You'll never meet a poor bookie".
Clichés as they are they do have a certain truth. Bookmaking is all about the "house edge". What this means is that the price offered to the punter by the bookmaker is less generous than the "real" price should be. In other words, if a bookie was offering you odds on the flip of a coin coming up heads he would probably be setting a price in the region of 10/11 or 5/6, when the true odds would of course be Evens.
Certainly you still have a 50/50 chance of winning the bet. But if you win the bet at 10/11 your £11 stake will win you £10. If you lose, your loss is £11. So although your chances of winning a single bet are 50%, place the same bet 100 times and it is virtually certain that you'll be out of pocket. Hence "the house edge".
Sports betting arbitrage reverses that verdict. By using different odds at different bookmakers you turn the prices to your advantage. For instance, if Bet365 is offering 6/5 on Bloggs to beat Brown in a snooker fixture and Evens is available at Betfair on Brown to beat Bloggs in the same match you can, by carefully setting your stakes accordingly, lock in a guaranteed profit whatever the outcome.
There are pitfalls - human error, last-minute price changes, cancelled bets, maximum permitted stakes being altered without notice - but the skilled arbitrageur will overcome these on balance. Of course the return each time is relatively low - any "arb" over 2% is considered a good one, so an investment of £1000 would be needed just to make £20 in profit. In other words to benefit from sports arbitrage one needs some serious starting capital.
But it does work, and many people make a living from it.
Reproduced with acknowledgements to Money Making Ideas.
