relationship of accounts. In the situation of bookmakers against an arbitrage better, it is obvious that the bookmakers are in an allied position and are interested in establishing a channel for transmitting information between themselves.
As for the opportunities to make such bets, yes, they are not simple, but not so difficult either, because, for example, in live betting, the odds change very often and quickly.

[Emitdama]

The problem is that bookmakers (at least in my country) fight successful bettors not only on formal grounds (prohibition of arbitrage bets, multi-accounts for receiving bonuses, etc.) but also simply because such bettors are profitable. It can be called differently, like a ban on "value betting", but basically, for no reason, successful bettors have their betting limit reduced and they are practically deprived of the opportunity to bet at least some significant amounts.

It's normal that they will prohibit shady acts including arbitrage betting because that can make them lose in the long run but to prohibit the bettor that wins in a normal and fair way? I guess there is something with the way they think. We should stop playing on them immediately, there are now lots of sports betting sites online and some can allow VPN so that you can still access them if your country is often on the banned list.

In trading, there was also arbitrage but never heard they disallow it but, they only make it a little harder for the trader. They increase the fees and minimum withdrawal so that it discourages someone to do arbitrage.

[swogerino]

The true arbitrage betting is if you were placing two bets on a certain event that in different providers had different odds.For example a game where it had 1 the home team to win 2.10 or above and the X2 double chance in some other provider more than 2.05,in this way if you placed two individual bets in these different providers whatever the outcome you would come out as a winner,a minimum of 5% was in the days when I worked in a bookie a whole lot of years ago in 2001-2002,back then there were people studying all the different providers to find arbitrage betting (back then was called sure bets) but I guess it means the same.

I do not like trying two different parlays like the examples given here as they are not sure wins or true arbitrage betting.

[Hydrogen]

That's a terrible way of looking at it and you're just exposing yourself to an extra 1.74% margin on the bookmaker's side. It would only ever make sense if there was some sort of promotion for placing a 3 leg multibet that would make it worthwhile, and chances are the bookmaker might see it as promotion abuse in the case.

If you place the multibet with 1 mBTC on each side, you have a chance at either 2.9 mBTC profit or 1.58 mBTC profit. You can also bet 2 mBTC on your "locks" and end up with 2.2 mBTC in profit (4.2 mBTC payout) guaranteed. However, if you'd prefer to have a chance at more profit, you could play a dice roll at 1% house edge and bet 0.62 mBTC on a 2.13x bet (for 0.7 mBTC profit). Thus, you have a 46.48% chance of ending up with 2.9 mBTC, and 53.52% chance of ending up with 1.58 mBTC.

If we assume that the market for your "arbitrage" leg was efficient, the implied vig-removed probability of each outcome is 57.82% (1.70) and 42.18% (2.33). Thus, by placing a dice roll instead of "arbitrage", you have a 4% higher chance of ending up with the larger sum of money. You could argue that you believe the 2.33 fighter has a greater chance of winning than the odds implied, but then we would be getting into value betting territory and you'd be purposely taking a stupid -EV bet on the 1.70 fighter for no reason.

I have had success with similar plays, in the past.

Here I had Demetrious Johnson arbitraged vs Henry Cejudo, thinking Cejudo had good chances of pulling the upset back in 2018.



That was a winning bet for 38 times payout, with I think 10 mBTC wagered on both sides of the action for 380 mBTC.

The other side of the arbitrage was the more conservative gamble, would have profited around 70 mBTC.

When MMA was more one dimensional, I used to hit a winning bet like this around once a month. Maybe ever other month.

Its much harder today with inside information being used more to setup non obvious mismatches.

But at one time, it worked very well.

It is an arbitrage strategy which might also be described as a hedge. Only with a more segments, greater potential profit & higher probability of failure. Multi segment hedge?

[TimeTeller]

The problem is that bookmakers (at least in my country) fight successful bettors not only on formal grounds (prohibition of arbitrage bets, multi-accounts for receiving bonuses, etc.) but also simply because such bettors are profitable. It can be called differently, like a ban on "value betting", but basically, for no reason, successful bettors have their betting limit reduced and they are practically deprived of the opportunity to bet at least some significant amounts.

It's normal that they will prohibit shady acts including arbitrage betting because that can make them lose in the long run but to prohibit the bettor that wins in a normal and fair way? I guess there is something with the way they think. We should stop playing on them immediately, there are now lots of sports betting sites online and some can allow VPN so that you can still access them if your country is often on the banned list.

In trading, there was also arbitrage but never heard they disallow it but, they only make it a little harder for the trader. They increase the fees and minimum withdrawal so that it discourages someone to do arbitrage.

What I don't see happening here is the OP mentioned that casinos may possibly exchanging info of their players?
I don't think they are doing that, unless, they are sister companies. But if not, I don't think competitors are talking to each other.
Anyway, some bettors are really earning from this strategy, but this is not for all. It requires patience and techniques to get your profits.
But I do believe that some players are trying this strategy for themselves especially if they know very well the sports.

[Mauser]

When MMA was more one dimensional, I used to hit a winning bet like this around once a month. Maybe ever other month.

Its much harder today with inside information being used more to setup non obvious mismatches.

But at one time, it worked very well.

It is an arbitrage strategy which might also be described as a hedge. Only with a more segments, greater potential profit & higher probability of failure. Multi segment hedge?

I wonder if you still find these arbitrage opportunities today, or if they all disappeared. I know from stocks trading that arbitrage opportunities are short lived, because information flow today is so fast. As soon as a trader starts profiting of big trade, others will follow. In the sports betting world I would expect the bookies to identify these opportunities too.
Insider information is probably the only way to be always right in betting. Without it we need to rely on hedging or luck to save us. Luck will eventually run out and can cost us a lot of money. I like to make small very risky bets as a hedge. The investment is small with a potential big payout. Especially during big tournaments having multi segment hedges is a good idea. Betting on a few underdogs is relatively cheap and can help recover our money in case our favourite team doesn't make it.

[LUCKMCFLY]

The problem is that bookmakers (at least in my country) fight successful bettors not only on formal grounds (prohibition of arbitrage bets, multi-accounts for receiving bonuses, etc.) but also simply because such bettors are profitable. It can be called differently, like a ban on "value betting", but basically, for no reason, successful bettors have their betting limit reduced and they are practically deprived of the opportunity to bet at least some significant amounts.

It's normal that they will prohibit shady acts including arbitrage betting because that can make them lose in the long run but to prohibit the bettor that wins in a normal and fair way? I guess there is something with the way they think. We should stop playing on them immediately, there are now lots of sports betting sites online and some can allow VPN so that you can still access them if your country is often on the banned list.

In trading, there was also arbitrage but never heard they disallow it but, they only make it a little harder for the trader. They increase the fees and minimum withdrawal so that it discourages someone to do arbitrage.

What I don't see happening here is the OP mentioned that casinos may possibly exchanging info of their players?
I don't think they are doing that, unless, they are sister companies. But if not, I don't think competitors are talking to each other.
Anyway, some bettors are really earning from this strategy, but this is not for all. It requires patience and techniques to get your profits.
But I do believe that some players are trying this strategy for themselves especially if they know very well the sports.

Well, I don't know to what extent this is not possible, I understand that in traditional casinos they do have a list of players who are banned, of course because they have cheated, and they have a system where that information is shared, now this As in blockchain it is something else and the data is more immediate, perhaps that possibility exists, however when we take into account that online casinos, anyone can make an account, pass a KYC and continue playing, it is more difficult to control it, unless there is an algorithm that has saved the way of playing of that player, in this case a super database that stores that data of the players.

[fiulpro]

OR
You can have a new account with your friend or family member you both do it and split the profits as well. But at the same time you have to understand that now a days this is illegal on some sites and the bookmakers are very witty about that, therefore I really haven't tried it yet, but I would love to do that someday if I am not so scared of doing something against their policies and rules.

But if someone does know about it then you can be sued as well if they take you to court. But i don't think how can they place you incharge if you use two different accounts and two people are actually doing that.

Considering the VPN, it's a double edged sword, they might ask for your ID and then it would be additional probelm when you won't be able to withdraw your money from there or have any profits in hand.

[madnessteat]

^

Most likely people who engage in this kind of activity do not register themselves with bookmaker's offices. The black market sells any documents to pass KYC. If there are people who can register thousands of accounts on CoinList for the sake of the fact that less than 5% of them can buy tokens then it is not a problem for them to abuse at betting shops as well.

[Fortify]

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'm not sure this coordination you think is going on exists, at least beyond a group of subsidiaries that exist within a wider gambling company. Not just because that sort of collusion actually helps competitors who are mispricing their bets, but also because this kind of profitable arbitrage is so rare already and there are plenty of peer to peer marketplaces that will almost instantly close any gaps. You'd be lucky to make 1 or 2 percent after commission from regular trading. Most people make money in this arbitrage game but taking advantage of different promo offers but even those run out if they start to cost the sportsbook too much. The most obvious reaction from any sportsbook will just be to ban a player who is regularly taking profit from their country, that is how they shut down such activity.

[perla]

This is an interesting topic to discuss. The concept of arbitrage betting has taken on a completely different dimension in the gambling world in recent years. A true classic arbitrage bet should be one that you always win 100%. I have read that such players are often quickly banned from gambling sites. What you see more nowadays is that they place a value bet, you don't need 2 bookmakers for that. That's the big problem with an arbitrage bet, you have to play at 2 bookmakers and the limits shouldn't be a problem. The terms and conditions may also work against you.

[Boristhecat]

I'm not sure this coordination you think is going on exists, at least beyond a group of subsidiaries that exist within a wider gambling company. Not just because that sort of collusion actually helps competitors who are mispricing their bets, but also because this kind of profitable arbitrage is so rare already and there are plenty of peer to peer marketplaces that will almost instantly close any gaps. You'd be lucky to make 1 or 2 percent after commission from regular trading. Most people make money in this arbitrage game but taking advantage of different promo offers but even those run out if they start to cost the sportsbook too much. The most obvious reaction from any sportsbook will just be to ban a player who is regularly taking profit from their country, that is how they shut down such activity.

Using promotional offers is the most stupid thing you can think of for arbitration. Firstly, this is an actual deception and the one who does this has no moral right to complain later about the reaction (legitimate or not) of the bookmaker. Secondly, promotional offers are monitored with much more care, so the one who uses them does it to his own detriment.
As for the efficiency of the market, I'm not at all sure about it. Odds change both before the event and in live mode. I think the skews in the odds are much larger than 1-2 percent.

[madnessteat]

I have never engaged in arbitrage betting, so I am interested in the questions: are there any services that help to keep track of matches for which bookmaker offices give opposite odds to understand how often arbitrage bets can be made? Are any of the forum members engaged in this kind of activity on a regular basis?