# Arbitrage Betting

In a recent experience, the author had been banned from a sports betting platform, but managed to withdraw a profit of over $8,000 from their initial deposit of $200. This wasn't the only bookmaker they had success with, as they used a betting strategy based on mathematics rather than luck. This strategy is known as arbitrage betting, which involves removing risk by hedging multiple bets on different outcomes. The key to this strategy is understanding the fair odds of an event, which can be calculated using a simple formula: one over the odds equals the implied chances of winning. By betting when the bookmaker's odds are overpriced, the author was able to consistently make a profit with reduced risk.

## Arbitrage Betting (Sure Bets) explanation

Some time ago, I deposited $200 into a sports betting account. A couple of months later, I received an email from them saying that there were changes to my account and that I was banned from the platform and betting with them. By that point, I had turned my initial $200 deposit into well over $8,000, and of course, I withdrew every single cent. Once I heard that I had been banned, I realized that it was just for my sports betting account.

Shane Huang

I also did this with Point Spreads, Tab Universe, Light Brogues, and a whole heap of other bookies out there. Now you're probably thinking that this is some sort of get-rich-quick scheme or some sort of scam that is all over the internet, but it definitely is not. There's just one simple thing behind the strategy that I've used to bet on these bookmakers' sites and consistently make money. It's not luck, either. I've placed thousands of bets by now, but I still managed to consistently make money. It's just one simple principle that we've all learned in high school, and that is just mathematics.

## Mathematics - foundation of this betting strategy

There's nothing else to it. Yes, mathematics is the entire foundation behind this betting strategy, which is sometimes referred to as arbitrage betting or what I like to call positive EV betting. Firstly, we need to remove our perception of sports betting as a bad habit and a gambling addiction that people will get sucked into and end up losing a load of money. That is probably true for maybe 90% of cases, but there are people out there who have figured out strategies to be able to consistently beat them. Firstly, there's probably another one out there, which is based on pure analysis, where you analyze sports, analyze horses, and be able to bet on them.

## A coin example

That is kind of underpriced, whereas the strategy that I'll be showing today is all about the mathematical side. I would say it's a strategy that poses a lot less risk, and you can still consistently make money by doing this. So let me explain the math behind arbitrage betting. Firstly, let's go through an example of how sports betting books or bookies actually make their money. Let's say you have a coin toss, and it can either be heads or tails, with a 50% chance of it being either one. Now, the sports betting bookie allows you to bet on either heads or tails, and both of these prices have odds of one dollar and ninety cents. So, if you put in a dollar, you get one dollar ninety cents back if you're right, and you lose your one-dollar stake if you're wrong. You either make a 90 cents profit, which is 1.90 minus your initial dollar, or you lose the whole dollar if you're wrong.

Let's say there are two customers who decide to bet on this bookmaker. One person decides to bet on heads, and another person decides to bet on tails, and both of them are given odds of 1.90. So, now if it's heads, then the first customer will make 1.90 back, and the second customer will lose their initial dollar. The first customer has made a 90 cents profit, while the second customer has lost the initial one dollar they put in. This has made the sports betting bookie ten cents.

Let's say it was the other way around, and it was actually tails. Then the second customer would make a dollar ninety cents back on their one-dollar stake, and the other customer would lose their initial one dollar. Now again, the net profit for the bookmaker is one dollar, which they received from the stake that the customer lost, minus what they had to pay out, which was 90 cents. Effectively, once again, the bookmaker has made 10 cents profit. So, this is pretty much the way bookmakers always make money. Their odds are always underpriced, and the odds are not in your favor. It's just like gambling or betting in the casino, where the house always wins.

## It's the same for these sports betting bookmakers

Their odds are always not the fair price, and you're basically always paying more to get these odds. The odds should generally be higher than what they're actually offering you. If you were to do this over the long term, of course, the bookmaker would eventually win, and you would pretty much always end up losing. I said that the odds are not in your favor when the bookmakers are giving odds to you.

## How does if actually work

The fair odds and what they should be, so to calculate odds, the formula is one over the odds equals the implied chances of it winning. Let's say for heads and tails of a coin toss, it's 50-50. We all know that, right? And then let's say if it's heads, the chance of winning is 50%, which means one over the odds is equal to 50 or 0.5. That implies the odds are two, but the bookmaker is only giving you a dollar ninety. One over 1.90 is something like 53 or 55, somewhere around there, and of course, that's not the true probability of landing on heads. It's less than that, but that makes it seem like it's actually a high probability, but it's not, which means they're overcharging you.

## Now this is when arbitrage betting comes

In arbitrage betting, it pretty much comes in when the odds are in your favor. The whole concept behind arbitrage betting is that it removes all the risk because you've hedged it away. This is where you can bet on one or more outcomes at the same time, and regardless of the outcome, you're guaranteed not to lose money. You're not guaranteed to make money, but you're guaranteed not to lose, and in most cases, you are going to be guaranteed to actually win money.

So going back to the coin toss example, let's say if you bet on heads, the odds were 1.90, but it was 2.50 for tails as well. So both these odds are 2.50, which is actually a very good price. If you bet one dollar on heads and one dollar on tails, you get $1.50 if it's heads and you get $1.50 if it's tails, but you lose the dollar from the other bet. Either way, you've guaranteed yourself a profit of 50 cents. This is a way of guaranteeing yourself a risk-free profit, and you haven't actually had a view on the outcome, and you've made money regardless of the result, whether it was heads or tails.

## Your guaranteed profit can be even larger

Let's say instead of betting one dollar, you bet a hundred dollars on each side. In that case, you would be guaranteeing yourself a $50 profit. We all know that the probability of a coin toss is 50/50 for either heads or tails. Unless the bookmaker was stupid or had made a mistake and wanted to go bankrupt, they would never give you a price that was over two dollars. The odds they give you will always be less than two dollars because that is where they have the edge, and that is how they get you. The example where I said the odds would be 2.50 for a coin toss would never actually happen, but this is where it gets interesting.

## Sports events where the probability of events happening is not certain

What about all these sports events where the probability of events happening is not certain? No one actually knows, for example, in the Euros match between France and Switzerland, what the probability of France winning is. Some people might think it's as high as 80%, whereas others might estimate it to be around 60% or 70%. Like, no one knows for certain, and this is where different bookmakers have varying views on their probabilities, and therefore offer different odds regarding which team is going to win, or all the outcomes of the game. For example, in France vs Switzerland, and draw results, you can see that the odds between France and Switzerland on the TAB bookmaker's site are different from the odds you might get on the France vs Switzerland on the sports bookmaker's site. Due to this difference, we can find better prices for each of these outcomes. In this case, we will choose to bet on France on TAB and we could choose to bet on Switzerland and draw on Sports Bay. But even then, this doesn't guarantee that there will be an arbitrage. There actually needs to be quite a significant price difference before you can get to that arbitrage level where you can guarantee yourself a profit.

## When the total implied probability in both cases this is greater than 100%

Let's explain the outcomes and probabilities of, for example, this situation. The total implied probability is one over each odd, so one over the France win odds, plus one over the draw odds, plus one over the Switzerland odds, and that's the total implied probability. In both cases, this is greater than one hundred percent, which means the bookmaker has the edge, and that extra amount over the 100 is how much they're taking off their customers. Now, if you, for example, tweak it and instead of using all the odds on the same bookmaker, choose the highest odds from different bookmakers depending on the result for each individual result. Then you get something a little bit less, but it would still not be categorized as an arbitrage. Let's take a hypothetical example of a game between Djokovic and Medvedev. Let's say the first bookmaker thinks it's a 50-50 chance of Djokovic or Medvedev winning and it's a very close game. Your odds of Medvedev and Djokovic are 1.90 for both players. Whereas the second bookmaker thinks Djokovic is a strong favorite, they're priced at 1.40, whereas Medvedev is priced at 2.50. Once again, for each of these individual bookmakers, if you find the implied probability sum, it's again greater than 100. But what you could see now is if you wanted to bet on Medvedev, you would just bet on Medvedev on bookie number two, and you would bet on Djokovic on bookie number one because the prices are better on those sites for the respective players to win.

## Arbitrage calculators online

If you perform this implied probability calculation, you will get a value less than 100. This is where arbitrage opportunities arise. There are online arbitrage calculators that you can use, or you can create your own in Excel. They will inform you if there is an unbiased arbitrage opportunity available. Then you can place bets on both players and guarantee yourself a profit. However, you can also do a biased arbitrage, also known as a no-loss arbitrage, if you prefer better odds. For instance, if you truly believe in Medvedev's chances of winning, you can bet on him and still not lose even if Djokovic wins, because you have hedged away some of that risk.

You might be skeptical and think that this is too good to be true. But there are always events taking place such as soccer, tennis, cricket, rugby, AFL, horse racing, and dog racing. There are always mispricings from different bookmakers. There are many bookmakers that you can exploit and earn a significant amount of money each week. If done correctly, it is entirely risk-free. However, keep in mind that this is only the surface of arbitrage betting and the examples provided are just the most fundamental foundation.

## More examples

You can get a lot more context to this. For example, let's say there are seven horses in a race, or when you're doing multis, it gets a lot more complicated than this. So I highly recommend you do your own research before you actually put any money into it. This is not financial advice or anything. This is just sharing a mathematical strategy to demonstrate that mathematics is probably something useful that you want to learn if you want to make money.

## Use Shrap Odds Maker to find arbitrage in football

Here is an excellent free tool that can help you find arbitrage odds: Shrap Odds Maker. By using Sharp Odds Maker, you can easily compare hundreds of odds from 25 top bookmakers for every football match. There is also a Sure Bets tab where arbitrage odds for every match are listed and colored in blue. The application is free to use. You can also place bets for free and test your betting strategies. Additionally, you can compare bookmakers' profit margins. If you are successful in sports betting, you can share your tickets and put your latest tickets behind a paywall.

## Be careful - it's very easy to make mistakes

It's definitely a viable option, but it can also be very easy to make mistakes. For example, the odds might change really quickly, and suddenly you've lost your arbitrage opportunity, or you might have a betting limit that you didn't realize, like in their terms and conditions where they might say you're only allowed to bet $200 at this price. There have even been times when I've made mistakes myself, like this one time when I started betting. I accidentally placed a bet on the wrong horse, and I ended up losing a few hundred bucks from that. Ultimately, though, if you were to pursue something like this after you've done all your hard work and research, there's only one problem that you're going to face. That is, you'll eventually and inevitably be banned from these bookmakers because you're making too much money off of them. For instance, in my case, when I started betting on sports, I turned a $200 deposit into over $8,000 within a few months. That's probably over a thousand percent return on investment, and it's something you can easily attain. But by that point, luck has phased out.

## Conclusion

Their odds are not always the fair price and you're basically always paying more to get these odds. The odds should generally be higher than what they're actually offering you, and if you were to do this over the long term, of course, the bookmaker would eventually win, and you would pretty much always end up losing. I said that the odds are not in your favor when the bookmakers are giving odds to you.

Shane Huang