Sports betting arbitrage, also known as scalping and sure-bets is the process of profiting from a difference in odds offered by bookmakers. These opportunities arise when bookmakers odds differ to the extent that backing all possible outcomes will result in a profit.
- Take for example, a snooker match between John Higgins and Stephen Hendry, bookmaker 1 offers odds of 2.1 for John Higgins while another bookmaker offers odds of 2.1 for Stephen Hendry. If you were to place £100 on each result you will be guaranteed a return of £210 (£100 x2.10) no matter what the outcome would be, while your total stake would be £200. Giving you a guaranteed profit of £10.
- Another example is bookmaker A has odds of 1.10 on Roger Federer and 8.00 on Andy Roddick. Bookmaker B has odds of 1.20 on Federer and 5.00 on Roddick. In order to win £100 the following amount are wagered. Bookmaker A: 1. £90.91 at 1.10 wins £100. 2: £12.50 at odds of 8.00 wins £100. Bookmaker B: 1 £83.34 at 1.20 wins £100. 2: £20.00 at odds of 5.00 wins £100. Going by these odds if you were to back both outcomes from Bookmaker A it will cost you £103.41 to win £100, losing you £3.41. If you were to back both sides at Bookmaker B will cost you £103.34 to win £100, losing you £3.34. If you were to back the underdog at Bookmaker A at odds of 8.00 and the favourite at Bookmaker B you would only have to wager £95.84 to guarantee a return of £100, giving you a profit no matter what the outcome of £4.16. In a nutshell, arbitrage betting is comparing the odds on offer at various bookmakers in order to find a guaranteed profit no matter what the outcome.
Arbitrage betting is also known as arbitrage trading, scalping, surebets, SORT trading (Simultaneous Offsetting of Risk Technology and PFD trading (Profit From Differences) although these last two names are rarely used. All these are terms for the same practice, that is, of finding differences in prices offered and backing all possible outcomes to guarantee a profit.
Back and lay arbitrage. This is made possible by the rise of betting exchanges such as Betfair.com and Betdaq.com. This method is often known as trading or scalping, an arb occurs if you are able to lay a result on one betting exchange and back the same result for a higher price on another exchange.
Bonus arbitrage. This is also known as matched betting and the main difference to normal arbitrage opportunities is that you can use the bookmakers sign-up bonuses as a way of guaranteeing a profit. The main advantage of this is that it is a lot easier to earn a profit as you don’t necessarily have to find a true arb to turn a profit. This is because most bookmakers offer sign-up bonuses which usually match the original stake for new accounts.