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Before we go into the real meaning of what is a "sports arbitrage betting", let us first know what is the meaning of Arbitrage? It is nothing but using the market differences in a way so as to have a jeopardy free profit irrespective of the final outcome of the match or event. Thus in a "sports arbitrage betting", one has to take the advantage of the bookmakers contradictory opinions related to the final outcome of the event or sports match to guarantee a profit. In other words "sports arbitrage betting" is a method by which offsetting positions in a particular market are taken at the same time but at varying prices. This price difference in the market will provide an instant jeopardy free profit. This profit is independent of the price of traded instruments.

Illustrations of "sports arbitrage betting"

1. A NFL match played between team A and team B gives the below market anomaly from both bookmaker A and B.

The arbitrage profit for the above will be only 6%, which means a $1000 structured investment would provide $63.22 of jeopardy free profit irrespective of whichever team gets victory in the event.

2. In the match of Latvia Vs Poland:

One can bet for the following:
- 15.0 Latvia with 365 bet.
- Luvbet draw at 7.0.
- 1.35 Poland with many bookmakers.

By dividing your total amount to 77.951% Poland, 15.033% draw and 7.016% Latvia you would surely get 5.23% of profit irrespective of the final outcome of event or match. So the following is the result:
- Poland 1.35 x 77.951 = 105.23
- Draw 7 x 15.033 = 105.23
- Latvia 15 x 7.016 = 105.23

3. During the Wimbledon match for ladies singles between Kim Clijsters and Lindsay Davenport. This match resulted in victor chandler bookmakers giving Davenport 2/5 odds and tote bookmakers gave 3/1 odds to Clijsters. At 2/5 odds, the average amount invested in Lindsay Davenport was $71.42 and return was $100. While at odds 3/1, the average amount invested in Kim Clijsters was $25 and return was $100. So this means the average investment which is to be returned is $100 - whoever wins - is only $96.42.

How does "sports arbitrage betting" work and what are the opportunities?

To make "sports arbitrage betting" work one must utilise two distinct bookmakers. To place a bet on all the final outcomes simultaneously with same bookmaker will not work out. One must look out for two bookmakers who have different prices and are great enough that an arb is made. This was a very big challenge earlier but nowadays there are many kinds of bookmakers online offering a variety of choices for placing odds and gives us a wider option to choose from.

There are lots of distinctive sports books in many different countries, each of which specialise or focus on a particular sport and quite familiar among competitors of the local areas. To contend for worldwide business they should provide a huge variety of sports across the globe mostly outside their expertise areas. This results in the bookmakers outreaching themselves when providing odds - thus they try to cover each and every possible thing or market to get or attract lots of customers. This will be a positive sign for us and great happening news for all of us because the bookmakers in outreaching, they may sometime provide odds on matches which the bookmakers don't understand or have knowledge about. For instance, a bookmaker from USA may have a very little knowledge about "English division 2 football games", but in spite of his less knowledge he places odds on it. In contrast, English Bookmaker who has the knowledge of the game will be very much interested in the final outcome of the same game. This situation results in a wider difference in the odds for the same game, thus resulting in a hefty arbitrage opportunity for us. In many other cases also these bookmakers are so busy that when they need to offer odds forcibly they make mistakes. The prize of the arbitrage will also depend on the expected number of bets than the final outcome of the bet.