Money for nothing**NB – some level of risk involved
The more serious punters among you will be familiar with the concept of ‘arbing’. Joseph Jackson decide to put the theory to the test to see if he really could make risk-free profit. He did – and plenty of it too – but arbing is not without its risks. Proceed with caution…
“Arbing is for wimps!” That's the blunt view of Professor Leighton Vaughan Williams, the UK's top academic expert on betting and the gaming industry.
Now, I won't go as far as to agree that I'm a wimp, but I know my attitude to risk and I prefer to avoid it if I can. Arbing, or sports arbitrage if you like to be formal, is the technique of betting on all outcomes of a sporting event, and exploiting the different prices between different bookmakers. The result is a risk-free bet, and risk-free betting has an appeal.
The professor is being sniffy because arbing is not about looking for value and taking on the bookmaker with your superior judgement. Arbing is not about your knowledge, or passion, and putting your money where your mouth is and lumping on. You can arb with no knowledge of the sport or the participants you're backing.
You're never going to get that big win with an arb. It’s a percentage game – 1% to 5% of your total stake usually – and it can be likened to investing and tax efficient saving. Arbers can make money, but they need a decent sized bankroll and to execute a lot of trades. They make money by keep rolling over their bankroll and can look at getting between an 8%-12% return on their money each month.
I'm writing this because a summer of sport, kicked off by the World Cup and Wimbledon, promised a good opportunity to test the arbing theory. Can you really make risk-free bets, and is it worth doing?
Well, the first thing you should know about arbs is they don't hang around for very long. You can find them for yourself, but the growth in online betting means there are online arb services that trawl the web for you for a fee. For my experiment I enjoyed the services of Sports Arbitrage World (sportsarbitrageworld.com) and RebelBetting (rebelbetting.com) but there are others. Both offer trials to assess their stuff and have really detailed guides on how to start.
Rajeev Shah, the founder of Sports Arbitrage World, points out that though arbs don't hang around, the opportunities for them are almost endless and always renewing themselves event after event. “While there are times when various bookmakers' odds are the same on a particular event, there are many occasions when their views and, therefore, the odds they offer are very different.”
Just so you grab the idea of an arb, here's an example of a two way bet. Say Team1 at Bookie1 has the odds 2.05 and Team2 at Bookie2 has the odds 2.05. If you bet £500 at both bookies, you win £25 regardless of which team wins – £1,025 returned after betting £1,000. It’s a 2.5% return on your investment.
If it’s so simple, why don't more people do it? Apart from gamblers who'll probably think it’s the boring opposite of what they like to do, making money by arbing requires patience, organisation and putting in some hours learning how to do it.
Here's a genuine example of nice fat arb that popped up as I'm writing. Interwetten is offering 2.50 on Jarno Trulli not finishing the British Grand Prix. Betway has him at 1.85 to finish. It’s a 6.32% arb. If you bet £425.29 at Interwetten and £574.71 at Betway you'd come away with £1,063.22 no matter how Trulli fared.
The arb illustrates many issues surrounding the ease of arbing I have encountered. Any arb over 5% should start alarm bells ringing – if one of the bookmakers has made a mistake, a palpable error, it will void the bet. This will bugger up your profit and you'll have to scramble around to find another sports book and get some money on to limit your loss. Both Sports Arbitrage World (SAW) and RebelBetting warn users when they think an arb is a ‘palp’, and in this case SAW thinks it’s okay. But it’s worth checking how out of line the sportsbooks are with other operators.
Simon Renström, chief executive of ClaroBet AB, the Swedish company behind RebelBetting, says spotting palpable errors is something you'll get better on with experience. “If it sticks out too much, it's probably a palpable error. In general, if you're unsure about an arb above 4%, don't bet on it, or try with just small sums.”
The next obvious thing is you don't bet with £425.29 or £574.71. Among arbers there's a belief that the bookies hate them – some do, and some don't care as you'll be winning and losing across your accounts – but don't make things obvious by betting pence to balance an arb. In this case a round down to £425 at Interwetten and up to £575 at Betway would be fine and doesn't mess up the arb at all.
But the most annoying thing about the opportunity, and one that's occurred regularly through my short arbing experience is that I don't have an account with Betway. And from this experience I know there's no point trying to rush and open an account and deposit £600 because the arb will be long gone by the time I've done this. And to top this, my Interwetten account needs reloading.
To arb, you need to be organised and know exactly where your money is at all times. You need to open 10 to 20 bookie accounts for starters, fund them, keep track of where your money is, and have your funds available and in the right place. You need your bank account, credit cards, and internet wallets ready to roll.
But one of the great things about arbing is it allows you to grab the bookmakers introductory free bets and offers and keep them. Betway, for example, will match your first bet up to £25. If you're not losing on your bets it’s money in the bank. It’s also simple to scalp the bookies which offer 20% bonus on your initial deposit, but make you wager your deposit through 10 times before you can withdraw – you just keep arbing with them, even 0% arbs you wouldn't normally touch, to make sure you're not losing your bets.
“With arbing you can easily bet on several secure low arbs just to get the bonuses. And you'll get a small arbing profit on top! We Rebels always win,” says Renström.
SAW and RebelBetting staff all use their company software because they believe they can give a better service this way.
Renström says even backing arbs as low as 1% can be very profitable. “They are so safe that you can place a lot and never fear getting voided. You need more volume, but fortunately there are a lot more of these lower arbs. And it's probably less chance to be limited by the bookmakers.”
His colleagues Lars and Björn have a low arb betting strategy. “They still make 9-14% every month. The percentage was almost 20 in the beginning (with a lower bank roll, bonuses and no limits).
“We all make good money from it. Our motto from the start has been: ‘eat your own dogfood’.”
Tasty. But you know – I'm just finishing up and that Grand Prix arb is still available. I've registered with Betway, loaded up Interwetten, and bagged Betway's £25 introductory bonus. Sweet.
HOW DID I GET ON?
The headline figure is my profit is £831.85. If I'd put in a little more time and been a little better organised I would have topped £1,000 easily. I've been using £2,500, so am very underfunded and most of my profit is from scalping the bookie bonuses. I've wagered £4,091.98 so I'm getting a 20.33% return on my bets, but a 33.27% return on my bankroll. In around six weeks.
I've bet on Wimbledon, and smaller tennis events. World Cup soccer as well as US, Norwegian and Finnish leagues. I've bet on Twenty20 cricket and motor racing. I'm just about getting to the level where I'm comfortable putting down £1,000 in one arb, but I have made mistakes.
Doing an Asian Handicap arb on the Spain v Chile World Cup game caused a problem. Pinnacle accepted my bet on Chile +1 at 1.96, and Victor Chandler took my stake on Spain -1 at 1.95; £50 on each side as part of my training. Pinnacle cancelled without emailing me – saying I hadn't verified my email. But its marketing department had been managing to spam me at my email address quite easily. I could have been exposed on one side of the bet but Victor Chandler kindly voided that side claiming a palpable error. They didn't warn me either; a narrow escape with no loss.
Backing the 2.5 goals over and under market in the UEFA Europa league match between SC Faetano vs FC Zestafoni led Bwin to limit my stake. I only found this out after having placed a correct bet with Betfair. Stan James had to step in, at slightly worse odds, to make sure my arb wasn't unbalanced.
Other hassles have been Santander blocking all my payments to sports books for security reasons and Moneybookers freezing my account for yet more security reasons. I never said it would be easy.
• Practice with at least 100 low-stake arb bets before stepping up your limits
• Have one specific arb bank account, one credit card, and at least two credit card wallets
• Start off with 10-20 bookmaker accounts to make sure you can access the arbs
• You should achieve 8%-12% monthly return on your bankroll
• It is simple to back arbs at an average of 2.5%, but following 1 percenters can lead to profit.
• Watch out for arbs above 5% – they could be palpable errors
• £2,500-£5,000 will get you started
£10,000-£15,000 is good for part-time trading
£25,000-£30,000 is a full time bankroll
Professionals operate with up to £150,000 in play