Hi,

I was wondering if someone could post me the formula for calculating arbitrage opportunities in sports betting?

Cheers.

Jake.

[ This Message was edited by: puntz on 2003-05-16 00:49 ]

Abitrage is when you can obtain a betting market of less than 100% so that you can back every player/team/horse/etc and you will win regardless of the outcome. Essentially this is what the TAB does on every race and what bookies try to achieve. For us poor punters arbritrage opportunities are fairly limited and ususally occur in 2 team sports/games (eg Tennis, footy, etc) where 2 bookmakers rate the teams diffently so that you back team 1 with one bookmaker and team 2 with another bookmaker to get a market of less than 100%

To work out if you have an arbitrage opportunity simply work out the market percentage for each price and add them together - if it adds up to less than 1 then you have an arbitrage opportunity.

For example lets say you can get prices of 1.95 and 2.10 for the two players in a tennis match. First work out the market percentage of each price by dividing 1 by the price. So 1/1.95 = .513 and 1/2.1 = .476 Add those two numbers together .513+.476 = .989 So in this case the market percentage is less than 1 so you have an arbitrage of around 1.1%

To work out your bet amount multiply your target win amount by those percentages you worked out. So if you wanted to win $100 you would bet $51.30 on the 1.95 player and $47.60 on the 2.1 player - your total outlay is $98.90 but you will win $100 whichever player wins.

From what I have seen the arbitrage possibilities are fairly limited and generally you will never get more than a couple of percent advantage. As in the above example you will only win a dollar or two for each $100 you bet. This means to make any sort of reasonable money you need:
1. A large bankroll
2. Accounts with lots of different bookmakers
3. Time to hunt out the opportunities
4. Be very careful about different cancellation rules between bookmakers

Also you have to consider the costs of moving your money around - for example to make $100 profit out of a 2% opportunity you need to have $5000 but you may need that in each of your 10 or 20 betting accounts. If you cant afford to leave that money sitting in those accounts then you have to deposit before each bet which can incur fees, etc

Personally when I looked at it I decided it was not worth the amount of time and hastle involved with one exception - sometimes you can get arbitrage opportunities on Betfair which are worth taking (you only need 1 account, no fees, etc)

__________________
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[ This Message was edited by: puntz on 2003-04-25 23:20 ]