Zero-Risk Profit From Sports Arbitrage Betting
There’s a simple reason why bookies almost always prosper in the long-term. What it all boils down to is the concept of “value”.
We all know what “value” means as a basic word. However in the sports betting world it has a particular meaning all of its own.
The bookie offers a price on a particular event. Let us think about soccer for the time being, and let’s say for the sake of argument that Wolverhampton Wanderers are playing a Premier League fixture against Manchester United at United’s home ground at Old Trafford. The bookmaker offers you a price of 8/1 (or 9.00 if you are using decimal odds) for Wolverhampton to beat United.
But the bookmaker does not really believe that Wolves have an 8/1 chance of winning the game. Possibly he might consider them to be 10/1 outsiders. However by offering 8/1 to the customer he retains what he calls the house edge, which effectively is his charge for taking the bet.
Of course, if Wolves do win the match the bookie is still losing on that particular bet, but he will still have made a profit from the fixture overall. The reason for this is that the bookmaker will have built up what he calls a “balanced book”. He will, in other words, have taken enough money from bettors backing a Manchester United victory or a drawn match to pay out those who had backed Wolverhampton Wanderers.
What’s more, because he hasn’t offered the real price – remember he has given 8/1 rather than the more realistic price of 10/1 – he will retain a mark-up from the fixture. After all, the prices he will have given on a Manchester United victory or a draw will have been stingy too.
This is the theory in any case. And in practice, too, the bookmaker almost always wins because the book almost Asian Bookie balances. There are though exceptions, and freak events such as Frankie Dettori’s legendary seven-race win at Ascot can hit the bookies hard and in some extreme cases can send them out of business.
But even when dealing with a balanced book it is possible to beat the bookmaker over the long-term. This is because the bookmaker’s estimation of the likelihood of any particular outcome may be erroneous. To follow through with our own example, it may be that the real chances of Wolves defeating Man United are actually 6/1. Possibly the linemaker, a newcomer to the sports betting industry or inexpert in matters pertaining to English football, has not taken into account injuries, or the proximity of a major European match to this particular fixture.
When this takes place what we have is called a value bet. The price we are given actually errs on the side of generosity, and is in fact better than the “real” price.
In this instance the scenario is reversed. Wolverhampton still can, and probably will, lose the match. But the punter who places only value bets will over a period of time make a certain profit. Thus the expert gambler applies statistical analysis to what is on the surface of it a “science of chance” and turns it into an assured source of income.
But there is another, even more certain way of turning the generous price into a guaranteed profit. By taking advantage of it and either laying it at the true price with a betting exchange or by placing a wager on the opposite side or sides of the line with another bookmaker, it is possible to lock-in a guaranteed mark-up on the overall deal.