Most people are convinced that betting cannot earn profits to gambler in long-term perspective. It’s obvious even for those who are a great experts of statistics and probability theory. The only simple rationale here is: If bookmaker organizations exist, it means that they earn money from this business, and if they manage to earn then gamblers are supposed to spend. However this could be an absolute true if there would be only 1 bookmaker around the world. But its not like that and nowadays we have a hundreds of internationally recognized bookmakers.
To see how it could be possible to earn risk-free money from betting, let’s look first at how betting works in general. Let’s say we have a following tennis match tonight:
Nadal vs. Federer
Bookmaker company A gives the following odds for this match:
Nadal to win 2.50 – Federer to win 1.50
It means that if we stake on Nadal $3 and Nadal wins the game, we receive 3 x 2.5 = $7.5. Same happens if our stake on Federer and he wins: 3 x 1.5 = $4.5.
Until now it’s pretty clear how betting system works. Now let’s assume, that there is another bookmaker Company B, let’s say. This company thinks that Nadal’s chances are better so their odds for Nadal vs Federer are following:
Nadal to win 2.00 – Federer to win 1.727
Now all you need is to place 2 different bets with each of these bookmakers:
1. $40 on Nadal’s win with Company A (2.50)
2. $57.9 on Federer’s win with Company B (1.727)
Whoever wins the game your winnings will equal to 100$. However total spending was only $97.9. So in this case you earn $2.1 of risk-free profit. This method of betting is called arbitrage betting and opportunities like above described are called “arbs”.