Arbitrage

was just wondering if anyone has tried this, and what comments they have for doing this?

im thinking of when i have a big enough bankroll, coupon arbitrage with vegas books. how many books are there in vegas within a close proximity to each other? assume a 3 mils radius for example, at the most densely book populated area in vegas. im not 21 yet so i not been to vegas, just a rough guess will be cool though. :)

That is a very viable advantage play, which I think doesn't get as much coverage as it should. The people doing it I'm sure are happy about that. You need a huge bankroll and a team of runners to do it properly. The margins are also very small. From what I know about it, usually such operations will bet a game one way in Vegas, and the other way offshore. It would be much more profitable, in my opinion, if you combined this with intelligent handicapping.

Man, I have learned SO MUCH since this forum started.

Arbitage? Wikipedia to the rescue. Although I quickly got the jist of it, a link lower in the page sent me to a specific page that had lots of good info: http://en.wikipedia.org/wiki/Arbitrage_betting
Notable is the first paragraph, and in particular, the part I highlighted:

Quote:

Betting arbitrage, miraclebets, surebets, sports arbitraging is a particular case of arbitrage arising on betting markets due to either bookmakers' different opinions on event outcomes or plain errors. By placing one bet per each outcome with different betting companies, the bettor can make a profit. As long as different Bookmakers are used for arbitrage betting the Bookmakers do not have a problem with this. Each Bookmaker will still make profit due to their calculations.

Wiz -
I assume that this is different than hedging because the ofsetting bets are done in a manner where a profit is guaranteed. Hedging merely reduces loss.

Quote: DJTeddyBear

Wiz -
I assume that this is different than hedging because the ofsetting bets are done in a manner where a profit is guaranteed. Hedging merely reduces loss.

I know one of my The Ten Commandments of Gambling is "Thou shalt not hedge thy bets." However, in the case of sports betting, I would make an exception. Hedging is making a bad bet to lower risk, usually to ensure a profit. For example, taking "even money" on a blackjack. Arbitrage is locking in a profit in sports or financial markets, where the edge is not quantifiable.

I've done arbitage betting online on a very small scale. It definately works at it's about as good a sure thing as you'll ever do. The problem with doing it right online is you have to have a lot (dozens) of online accounts to make sure you get the best opportunity to see spreads on both sides of games. You also have to have a larger bankroll doing it all online, since the money you win at one book isn't quickly available for you to use at another. It would be much easier if you could do it all on the strip or mostly on the strip because of the easy access to your cash winnings.

It does work though.

I like the convenience and access to your money of betting in Vegas too. However, from what I've gathered from people who do it, such opportunities don't happen often.

I think the only offshore account you would need is Pinnacle, which takes big action, and you often get good value on favorites, while you get good value on underdogs in Vegas.

This isn't exactly on-point, but it's close enough that I'll put this here instead of creating a new thread...

I'm a politics junkie, and I'd like to make a number of wagers on races and ballot issues before November. Is there anywhere I can go that will book that kind of action?

I hate to disagree with the Wizard, but there are arbitrage opportunities almost every day if you have enough accounts and time to watch them. The more accounts you have, the better chance of finding one. Most are during soccer and baseball season, but it really doesn't matter since you don't have to know a thing about sports to make it work.

Here's an example for today(at this minute):

Chicago Sox @ Detroit (MLB)

Pinnacle has Detroit +104
TitanBet has Chicago -101

Bet $1,000 on each side and if Detroit wins you lose $1010 and win $1,040.
If Chicago wins you lose $1,000 and win $1,000

Milwaukee @ Chicago Cubs

Pinnacle has Mil -115
LuxBet has Chicago at +140

Bet $1,000 on each side and if Mil wins you lose $1,000 and win $1,000.
If Chicago wins you lose $1,000 and win $1,400


Many times you can find both sides beind an underdog, which means you are a guaranteed winner, instead of the above cases where you either win or push. When I find the underdogs on both sides, it makes me smile a lot :)

Quote: Zcore13

I hate to disagree with the Wizard, but...

The original question was about artbitrage strictly in Vegas, which I said is hard, and stand by it. You make a good point that you don't have to use Vegas as just one side, but can do it entirely online. While I didn't say that, I don't think I said the opposite either.

That is quite a spread on the Mil/ChC game, by the way. Here are the lines now:

Pinnacle
--------
Mil -115
ChC +108

LuxBet
------
Mil EV
ChC -120

Still a good middle, but Mil has moved quite a bit since your post.

Boxing is a good place to look for arbitrage opportunities. Prop bets will also yield results, but limits tend to be pretty low, you may find it's not worth your time to run around town to lock in a $40 win on $1000 of action.

Additionally, arbitrage isn't always as riskless as it looks. Lines move, and you can sometimes get shut out of the bet you want to make.

I think in Stanford Wong's sports betting book he points out that when you find an arbitrage opportunity, then by definition one side is almost always inefficient and therefore +EV. If you put in a little legwork handicapping you can often produce a better return.

Alas, Wiz, for those of us in the USA, Pinnacle is unavailable...

Quote: SolidAU

Alas, Wiz, for those of us in the USA, Pinnacle is unavailable...

There are back doors. The main one is using an "agent" who is registered outside the US. Someone correct me if I'm wrong, but the way it works is the agent pays Pinnacle some access to fee to book bets via their web site, but the agent (bookie) is the one booking the action. The hard part is finding the agent, but it isn't that hard.

Ok good Wizard... I didn't really disagree with you then. I didn't really want to :)

Yes, the lines move fast and when you find a good one you have to jump on it right away. Some of these sports books don't have a ton of money going on the games, so if someone or a few people bet on one side it changes the numbers drastically.

Another side note to the arbitrage using online books. To do it the right way you have to be from another Country other than the U.S. Many of the good sports betting sites that you would have to use don't allow U.S. players.


Some day when they open up sports betting and probably online poker to all U.S. players, I'm going to town with this stuff :)

Quote: Wizard

The hard part is finding the agent, but it isn't that hard.

The hard part is finding one that doesn't end up ripping you off of the $15,000 you have on account with them!

Quote: Zcore13

The hard part is finding one that doesn't end up ripping you off of the $15,000 you have on account with them!

I sense there is a story behind that remark. I'm all ears, if you have the inclination to tell it.

Quote: rdw4potus

I'm a politics junkie, and I'd like to make a number of wagers on races and ballot issues before November. Is there anywhere I can go that will book that kind of action?

I think what you are looking for is a Prediction Market. You can even bid on a bet on rainfall in New Jersey... although I think that the market (Weather Bill?) requires a deposit of one million dollars to open an account. I always wondered how the market would thrive when weather reporting stations are often volunteer operated and have few safeguards against someone taking a garden hose and spraying a rain gauge in the middle of the night.

One guy analyzed the Same Sex Marriage Ballot Measure in Maine and decided that many who had emotional views on the issue were misjudging the conservative nature of the population and he bought what were essentially futures on the election results. That guy had turned his initial fifty dollar deposit into fifty thousand and stood ready to reveal his entire history on that Prediction Market site. He was, I believe, a physicist and developed much of the Prediction Market software.

As for Risk Arbitrage in Vegas Sportsbooks... The M Resort allows personal computers in their sports book, one of the few places that does so. I've used the analogy before but I think this is a good time to repeat it: Risk Arbitrage can be like picking up pennies in front of a steam roller. You have to be nimble, you can't look at that steam roller ever, but you only have to forget about it once! Some people have often made bets with books as soon as the line opened ... because the initial odds are often deemed to be not what the bettors think but what the bookie hopes they will think. Oddsmakers can be wrong or out of touch with events. You can see this in the commodities markets sometimes. The "oddsmakers", oops, major financial investment advisers, announce their opinion that the world sugar market will open down three cents and it opens instead at up ten cents which is the daily limit. Or you get a situation such as May of 1963(?) where the market opened down the limit and did so for ten successive days. Just think what someone who was slow lifting a leg did? That is, he got ONE side of his arbitrage bet down but didn't get the other side down in time.

Some of this stuff is like that One Million Dollar insurance policy on Betty Grable's legs. Yes, the movie studio did indeed take out that policy, but in the Re-insurance market they were quick to make sure ten separate companies carried the actual risk. I think you can read some of the Lederer biographies in the poker world and see what some of these people do. Massive amounts of privately raised money with zillions of phone calls and dozens of runners in Vegas and New York. Cops even raided the place once thinking it was a bookie joint rather than an investment book. One guy decades ago opened a Hedge Fund that was funded virtually overnight based on a few phone calls to Old Money types. He was a monk with degrees in philosophy and religion who decided he wanted to go to Wall Street instead. Some compliance types from the Treasury showed up during a banking crisis and decided the monk knew more about what was going on than the bankers did.

Its obviously a world that is beyond my math skills and certainly beyond my bank roll abilities too.

You might be interested in blog.oddhead.com. Its run by a Yahoo Research Scientist in NYC. Its a good start for prediction markets. I've not visited it in a real long time but I think its still active.

Plenty of trading opportunities on Betfair.com. Betting in-play when the odds change considerably as the games go on offer excellent chances to lock in a profit. Not sure if Betfair is allowed in the US though.

One very brutal and prolonged murder of a young married couple took place in the UK and is thought to have involved a telecommunications failure involving a game in Manchester, a bankroll in China and a sports website in the Ukraine. I think the final few moments of the game were delayed by satellite transmission and a cell phone call that should have given more timely results was not made. The failure to make the phone call was punished in a protracted manner and the case remains unsolved so it seems there are some hazards to certain aspects of in-game betting.

Betfair matches the action of anonymous people so no risk of anything as serious as that. It allows backers and layers to agree to a wager in the same way a stock market allows buyers and sellers agree to trade stocks.

Quote: Aussie

Betfair matches the action of anonymous people so no risk of anything as serious as that. It allows backers and layers to agree to a wager in the same way a stock market allows buyers and sellers agree to trade stocks.

I know folks who made a useful side income arbitraging on the spreads in the UK... they took a couple of hits when one leg of the arb wasn't taken, and their phone call was sometimes enough to get lines to change, but they still made 10-15 grand a year.

Tax free.

All I will say, is that there are definitely people arbitraging in the sports betting markets and it is a +EV play.