Transcription
So, a while ago, I deposited $200 into a sports bet account. Then, a couple of months later, I received an email from them saying that there were changes to my account, and essentially, I was banned from the platform and betting with them. By that point, I had turned my $200 initial deposit into well over $8,000. Of course, I withdrew every single cent once I heard that I've been banned. And that was just for my sportsbet account. So, I also did this with PointsBet, Tab, Unibet, Light Brogues, and a heap, whole heap of other bookies out there.
Now, you're probably thinking that this is some sort of get-rich-quick scheme or some sort of scam that is all over the internet, but it definitely is not. There's like the one simple thing behind the strategy that I've used to bet on these bookmakers' sites and consistently make money. It's definitely firstly not through luck either. I've been placing probably like thousands of bets by now, but um, I still managed to consistently make money, and it's just one simple principle that we've all learned in high school, and that is just mathematics. There's nothing else to it. Yes, mathematics is the entire foundation behind this betting strategy, which is what's sometimes referred to as arbitrage betting, or what I like to call it, positive EV betting.
Firstly, we need to try to remove our perception of sports betting as a bad habit and like a gambling addiction kind of thing that people will get sucked into and end up losing a load of money. So, that is actually probably true for maybe 90% of the cases, but there are people out there who have figured out strategies to be able to consistently beat them. Firstly, there's probably another one out there which is like just based on pure analysis where you analyze sports, analyze maybe horses, and like be able to bet on ones that are kind of underpriced. Whereas this strategy that I'll be showing today is all about the mathematical side, and I would say it's a strategy that poses a lot less risk, and you can still consistently make money by doing this. So, let me explain the math behind arbitrage betting.
Firstly, let's go through an example of how sports betting books, bookies, actually make their money. So, let's say you have a coin toss; it can either be heads or tails, and there's a 50% chance of it being either one. Now, the sports betting books, bookie, is allowing to bet on either heads or tails, and both of these prices are $1.90 odds. So, if you put in a dollar, you get $1.90 back if it is right, and you lose your one-dollar stake if it isn't. So, you either make 90 cents profit, which is $1.90 minus your initial dollar, or you lose the whole dollar if it isn't right. So, let's say there's two customers who decided to bet on this bookmaker. One person decided to bet on heads, and another person decided to bet on tails, and both of them were given odds of 1.90. So now, if it's heads, then the first customer will make $1.90 back, and the second customer will lose their initial dollar. So, the first customer's made 90 cents profit, while the second customer has lost the initial one dollar they put in. So, this has made the sports betting bookie 10 cents. And now let's say it was the other way around, and it was actually tails, then the second customer would make $1.90 back on their one-dollar stake, and the other customer would lose their initial one dollar. So, now again, the net profit for the bookmaker is one dollar, which they received from the stake that the customer lost minus what they had to pay out, which was 90 cents. So, effectively, once again, the bookmaker has made 10 cents profit.
So, this is the way pretty much bookmakers always make money; their odds are always underpriced, and the odds are not in your favor. And it's just like gambling or betting in the casino where the house always wins; it's the same for these sports betting bookmakers. Um, their odds are always not the fair price, and you're always basically paying more to um, get these odds. Well, the odds generally should be higher than what they're actually offering you, and if you were to do this over the long term, of course, the bookmaker would eventually win, and you would pretty much always end up losing. So, I said that the odds are not in your favor when the bookmakers are giving odds to you. So, how do you actually work out the fair odds and what they should be?
So, to calculate odds, the formula is one over the odds equals the implied chances of it winning. So, let's say heads and tails for a coin toss; it's 50/50. We all know that, right? And then let's say if it's heads, the chance of winning is 50%, which means one over the odds is equal to 50% or 0.5. So, that implies the odds is two, but the bookmaker is only giving you $1.90. So, one over 1.90 is something like 53% or 55%, somewhere around there. And of course, that's not the true probability of landing on heads; it's less than that, but that makes it seem like it's actually a high probability, but it's not, which means they're overcharging you. Now, this is when arbitrage betting comes in. Arbitrage betting pretty much comes in when the odds are in your favor. The whole concept behind arbitrage betting is it's removed all the risk because you've hedged it away, and this is where you can bet on one or more outcomes at the same time, and regardless of the outcome, you're guaranteed to not lose money. You're not guaranteed to make money, but you're guaranteed to not lose, and in most cases, you are going to be guaranteed to actually win money.
So, going back to the coin toss example, let's say if you bet on heads, the odds were 1.90, but it was 2.50, and it's the same for tails as well. So, both these odds are 2.50, which is actually a very good price. If you bet one dollar on heads and one dollar on tails, either you get $1.50 if um, it's heads, and you get $1.50 if it's tails, but you lose the dollar from the other bet. So, either way, you've guaranteed yourself a profit of 50 cents. So, this is a way of guaranteeing yourself a risk-free profit, and you haven't actually had a view on the outcome, and you've made money regardless of the result, whether it was heads or tails. And of course, like your guaranteed profit can be even larger. Let's say instead of betting one dollar, you bet $100 each side; in that case, you'd be guaranteeing yourself a $50 profit.
Now, we all actually know the probability of a coin toss is 50%, um, either heads or tails, and unless the bookmaker was stupid or they made a mistake and wanted to go bankrupt, they would never give you a price that was under, uh, so that was over two dollars. So, the odds they'll give you will always be less than two dollars because that is where they have the edge, and that is how they get you. So, the example where I said the odds will be 2.50 for a coin toss would never actually happen, but this is where it gets interesting. What about all these sports events where the probability of events happening is not certain? So, no one actually knows, for example, in the Euros, France versus Switzerland, what is the probability of France winning? Some people might really like France and think it's probably 80%, whereas other people might think it's probably close to 60% or 70%. Like, no one knows for certain, and this is where different bookmakers have different views on their probabilities and therefore offer you different odds in regards to which team is going to win or all the outcomes of the game. For example, here you can see France, Switzerland, and draw results, and you can see that the odds between France versus Switzerland on the Tab bookmaker's site are a bit different to what the odds you might get on the France versus Switzerland um, on the Sportsbet bookmakers' site. So, because of this difference, we can find better prices for each of these outcomes. In this case, we will choose to bet on France on Tab, and we could choose to bet on Switzerland and draw on Sportsbet. But even then, this doesn't guarantee there will be an arbitrage; there actually needs to be quite a bit of a skew in terms of these pricings before you actually get to that arbitrage level where you can guarantee yourself a profit.
So, explain the outcomes and probability of, for example, this situation. The total implied probability is one over each was odd, so one over France win odds plus one over draw odds plus one over Switzerland odds, and that's the total implied probability in both cases. This is greater than 100%, which means the bookmaker has the edge, and that extra amount over the 100% is how much they're pretty much taking off um, their customers. Now, if you, for example, tweak it and you instead of using all the odds on the same bookmaker but choose the highest odds for the different bookmakers depending on the result, each individual result, then you get something a little bit less, but it would still not be categorized as an arbitrage. But now let's take a hypothetical example of a game between Djokovic and Medvedev. Let's say the first bookmaker thinks it's again a 50/50 chance of Djokovic or Medvedev winning, and it's a very close game, so your odds of Medvedev and Djokovic are 1.90 and 1.90 for both players. Whereas the second bookmaker thinks Djokovic is a strong favorite; they're priced at 1.40, whereas Medvedev is priced at 2.50. And once again, for each of these individual bookmakers, if you find the implied probability sum, it's again greater than 100%, but what you can see now is if you wanted to bet on Medvedev, you would just bet on Medvedev on bookie number two, and you would bet on Djokovic on bookie number one because the prices are better on those sites for the respective players to win. And then if you do this implied probability calculation, you get something less than 100%, and this is where you can get the arbitrage coming in. So, there's some arbitrage calculators online that you can use, or you can just make these in Excel, and it'll tell you if you want unbiased arbitrage, then you can bet this amount on player 1 and this amount on player 2, and you can guarantee yourself this profit if these were the odds, or they can do a biased arbitrage, otherwise known as a no-loss arbitrage. If you wanted the better odds, um, for example, you really believed in Medvedev, you'd bet on Medvedev to win; you'd make some money if Medvedev won, but you still wouldn't lose even if Djokovic won, because you've hedged away some of that risk.
So, you might be thinking, yeah, nah, this is too good to be true; there's no actual arbitrage opportunities out there. But because there's always events going on, like I live in soccer, tennis, cricket, rugby, AFL, horse racing, dog racing, there's always events going on; there's always mispricings from all the different bookmakers. There's so many bookmakers where you can take advantage of their mispriced odds, and there's definitely a lot of money to be made off of them each week, and it's all risk-free if you can do it right. But do remember this is only the surface of arbitrage betting, and it's just the most basic foundation and examples that I've used. You can get a lot more context to this; for example, let's say when there's seven horses in a race, or when you're doing multis, and it gets a lot more complicated than this. So, I highly recommend you do your own research before you actually put any money into it. Um, there's not financial advice or anything; this is just sharing a mathematical strategy to demonstrate that mathematics is probably something useful that you want to learn if you wanted to make money. It's definitely a viable option, and it can also be very easy to make mistakes. For example, the odds might change really quickly, and suddenly you've lost your arbitrage opportunity, or you have a betting limit that you didn't realize, like in their terms and conditions, they might say you're only allowed to bet $200 at this price. There's even been times where, like, I've made mistakes myself, like this was early on when I started betting; I accidentally, I thought I was betting on one horse, but I ended up betting on another one, so I was cheering for it all the way; I thought it won, and then in the end, I didn't; I actually lost a few hundred bucks from that.
Ultimately though, if you were to pursue something like this after you've done all your hard work and all your research, there's only one problem that you're going to be having, and that is that you'll eventually inevitably be banned from these bookmakers because you're making too much money off of them. Like, for me, on Sportsbet, I turned $200, what was an initial $200 like deposit into well over $8,000, like within a few months. Like, that's probably like over a 1000% return on investment, and that is something you can easily attain. Like, that was through no luck at all; like, it was just I actually expected to make that much um, or around there, like by that point, like luck is phased out after you've bet so much; like, luck is no longer a factor, and it's just how much you're expecting because of your smart strategy of arbitrage that you're playing. But yeah, you will eventually be banned, but that by that point, um, you probably would have made enough to like not worry or care about it and move on to something else. Now, like this is just a one-off thing where you can make some money, have a good time, learn about mathematics and some betting while you're at it, and then that's the end of it. If you enjoyed this content, then please make sure to give it a big thumbs up and subscribe to the channel to not miss out on my future content where I give more money-making tips and educational content. As always, take care, and I hope to see you guys in the next video.