Sports Betting Arbitrage and Sportsbook Scalping

Slightly different to the buying and selling of a product or concert tickets, sports betting arbitrage relies on the possibility of 'buying' odds at different prices from different bookmakers so that a guaranteed profit can be locked in.

Put more simply, by backing all competing sides of a sporting event at different bookmakers using the highest odds available, you can set up a situation where each outcome will result in winnings greater than the total amount risked. This possibility arises from a difference in opinion about the fair odds of the event by bookmakers, and one bookmaker has given the favourite higher than usual odds, while the other bookmakers has given the underdog(s) higher than usual odds. Individually neither bookmaker will make a loss, however if you take the combination of the two or more higher than usual odds, it may be possible to bet on all outcomes so that no matter who wins the sports event, your winnings will cover all bets completely and return a profit.



For example:
Pinnacle Sports has odds of 1.10 on Team A and 8.00 on Team B
BWin has odds of 1.20 on Team A and 5.00 on Team B

In order to help you understand exactly how arbitrage works, the following list shows you what needs to be wagered to win $1000 from the odds offered on this game:
Pinnacle Sports
1. $909.10 on 1.10 wins $1000
2. $125.00 on 8.00 wins $1000
BWin
3. $833.35 on 1.20 wins $1000
4. $200.00 on 5.00 wins $1000




Looking at those numbers you can clearly see that backing both possible outcomes at Pinnacle will cost you $1034.10 and you will only win $1000, hence costing you $34.10. Backing both sides at BWin will cost you $1033.35 and you will still only win $1000, hence costing you $33.50. So clearly both Pinnacle and BWin have set their odds well, they will make a profit no matter who wins.

However, if you backed the underdog at Pinnacle (8.00) and the favorite at BWin (1.20) you would be placing only $958.35 in order to win $1,000. That is a guaranteed profit of $41.65. No matter who wins, you will win $1,000, and you will have only outlaid $958.35



This example demonstrates a number of things. Firstly, all bookmakers have their odds set so that if you back both sides, you will certainly lose. This is where their profit comes from. They basically set up their own arbitrage in every sporting event and then monitor the betting so as to keep bets for both sides balanced and their arbitrage certain. Arbitrage for the average person will only ever occur between two independent bookmakers who for various reasons have different odds for the same event. Find 100 bookmakers, take the best odds for team A, and then best odds for team B, and there is potential for an arbitrage trade.