Jolted out of my savings inertia by the paltry 0.75 per cent I was getting on my Alliance and Leicester ISA, I decided to experiment with another tax efficient investment vehicle – gambling. To be more accurate, the practice I am writing about is not strictly gambling but rather "sports arbitrage" - the technique of betting on …
Does anyone else get a really uneasy feeling when they come to the Register and find articles like this?
No, not really
I'd probably never do it (I've never been very good at keeping on top of things like this) - but it's an interesting look at technology used to create an opportunity for gambling customers that was probably impossible before.
Only the worry...
... that once well-publicised to a bunch of ornery geeks like the el Reg readership, the upsurge of bets placed this way will get noticed, and the buggers 'll find a way to block it.
Yep especially as the bulk of the money came from free bets. Its something thats easy to do with a bit of research and using a spreadsheet to keep track of everything is a mandatory tool. however after the main free bet offers run out your profit will slow right down leaving you two options:
1) Chase more free bonuses, this often leads to dodgy books (even with licensing authority's and Sportsbook Review books can go bad for no reason)
Arbing tyes up quite a bit of capital and requires an eagle eye as well as commitment. The problem is it doesn't stop there bookies can kill your bet for no reason and if they suspect you of arbing will "gub" your account meaning you can no longer place more then a couple of pounds worth of bets on a single event. this often leads to people chasing less well known books and then trouble happens.
some people make a fortune from this, others loose everything but in the long run its no where near as easy as the article makes it sound. chasing the free bets is easy (i made £650 during the world cup doing that) but afterwards it gets alot harder
Been arbing for four years now...
Sports arbitrage software aimed at the internet bookmakers has been around since 2001, and it's still possible to make a lot of money. I've seen absolutely no indication of a decrease in arbs the last few years, or faster limitations from the bookmakers. On the contrary, the services are offering new smarter ways to combine arbitrages all the time.
It's hard for a bookmaker to detect an experienced arbitrage trader from a regular gambler. But when they do limit you (which happens eventually on most bookmakers), just register a new account and start again.
It sounds 'dodgy', but really all arbitrage does is provide a service to the market in the long run.
Note the final paragraph:
""We were actually expecting that the bookies would try and make it hard for us to get our data, but so far that's not happened at all. What we've realised is, the books with the best odds actually make a profit from the arbers in the long run, and they know this.“"
This is perfectly true. Arbitrage only works because there are different bookmakers who will have different opinions over what the odds ought to be on any given event. It's inescapably true that this means some bookmakers are right and others are wrong, or at least, some bookmakers are more right than others. Over the long run (both in time and number of people doing arbitrage), the bookmakers that are more right than others will make a profit. Essentially what arbitrage does is take money off the less accurate bookmakers and split it between the arber and the more accurate bookmakers.
Bookies are not daft
Do the bookies have a cluster of crawlers that keeps them all profitable ?
Or if the arb crawlers rely on xml then its their own fault. I am too lazy to look.
been there, done that
I did that on a smaller scale about 5 years ago whilst unemployed (a stakehorse provided me with £1000 to play with). Used to regularly get 6% returns, mainly on tennis matches, but it got increasingly more difficult as the months progressed. I believe bookies must have figured out what was going on and tried it themselves.
Quite amusingly littlewoods happened to be the account I would win on a large number of times. To them it looked like I put in £50 and then walked away with £800+ a few months later, never to return.
RE: Only the worry..
Actually what'll happen is the same that's happened in the real financial markets - the more/faster algorithms finding arb opportunites, the faster the odds will be lengthened/shortened to reflect the current bets and the overall effect is the market becomes levelled and less arb opportunities exist.
On the stock markets the guys there are chasing fractions of pennies thousands of times over to generate any kind of return.
Yes, it makes me very uneasy.
Not because of the lack of a realistic IT angle, but because the article makes no mention of what can go wrong.
Basically the margins are tiny compared to the outlay; you're hardly going to make a living unless you do it full time; it's extremely boring; and you've only got to foul it up just the once, and you've lost the lot.
Many years ago I used to make a few quid here and there arbing dog races on Betfair, until the day where I failed to close out on one dog before the off, so I had 5 chances of making a small amount of money, and 1 of ending up on the embankment with the arse out of my trousers. It was an extremely bowel-loosening 45 seconds or so. After that, I decided this non-risky way of making money just wasn't worth the risk.
Now we've got professional online arb services matching the bets for you, all that can go wrong is that the connection to one bookie lags out before you've got all sides covered - or, of course, someone at the professional service puts a decimal point in the wrong place. (A similar situation happened some years back when some bozo City dealer hit the wrong button and sold 600 shares in something at 1, instead of 1 share at 600; this caused the FTSE to plunge over 200 points two minutes before market close, leaving those who were arbing the FTSE no way out of their positions and wiping a lot of them out.)
All that glitters is not gold; some of it is Gary.
As with precedent article...
Wouldn't you actually make more money by working at McDonald's? What is more, in a truly risk-free way? From my point of view, it would even be less boring.
There are quite a few things that can go wrong in such a scheme, from the bookie going bust to your connection lagging at the wrong time to a simple mistake in the betting. If anything happens, you are likely to lose everything... and eve if you win every time, the margins are small.
Go ahead if you have nothing better to do with your time. As for me, I do have.
McDonalds vs Arbing
If I were to work at McDonalds they would have to pay me £68.6 an hour... And I would only have to do actual work around 10% of the time. The hours I spend arbing is mostly about waiting for the good stuff to show up while browsing the web or doing other stuff.
Arbing is definitely not for anyone, it can be very boring and requires dedication. I'm sure a lot of people would rather work at McD.
Oh, and I want fries with that ;)
...but you will never make a living at it
So, if you have hours to spend every day, and spread a bunch of capital around, you can make 1% per transaction on a consistent basis. If you take into account the opportunity cost of the funds on account with the bookies and the time spent, exactly what rate of pay does this come down to? Would you in fact be better off flipping burgers at McDonalds? Lets also not forget that just one or two cancelled bets that unbalances your arbitrage can wipe your profits for the season.
Arbitraging bookmakers is like counting cards at Blackjack at a casino (or trading futures options). If you sit at the $5 table and rake in a couple of hundred bucks on a weekend vacation, it's all well and good. But every one of the dealers is also counting cards (because the job is boring). They can see you a mile off. If you bet enough to make serious money, you will be politely escorted away from the table, photographed, and told never to return. Likewise, if you are making big bets with a bookie, it raises red flags. Duh.
Small-time arbitragers, card counters, and other "smart" gamblers perform a useful service to the casinos and the bookies. They spread the word that you can beat the house. It isn't true. Not in the aggregate. But this word brings in fools by the busload, including "smart" fools.
If you doubt this for a minute, one visceral wakeup call can be obtained by walking around the perimiter of any big casino hotel. Out in front are the glittering lights and the valet car park. Around the back are the whirling vent fans, truck loading docks, and electrical substations of a big industrial extraction plant. Resources in the form of suckers with money enter the plant through the intake doors in front. They pass through the inner machinery where they are treated with alcohol and the money is extracted, and then reemerge as waste, again through the portal in front. The tailings of this mine leave poorer on average, but the extraction process is not 100% efficient. Some suckers leave clinging to nuggets of processed money.
I know this isn't what you want to hear, but it's what you get for posting on a forum read by engineers.
"I've also not used my name on this article in case some bookmakers decide to close my accounts"
Yeah, that'll certainly do the trick. It's not like there's only a handful of people writing for the Reg and any bookie could cross-reference all those names against their account list and spot the only one with a very active betting history in about ten seconds, or anything. Oh, no.
I'm not a gambler, so I don't really know much about the industry.
From reading the article and the comments, it seems to me the bookmakers/casinos only want losers, to the extent that if you start winning they will stop you playing. They even ban techniques or even skills which would help you win.
Is this really true? If it is, why do people bother?
Is it still the case that gambling debts are unenforceable in law?
"Is this really true? If it is, why do people bother?"
Casinos and bookies advertise themselves as cash machines/ATMs. They give the illusion that all you have to do is walk in, place a bet, and walk out rich. People want money, and they don't want to work hard for it (myself included), that is why people try.
Counting cards is from a bygone era. A modern shoe with 8 decks will only deal half the cards (if that) and then be replaced. (Cue the flood of pro-gamblers who regularly count cards and break the bank at Monte Carlo every weekend before flying back in they personal yacht to moor up at the Vegas docks).
I used to arb a lot about 6 years ago, and never had a single problem with bookies trying to limit my account. Why? Because I am losing as many bets as I am winning. Even when I was using a bookie for the win and tie, and a 2nd bookie for the lose, there where never any problems. I was just a single user amongst thousands of others who where either betting based on their star sign, tarrot reading, betting that the horse will lose because it won last time, betting that the horse will win because it won last time, betting that the team will lose because they are playing away, the combinations are endless.
The number one sales pitch for any gambling system or tipster is "Don't be greedy!!! If the bookie learns how much money you are making, they will try to close you down!!!"
No, they won't. They couldn't care less. You are a tiny tiny tiny cog in a massive machine. They don't care if you win 1 bet, then lose the next (because your arb won at a different bookie). Casinos even sell books in their casino gift shops about how to win at blackjack/roulette etc. Casinos and bookies love the system sellers. Every time someone buys a "Brand new system that will kill the casinos!!!!!!!" the casino will make money, because counting black and red and doubling your stake each time is going to wipe you out long before you break their bank.
I get huge amounts of spam and physical junk mail for gambling systems and horse tipsters/systems. I find it amazing that so many horse systems exist and apparently seem to make money. They are generally either betting on the horse that won the most, or the 2nd favourite, or betting against the horse that won the most. Yet these contradictory strategies all seem to have achieved "2000% return on investment this year alone!!!!!!!" etc etc Some sort of Schroedinger's Horse that has both won and lost simultaneously? One would almost think they were being a little flexible with the truth.
Arbitrage trading (to make it sound grand) is a good deal if you can spend the time. But it does get your heart racing when one of your bets doesn't go through because the odds have changed and you have to scramble to Betfair to try and limit your loss as much as possible.
Zero-risk? I think not. Low-risk, yes. You are never going to get wiped out, there will always be an exit strategy to limit your losses (e.g. bet £100 in total across 2 bookies, and you might only get £98 back instead of the £102 you were looking for because the odds changed and that was the best deal you could find.) Still better than losing the full £100 by betting on Manchester United because they are playing at home and Jupiter is rising, or any other system that someone tries to sell you.
The biggest issue I have with Arbs is the same as with any other gambling system. IF IT MAKES SO MUCH MONEY, WHY SELL IT? Seriously, if the guys selling the Arb info believe it is so good, why bother with the whole websites, and selling, and credit card companies to handle payments, and fraud prevention and stolen credit card numbers etc. Why not just make a billion keeping the info to themselves? The answer is, because it is time consuming and fiddly. Bear that in mind, they find it easier to do all of that, then sit down in front of their PC and get "Free money from the bookie."
Not to be confused with gambling systems, which are all nonsense. "Find out how to use the casino as your own personal ATM and get millions in free casino money!!! Only 20 copies available for only £97 !!!!!!!!!" Yeah, right. Believe that at your peril.
I gave up arbing because the big bookies stopped having so many good arbs, and I was having to spread my money to more and more obscure bookies with annoying rules for deposit and withdraw.
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