Betting arbitrage ("sure bets", sports arbitrage) is an example of
arbitrage
Arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more marketsstriking a combination of matching deals to capitalize on the difference, the profit being the difference between the market prices at which th ...
arising on betting markets due to either
bookmakers' differing opinions on event outcomes, or errors. When conditions allow, by placing one bet per each outcome with different betting companies, the bettor can make a profit regardless of the outcome. Mathematically, arbitrage occurs when there are a set of odds, which represent all mutually exclusive outcomes that cover all state space possibilities (i.e. all outcomes) of an event, whose implied probabilities add up to less than 1.
Background
Arbitrage betting involves relatively large sums of money, given that 98% of arbitrage opportunities return less than 1.2%.
The practice is usually detected quickly by bookmakers, who typically hold an unfavorable view of it,
[{{Cite web, url=https://economics.yale.edu/sites/default/files/files/Undergraduate/Nominated%20Senior%20Essays/2015-16/Schwartz_Avery_SeniorEssay%202016.pdf, title=Arbitrage in the European Soccer Betting Market, last=Schwartz, first=Avery Joseph, date=4 April 2016, website=Yale University] and in the past this could result in half of an arbitrage bet being canceled, or even the closure of the bettor's account.
See also
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Advantage gambling
Advantage gambling, or advantage play, refers to legal methods used to gain an advantage while gambling, in contrast to cheating. The term usually refers to house-banked casino games, but can also refer to games played against other players, su ...
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Dutch book
In decision theory, economics, and probability theory, the Dutch book arguments are a set of results showing that agents must satisfy the axioms of rational choice to avoid a kind of self-contradiction called a Dutch book. A Dutch book, somet ...
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Mathematics of bookmaking
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Sports betting
Sports betting is the activity of predicting sports results and placing a wager on the outcome.
Sports bettors place their wagers either legally, through a sportsbook or bookmaker (colloquially known as "bookies"), or illegally through priva ...
References
Arbitrage
Sports betting
Investment
Wagering
Gambling terminology