Sports Arbitrage

Sports Betting Arbitrage, or Scalping as sports bettors from the US know it, is the combination of a well known financial trading concept and the modern occurrence of online sportsbook betting. Arbitrage is the idea of taking advantage of different prices in different markets simultaneously, while sports betting arbitrage is the application of that principle to the ‘price’ offered by bookmakers on sporting events: the’ odds’, or ‘the line’. Essentially, Sports Betting Arbitrage is buying the win and the loss of a sporting event at the correct price to ensure that no matter what the outcome, a profit is secured.

As with standard arbitrage, sports betting arbitrage must be done in separate markets: Any two bookmakers with differing odds will do. While the financial concept of buying and selling at two different prices is accurate, for standard betting it is confusing (in a two team event, the bookmaker is buying the win for one price, and selling the lay for a higher price), and so I will stop trying to maintain the comparison here.

In order for an ‘Arb’ or ‘scalp’ to be placed, you need one bookmaker to offer particularly high odds on Outcome 1 and a separate bookmaker to offer particularly high odds on Outcome 2, where there are only two outcomes available. If these odds are high enough to create a larger than 100% return on investment, you have an arb.

For example if a particularly close Tennis match between ‘John’ and ‘James’ is about to be played and Pinnacle offers odds of 2.1 (11/10) on John while Expekt offers odds of 2.05 (20/19) on James, you can very easily see that you have an arb. If you bet £100 on 2.10 and £100 on 2.05, you know that you are going to lose £100 because one side will lose, but the other side will win more than $100, thereby covering your loss, and making some money in the process.

A more complicated example:

Ladbrokes has odds of 1.10 on Team A and 8.00 on Team B

Blue SQ has odds of 1.20 on Team A and 5.00 on Team B

If you bet £835 on 1.20 at Blue Sq, and £125 on 8.00 at Ladbrokes, then your total investment is £960. If Team A wins, you win £1002 and lose the £125 bet at Ladbrokes, resulting in a £42 final profit. If  Team B wins, you win £1000 and lose the £835 bet at Bkue SQ, resulting in a £40 final profit.

No matter which team won, £40 profit was assured. That is the idea of Sports Betting Arbitrage.