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Technically, there is one way to guarantee that a profit is made from a fixed odds sports bet - arbitrage.

Different bookmakers vary slightly in the prices they offer for sporting contests. If the variation is great enough, a bet can be placed on each outcome at the best available odds using two or more bookmakers, in such a way that, with correct staking, a profit is guaranteed whatever the result of the game. This possibility arises because, by taking the best odds from different bookmakers, the punter can reduce the overround on the book to below 0%. The book for the punter is then said to be "overbroke" and the betting opportunity is known as an arbitrage, sure win or sure bet.

Consider the friendly international football match between Greece and Ireland, played on 20th November 2002.

BookmakerHome winDrawAway win
Bookie 11.903.154.23
Bookie 31.853.53.75

Now, taking the home win price from Bookie 2, the draw price from Bookie 3 and the away win price from Bookie 1, the book is become overbroke by 4.31%. With appropriate staking a return of £100 for an outlay of £95.69 was guaranteed. Stakes may be simply calculated by inverting the odds and multiplying by a preferred standard, in this case £100.

BookmakerHome winDrawAway win
Best odds2.33.54.23
Profit with win£56.52£71.43£76.36
Lost stakes-£52.21-£67.12-£72.05
Overall profit£4.31£4.31£4.31

Naturally, the frequency with which arbitrage opportunities arise is relatively low, since each bookmaker is careful not to ride against the general tide of opinion regarding the pricing of a sporting event. Although overrounds of only a few per cent are not uncommon, perhaps only 1 book in a 100 or fewer is overbroke and capable of yielding an arbitrage opportunity. Nevertheless, given the enormous number of sporting events available for fixed odds betting today, there are still a considerable number of sure bets to be found each and every week.

Arbitrage might seem like betting's equivalent of the Holy Grail. If the punter profits whatever the result of the sporting event, betting becomes risk-free, right? Wrong! No form of gambling is entirely risk-free, not even arbitrage. That fact that it is frequently and wrongly acclaimed as being so is perhaps partly due to the use of the term "sure win". There are numerous difficulties associated with arbitrage betting that can and do eat into the profits, sometimes with potentially disastrous consequences.

The first issue to consider with arbitrage betting is stake size. The majority of arbitrage opportunities are limited to only a few per cent at best. Consequently, stakes have to be large to secure any form of sizeable profit. In the example illustrated here, an outlay close to £100 was required to win £4.31. If a punter wanted £43.10 instead, total stakes would have to be nearly £1,000. In itself, this should not present a problem, provided the punter has at his disposal enough liquid cash to place the bets or make deposits with different online bookmakers. The first difficulty arises, however, if a bookmaker imposes limits on the maximum size of a stake. Since an arbitrage bettor's stakes are likely to be larger than most, this problem may occur quite frequently. A punter, for example, may successfully place his two bets on Greece and Ireland, only to discover that he cannot place a £285.70 stake with Bookie 3 on the draw, which limits him to £200. He is then left to sweat on the result of the match, which if drawn will lose him £171.20. Incidentally, the match finished 0-0.

Perhaps a more significant and ongoing problem concerns the effects of deposit and withdrawal costs, and in some cases currency transaction costs as well. For certain types of deposit, and with a number of internationally based online bookmakers, these additional costs can amount to anything from 1 to 5%. Given the usually small percentage profits available, these costs can potentially wipe out any guaranteed profit that is generated through the arbitrage. Of course, a punter can limit the number of deposits and withdrawals he makes but, given the large stake sizes and the number of bookmaker accounts he will require to be able to benefit from arbitrage opportunities that arise, none but the very wealthiest of punters will be able to have the required capital locked away in online accounts. With most arbitrage opportunities offering little more than 1 or 2%, one might assume that to earn as little as £300 per month from at least one winning arbitrage each day would require up to 20 online accounts, each with perhaps £1,000 available to spend. The wealthiest punters, of course, are unlikely to be interested in earning a few extra pounds through arbitrage betting.

A further problem arises with the currency of the betting account. Most online bookmakers now allow a choice of primary currency, with pounds, US dollars and euro all available. However, some of the smaller bookmakers may only permit transactions in one currency. If the currency used to make up one bet differs from that used to make up the others, a very careful calculation of currency conversion will be required to ensure that the appropriate stakes are used to secure the arbitrage profit. Of course, currency rates fluctuate by the hour, and even small mistakes made in calculating the equivalent value of one currency in another can eat into or wipe out the "sure win" return.

Finally, there is the issue of postponed sporting events. Under certain circumstances, postponed events may be rescheduled for within a few days of the original fixture. What a bookmaker does with bets placed on these matches will then depend upon his rules as set out in the terms and conditions. Some bookmakers may decide to void all bets placed, and reopen the book for the rescheduled event. Others may feel it appropriate to leave existing bets to stand. For a football match a punter may then be left with two standing bets and one voided bet. If the new book then offers a different set of prices from the original ones, the possibility of arbitrage may disappear. Again, the punter will be left to sweat on the result.

Every once in a while, one or two bookmakers make a glaring mistake in the pricing of a sporting event. When this happens, a sizeable arbitrage opportunity may become available, perhaps offering a 5% or even 10% return. Such opportunities, however, are relatively rare. When they come along, and a punter happens to have existing accounts with the relevant bookmakers, they present a wonderful opportunity to make a bit of extra money at very low risk. However, in view of the difficulties highlighted here, only the most dedicated punter will realistically be able to benefit repeatedly from arbitrage betting with a view to securing a regular income.