Arbitrage Betting - Guaranteed Profits

Is there anything like risk free betting that will provide guaranteed profits to punters? Well, many would say that sports arbitrage betting is your path to glorious riches. This page, however, will offer you the truth about this technique known as scalping.

Scalping bookies or middling bookmakers has been around for a while. Only with the advent of the internet has it become the holy grail of risk free betting. The reality is far different. Whilst in principal you could make a serious tax free income from arbitridge betting, there are very few who actually do so.

Bookmakers operate a book on an event. They provide odds for a win, loss or draw. Since bookies must make a profit their book has a certain % built in so that regardless (in theory) of which team wins the bookmaker takes his 10-15% of the total money that's gambled on the event.

For instance: Team A plays Team B. Both teams are totally equal. Nobody can pick between them. In reality they have odds of 1/1 or 50%, the total % for the event being 100%. A generous bookie might offer odds of 10/11 for either team to win. Obviously this is less than the true odds and so the bookmaker can profit from events.

What is Scalping or Arbitrage?

This involves looking across various bookmakers and trying to identify an overbook - where the total % for all combinatios of an event is less than 100%. If on converting the decimal odds/fractional odds to % and adding them up it reaches say 95% then you can make a guaranteed profit, regardless of which team wins. This is what many people call zero-risk betting. Unfortunately IT NEVER IS zero-risk.

On identifying a 'zero-risk' opportunity there are various things that can go wrong:

1. You place one bet at a bookie and at that moment the other bookie changes his odds and you are left with a potential loss. This does happen, even to the best zero-risk betters. Your computer might crash aswell and you can't manage to get the other bet on. With arbitrage you are betting several hundred at a time (well those who want to profit are doing this) so potentially any prior profits could be wiped out in a moment of computer glitching.

2. Book makers might renege on the odds they gave for an event - its happened many times before. A bookie after you've placed both your bets could email people saying those 11/8 odds where in fact 8/11 leaving you up the creek with a loss.

3. If you are trading in various currencies, these can and do fluctuate. Your zero-risk may turn into a loss due to large changes in the exchange rates. Just lok at the 6-month trend of the $ to the £ from late 2003 to early 2004 as an example.

Costs

Finding arbitage opportunities on your own is hard. In fact, you can spend an age looking manually. There are various services on the net that offer you software that helps. But these don't come cheap.

Of course, the costs of these range from 30 quid a month to 150 quid a month. This means for you to realistically have any chance to make a worthwhile profit you will need a large starting bank AND to be able to place large bets - typically several hundred dollars each side to make 2-10 bux an event. Think how much time is needed to recoup monthly costs. A lot of arbitrage opps only exist for minutes, some for a few hours though. Typically they are usually around 2%. For every 100 quid you can expect 2 quid guaranteed return.

It's not for the guy placing 10 quid on either side. At that rate it would take you forever to make money.

Some people do make a living from sports arbitrage scalping, but these guys are doing it several hours a day and have large banks of upwards of 20,000 to begin with. They are using the top-end service on the net that charges over £100 per month - I can atest that they do provide many arbitrage opps, but you do need a large amount to start with.

My advice is to avoid bothering with joining any risk-free services unless you have a large bank and understand that risks do in fact exist.