Sports Arbitrage Opportunities

See also

Converting fractional (UK) odds to decimal (European)

Easy! Simply divide the left-hand number by the right-hand number and add 1.

For example:
11/8 = (11 / 8) + 1 = 2.375
4/5 = (4 / 5) + 1 = 1.80



Why do sports arbitrage opportunities occur?

How is it possible to place bets that never lose and therefore make a risk-free profit? We all know that bookmakers are not renowned for giving money away to punters and there is no such thing as a guaranteed winner! Well, sports betting arbitrage opportunities come to exist mainly because of the large number of bookmakers pricing up sports events and because an odds compiler's opinion determines what odds each bookmaker offers.

In the past, arbitrage betting was possible through traditional high street bookmakers' betting shops. For instance it was possible to use their football coupons to find arbs on the weekend football matches. However, it was laborious to travel to each betting shop to place the bets. The number of bookmakers has increased in recent years, and the advent of online betting means that we now have access to literally hundreds of them thanks to the Internet. An arb player can now get all his bets on within a few minutes from the comfort of his PC.

Each bookmaker has specialist odds compilers who set the odds for each event and sport. But due to increased international competition, they are now they are being asked to cover an ever-increasing number of events where their knowledge may not be as much as with more traditional sports.

Inevitably there will be differences of opinion between the bookmakers as to the abilities of each competitor. This leads to one bookmaker setting the odds of the favourite higher than other bookmakers, whilst another bookmaker prices the outsider higher than others.

If the odds on the favourite and on the outsider (as well as any other outcomes) are sufficiently high, an arbitrage opportunity exists!



Is sports arbitrage legal?

Sports arbitrage betting is completely legal as long as local laws permit gambling.

All that sports arbitrage traders are doing is placing bets with different bookmakers whose odds just happen to guarantee a profit overall. There is nothing illegal in that. So for us UK residents, sports arbitrage investing is a legitimate part time (or even full time) source of income!

It may be illegal for US residents to place sports bets over the Internet due to the Federal Wire Wager Act 1961. The Act states the following:

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

Whether or not the Federal Wire Wager Act 1961 applies to online sports betting is the subject of much legal debate. Some bookmakers allow US residents to bet with them, whereas others have chosen to refuse their business. It should be noted that there are a very large number of offshore sportsbooks aimed at US clientele and so this issue is a grey area to say the least!



How much money can be made from sports arbitrage trading?

That depends on how much time you're prepared to put in. The more time and effort you have (or are willing) to devote to sports arbitrage trading, the more financially rewarding it will be.

There are many websites which claim that you can make thousands of pounds (or dollars etc...!) for just a few hours work a day. Well... technically you could. But in reality, it's not as easy as that, so don't be fooled!

However I can confirm that professional traders (arbitrageurs) do make thousands of pounds per month by employing sports arbitrage. But I promise you that those full-time arbitrageurs spend a lot more that a few hours per day to make that kind of money.

So why not become a part-time sports arbitrage trader to earn a little extra money? Read on and I'll explain the pros and cons so that you can decide whether sports arbitrage investing is suitable for you.

Learn how to start arbitrage trading in Part 3

Continue to the arbitrage trading page to learn more.

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