This article covers three ways of making money from sports betting that work in both theory and practice.
They are all based on sound statistical principles and if you do some research around the web you'll find that they have been around for almost a decade.
What you will also find is that bookmakers profile and limit players who apply them.
However, this does not mean that you cannot extract some good profits before that happens.
Some of them are also more difficult for the bookmakers to spot than others. This article explains the difference between them and argues some of the pros and cons of the different methods.
1) MATCHED BETTING
The idea behind it is to make arbitrage bets using bonuses and promotions from the bookmakers on one side and creating an arbitrage bet on a sharp bookie or exchange on the other.
There are many website and bloggers offering matched betting strategies.
Matched betting is the least risky, but at the same time, it offers the lowest potential reward.
Matched Betting Pros
Risk-free in theory, just like arbitrage betting.
Does not require a large bankroll to get started.
Matched Betting cons
The number of these promotions decrease with time, effectively putting a cap on how much one can make from it.
Just as with regular arbitrage, it is easier for bookmakers to spot than value betting, so you will get limited faster. Personally, I do not want to waste my accounts on doing it
Because your turnover will be dependent on the size of the promotions, they will be quite small.
Overall, it can be a good way to win money on sports betting if you are starting out with a very small bankroll. Nonetheless, if you are serious about making some decent money, it is better to save up a bit of cash and start value betting with a larger bankroll.
You can also leverage signup bonuses to build your bankroll in the beginning.
2) ARBITRAGE BETTING
In arbitrage betting, one is using the money only, rather than promotions —like in matched betting—to bet on all outcomes of a game.
When the overall odds on these outcomes is high enough to guarantee a profit independent of the outcome.
Typically an arb is placed on the soft bookmakers on one side and the sharps or exchanges on the other to complete the arbitrage.
The potential ROI one can make per arbitrage bet is typically around 1%.
Arbitrage Betting Pros
The major pro of arbitrage betting is that it in theory is risk-free. Although arbitrage bets seem risk-free, in practice it is not that simple, which will be covered in the cons.
Arbitrage Betting Cons
The potential risk of arbitrage betting is that the odds change after one has placed one side of the bet
The bookmakers voiding the bets due to palpable errors (they mispriced their odds terribly, but their terms enable them to void it)
The bet is voided because of unforeseen events (e.g. bad weather). These elements would all leave you exposed on one side of the arbitrage. Now, if one can expect to get a 1% ROI per bet, one would need to bet for $100 to make $1. If one of the mentioned problems occur and the $100 stake is lost, one will need to make 100 x $100 bets to make up for it!
The other potential downside is that it is easier for the bookies to spot arbitrage bettors, because it requires the market to be too high on all sides of the game. So one gets limited faster, putting a cap on the potential lifetime earnings.
Also, you will need to distribute your capital and thus tie up your capital across a very wide range of bookmakers to take advantage of the surebet opportunities.
Finally because a sport arbitrage bet requires all outcomes of the game to be too high, arbitrage bets do not occur as frequently as value bets, reducing the potential turnover. Remember that with an avg. ROI per bet is 1%, one needs a high turnover to make good money.
3) VALUE BETTING
To explain it simply a value bet to take only one side of an arbitrage bet.
Instead of betting on all outcomes, one only places a bet on e.g. the home team to win.
More generally speaking a value bet can be described as placing a bet at a higher odds than its underlying probability.
So one can use the soft side of an arbitrage bet to place a value bet, but that is not the only way of identifying them.
The major pros of value bets:
They occur more frequently than arbitrage bets, thus one can get in a much larger sample size of bets and turnover.
The avg. % size of the value bets and thus the % ROI per bet is higher for value bets than arbitrage bets.
They are more difficult for the bookmakers to spot than arbitrage.
The major cons of value betting
They are higher risk than arbitrage bets, which in theory (but not necessarily in practice as covered above) are risk-free.
Let’s use an example: If one takes a bet with 2.0 in odds, one can only expect to win 50% of the time. In the short run, anything can happen, e.g. losing 10 coin tosses in a row.
But over a large sample size, let’s say 10 000 tosses, the distribution of the number of heads and tails will be pretty much spot on 50/50.
So in the short run, variance and swings will have a large impact on your results.
Managing the Risks of Value Betting
The good thing is that this risk can be managed by:
Spreading your risk over a large sample size of bets.
Taking steps to reduce your variance (the most important being taking lower odds, which equals a higher probability of the team winning).
More Pros and Cons of Arbitrage Betting vs Value Betting
Too good to be true? No, bookmakers limit winning players.
Does all of this sound too good to be true?
Well, a con of all three approaches is that just like any other winning strategy, the soft bookmakers will limit you if you win over time putting a cap on how much money a person can make.
However, I would like to remind you that this does not mean that you can't extract solid profits from the bookmakers before this happens.
Also, when you reach this stage, if you have a large enough bankroll to do so, you can continue with value betting on the Asian bookmakers.
These bookies take higher stake sizes and don't limit winning players.
Which strategy should I choose?
It all depends on your risk-reward profile.
But at Trademate, we are all about value betting as this gives the highest potential for reward of the 3 ways to find value while still controlling for risk.
This is what we do ourselves and why we made the ultimate tool to help you identify value bets.