Risk free betting, or arbitrage betting, is the act of placing bets on all possible outcomes of a sporting event so that you lock in a definite profit at the end of that event. This is great for sports fans to make some extra cash on the side with 0% risk.
Risk Free Betting: Real Life Example:
SAT FEB 13TH 2010 NBA ALL STAR DUNK COMPETITON: WINNER
– Shannon Brown » -250 1.40 (BWin) » £781.25 returns £1,093.75
– Any Other » +400 (5.00) (BET365) » £218.75 returns £1,093.75
– Total profit: 9.375% (£93.75)
A correctly staked investment of £1,000 guarantees a return of £1,093.75 no matter which Player wins the competition. That’s £93.75 profit due to discrepancies in the bookmakers’ odds guaranteeing a 9.375% profit on your investment!
The above information tells us that a betting market exists for which player will win the 2010 NBA slam dunk competition. It also tells us that BWin have odds of -250 (1.40) for Shannon brown to win and that Bet365 have odds of +400 5.00 for any other player to win.
By applying a simple mathematical formula to those odds, we are able to calculate that we can cover both possible outcomes of the bet and make a guaranteed 9.375% return on our investment.
We would invest our money in proportion to the odds on each possibility. The amount to invest on each outcome is calculated using another simple formula. £781.25 invested on Shannon Brown returns £1,093.75 and £218.75 invested on “any other player” returns £1,093.75.
£781.25 x 1.40 = £1,093.75
£218.75 x 5.00 = £1,093.75
Risk free profit = £93.75
It is very hard to find games with more then a 2-3% ROI. This was just a great arbitrage that I was lucky to catch in time.