Arbitrage Betting Case Study

Improved Essays
Arbitrage betting, sometimes known as sure betting, is betting with a guaranteed profit. These bets are rare, but they can be found through errors from the bookmakers and through comparing different bookmakers odds for a certain match. Covering all possible outcomes of a match and receiving a profit regardless of the result, is an arbitrage bet. vspace{12pt}

Consider a football match, there are three possible outcomes, either of the two teams winning or the match ending in a draw. Below in figure 1 are example odds given from three different bookmakers covering all three outcomes of a certain match. For each of the bookmakers odds, no errors have been made, so there are no opportunities for an arbitrage bet if you bet on all outcomes with
…show more content…
Bookmaker 1 earns a percentage profit of $6.96\%$ using these odds. Similarly, with bookmaker 2 and bookmaker 3 their percentage profit is $3.78\%$ and $6.24\%$ respectively. To see whether there is an arbitrage bet within the odds given in the table consider placing bets with more than one bookmaker covering all the possible outcomes of the match. Logically, take the largest odds for each outcome and see whether their inverses add up to a value less than $1$. In this case the largest odds for outcome 1 is with bookmaker 1, the largest for outcome 2 is with bookmaker 2 and the largest for outcome 3 is with bookmaker 3. Taking the inverses of these odds:vspace{12pt}

egin{equation} otag 2.8^{-1} + 2.9^{-1} + 3.6^{-1} = 0.9797 end{equation}vspace{12pt} This shows, even though each of the bookmakers odds individually ensure a profit for themselves, placing bets with all three bookmakers using the odds shown above, a profit can be made as the value above is less than $1$. The last thing required to perform an arbitrage bet is to calculate how much to bet on each outcome to guarantee a return profit. Betting a total stake of pounds100 over the three outcomes, not just placing a third of it on each outcome. The odds are divided in relation to the values of the odds. vspace{12pt}

egin{defn} hfill \
egin{itemize}
item $b_1 =$ bet on outcome 1 (Team A Win) item $b_2 =$
…show more content…
There is no obligation saying you must bet on draws, in theory, one could bet on any of the three outcomes as long as the odds being offered are above the 2.618 threshold. In the 2014/2015 English premier league the rate of a draw was 24.5 percent, almost 1 every 4 matches. Strictly going by this figure the Fibonacci Betting System will pay out approximately every 4 games. That is not to say that it will not go much past 4 matches. The main drawback for this progressive betting system is if one were to be unfortunate and not have a success for a large number of matches then the stake sizes increase exponentially. The 21st number of the Fibonacci sequence and therefore the size of the 21st bet would be pounds10,946, which is very large considering the first bet was just pounds1. One could be unlucky enough to have a losing streak like this and not have the capital available to continue the betting sequence, therefore, losing all of the money bet before totalling pounds17,710. There is an up side of the stake sizes increasing, it also returns greater profits. The 21st bet with odds of 3.5 for a draw and ending successful would return pounds38,311, a total profit of

Related Documents

  • Improved Essays

    Who’s to say that Sims wouldn’t have picked the Gamblers if he knew all the information regarding both negotiations? The problem is, no one knows because Argovitz never told him all the information an agent should have communicated with his…

    • 870 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The benefits of this are that if you are lucky one month, you may be able to pay off your debts earlier. The downside is that you may lose $50 every month. The other downside is that you need a fair amount of discipline to pull it off. Many people will be tempted to keep on gambling after winning, to deposit more money, or to play again with the money they won.…

    • 1107 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Pascal's Wager Essay

    • 1056 Words
    • 5 Pages

    Most of these notes were scattered or illegible. The topic known as Pascal’s wager…

    • 1056 Words
    • 5 Pages
    Great Essays
  • Decent Essays

    That is not what Bob Rothman seeks to do with his horse racing advice. In fact, the information shared has formed Bob's own…

    • 410 Words
    • 2 Pages
    Decent Essays
  • Improved Essays

    Baseball is a popular sports in different parts of the world, but when it comes to betting for baseball, one discovers a different story. It seems that betting in baseball is not as popular, and it usually takes a backseat to common sports betting like auto racing, football, tennis and basketball. The level of popularity of baseball betting may not eclipse that of football or basketball, but there’s no denying the fact that betting in this sport can also become an exciting and enriching experience. Here are ways on how you can maximize your bets the next time you participate in a baseball betting. Money Line in Baseball When betting in baseball, you will come across the concept of a money line.…

    • 514 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    --------------------------------- Staking Wise----------------------------------- When theres a clear winner il suggest it, but trying to narrow 1 winner out of 12-16…

    • 712 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Fan Duel

    • 816 Words
    • 4 Pages

    Write a one paragraph summary of the article This article discusses the advent of daily fantasy sports websites, like Draft Kings and Fan Duel, and why these websites are legal, but the direct betting on sports is illegal. These websites have values of over one billion dollars and are currently completely legal. They operate similarly to casinos; big payouts for little investment. Althought these websites have generated a lot of winners, they have generated far more losers; again, this pattern looks similar to what is seen in Las Vegas casinos.…

    • 816 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The Big Short Story

    • 573 Words
    • 3 Pages

    “The Big Short” portrays a story of a four individual outsiders working in the world of finance in Wall Street, New York who predicts that the credits and housing bubble will collapse soon before anyone else does. At that time in the US, banks were lending out mortgages to people who could not afford housing and dealing with high risky lending rates meanwhile, the citizens were not paying back their loans from banks. So these few individuals thought maybe if they beat a large sum of money by betting on the market collapsing they would make a bunch of money and they did. Money can be made in many ways through having a job, owning properties, etc. However, these four individuals use a technique call “short”.…

    • 573 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    According to Brian Kongsvik, help-line director for the Florida Council on Compulsive Gambling, only 5% of their callers are sports gamblers. Clearly, the vast majority of sports gamblers don’t end up pathologically addicted, but when it happens, it can be one of the most devastating forms of gambling. According to Brian Kongsvik, sports gamblers represent 56% of their callers with gambling debts over $90,000. That’s why it is critically important for sports gambling to be fully legalized. Yes, that may seem counterintuitive at first, but the vast majority of people are hesitant to ask for help when they’re involved with illegal and stigmatized activity.…

    • 789 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Models are not required, but almost every successful gambler uses at least one. If you are sports betting without an edge, you are flushing your money down the drain. There has never been anyone in the history of modern sports betting to be profitable long term without a model. You have to be dedicated to the craft and you must be willing to put in the hours. Maintaining an edge over the bookies is something to be very proud of and is a…

    • 814 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Betting Vs Bookies

    • 1205 Words
    • 5 Pages

    When you gamble online, you are betting against a bookie. They produce odds that show how much you will be paid if you win. These odds are manipulated to ensure the bookie cannot lose, and they may even use the odds to affect which bets you place, since unlike investing, you have a choice on how much you place on each bet. When you invest, you do not have a choice of how much a share costs, though you do have a choice around how many of them you buy. When you buy shares, you are not putting your money against a bookie, which is a point in your favor.…

    • 1205 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Bridgewater Associates Bridgewater Associates, which is based in Westport, Connecticut, was founded by Ray Dalio in 1975. He operated Bridgewater out of his two-bedroom apartment. The American investment management firm manages approximately $160 billion in global investments. His clientele include foreign governments and central banks, corporate and pension funds, university endowments and charitable foundations. Bridgewater Associates is now the largest hedge fund in the world.…

    • 1339 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    Life Of A Gambler Essay

    • 1038 Words
    • 5 Pages

    The achievement is important to the gambler for they do not see how the consequences add up for the goals shadow these views. I think almost everyone could agree that winning the lottery would initially feel really good, but the after math could be unbearable considering the historic trends of lottery winners. Being on top isn’t necessarily always the place you would want to…

    • 1038 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    People often make bad decisions that makes them regret afterwards. For example, People gamble and lose all of their money, make bets on things that they are not a hundred percent sure of. We can see such examples from people’s life experience and from many movies and various literatures. In the short story “The Bet”, Anton Chekhov wrote about two gentleman who make bet on whether life imprisonment or execution is more moral than the other. The lawyer, who went to prison tried to prove that going to prison is better than execution, later regrets making the bet.…

    • 1146 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Betting In Popular Sports

    • 1500 Words
    • 6 Pages

    Betting is a way to not only liven things up but also ensure that fans get the best bang for their bucks as they watch their favourite club play about, betting in such cases is however illegal in most countries which makes it a problem considering that the fan base of football, especially club football is pretty gigantic and the betting restrictions in such cases make it impossible for these fans to join in, now there is a way they can partake into the action by placing the bets on their favourite teams and enjoy the matches as well as win big money with the fun88 online casino and betting…

    • 1500 Words
    • 6 Pages
    Improved Essays