First, let me tell you, this has nothing to do with gambling per se. I will show you a strategy with which I have earned a nice side income on 2 different gambling sites using mathematics.
What I’m talking about is called Arbitrage Betting.
Arbitrage betting or arbing is a trading method used on betting exchanges that guarantees a profit by taking advantage of price disparities between and within markets. This article explains what arbitrage betting is, how to identify arbs and how to make an arbitrage bet.
First of all, i singed up on Stake and CSGO500. These are the world’s most popular and secure crypto gambling websites where you can place sports betting.
But for me was decisive: these two sides have the biggest differences of Odds.
How to calculate arbitrage betting between a bookmaker and exchange
The most common arbitrage bet is made by taking positions in the market across a bookmaker and a betting exchange — backing at the bookmaker and then laying the same outcome on the betting exchange.
As an example let’s say you want to bet on a tennis match between Player A and Player B. The odds on the bookmaker and the market implied probabilities in brackets — learn how to calculate betting margins — are displayed below:
Player A to win 2.20 (45.45%)
Player B to win 1.68 (59.52%)
Market margin 105%
You now look at the lay price on Player A to win — betting that he won’t win — which is 1.98 with the Smarkets exchange. The table below highlights this is an arbitrage opportunity as the combined implied probability for bets is 95.96%.
Player A to win at bookmaker 2.20 (45.45%)
Player A not to win at Smarkets1.98 (50.51%)
Combined market margin 95.96%
Calculate your lay stake for arbitrage bets on a betting exchange
Now you stake £200 on Player A to win on the bookmaker with odds of 2.2. To calculate your lay stake on the Smarkets exchange you simply use the following calculation:
(back price x back stake) / (current lay odds — exchange commission)
Example: (2.2 * 200) / (1.98–0.02) = £224.49
You would then make a £224.49 lay bet on Player A to win at odds of 1.98 on the betting exchange.
Calculate your profit if you win at the bookmaker
Calculating your profit if your bet wins with the bookmaker is simple:
Profit = (back odds — 1) * back stake — (lay odds -1) * lay stake
Example: Profit = (2.2–1) * 200 — (1.98 -1) * 224.49 = £20.00
Calculate profit if the lay bet wins at the exchange:
Next, you calculate your profit if your lay bet with the exchange is successful:
Profit = (lay stake * (1 — commission)) — bookmaker stake
Example: Profit = (224.49 * (1–0.02)) -200 = £20
So all in all you make about 20$ profit with a 200$ input. But you can apply that calculation to your own budget and win $2 on a $20 investment. After only 10 games you double your investment and get higher winnings.
Sounds good, right?