Sports Betting Arbitrage

Definition Courtesy of Dictionary.com: The simultaneous purchase and selling of an asset in order to profit from a differential in the price. This usually takes place on different exchanges or marketplaces. Also known as a "riskless profit".

So, what does this mean in terms of sportsbetting?
Generally speaking, it means that it is sometimes possible to find betting lines on one game at two different sportsbooks that make it possible to place wagers on both sides of the same contest and make a profit no matter the outcome - or at least not take a loss. As the bettor you take no risk, but can reap the reward.

Example 1. (I have applied real teams and sportsbooks, but contrived an imaginary circumstance for these examples - don't go hunting for these bets!)

Cleveland is playing Pittsburgh.
Bodog lists the over/under as 48 (Even)
Pinnacle lists the over/under as 43 (Even)

As the bettor, you should place equal wagers on the over at Pinnacle and the under at Bodog. Why? Let's make your bets $100 and run through the possible outcomes.

Total is >48. You win $100 at Pinnacle, but lose $100 at Bodog. Result is $0
Total = 48. Your bet at Bodog is void, and you win at Pinnacle. Result is +$100
Total is < 43. You win $100 at Bodog, but lose $100 at Pinnacle. Result is $0
Total = 43. Your bet at Pinnacle is void, and you win at Bodog. Result is +$100
43 < Total < 48. You win both bets. result is +$200

So, you risk nothing, but can win. Its a freeroll.

Note that finding even (juice-free) bets on over/under wagers is not very common, nor is finding such a wide disparity in the over/under scores at two different sportsbooks - but it does happen from time to time.

Example 2

Cleveland is playing Pittsburgh.
Bodog's moneyline for this game is Pitt/Cleve -240/+180
Pinnacle's moneyline for this game is Pitt/Cleve -170/+145

When the [absolute values] of (+) line on one team is greater than the (-) line on the other team at another sportsbook, there is an arbitrage situation. In this example the absolute value +180 on Cleveland at Bodog being greater than -170 on Pittsburgh at Pinnacle.

To calculate how to bet this you must use the following formulas:
1. First you must convert the moneyline numbers to European style multiples.
(+) moneylines are converted by using (+moneyline/100)+1 , so (+180/100)+1 = 2.8
(-) moneylines are converted by using (100/-(-moneyline))+1, so (100/-(-170))+1 = 1.588

2. Next you must find the fraction of your total bet (both sides of this bet make the total bet) to place on each team. For this example we are willing to bet $100 total on this arbitrage bet.
Here is the formula:
(-ML multiple)/{(+ML multiple)+(-ML multiple)}*$100 = amount to wager on the +moneyline team (in this example its the amount to bet on Cleveland at Bodog)
or 1.588/(2.8+1.588)*$100 = $36.2

You can use the formula (+ML multiple/{(-ML multiple)+(+ML multiple)}*$100 = to find the amount to wager on Pittsburgh at Pinnacle,
or you can just subtract the Cleveland wager from your $100 total and come up with $63.8

Lets check the possible outcomes:
We bet $36.2 on Cleveland for a profit of $65.16 and
we bet $63.8 on Pittsburgh for a profit of $37.53
so if Cleveland wins, we lose $63.8 on Pittsburgh, but still come out $1.36 ahead ($65.16 - $63.8)
If Pittsburgh wins, we lose $36.2 on Cleveland, but still come out $1.33 ahead ($37.53 - $36.2)

We do not win very much, but we can NOT lose money on this bet. Moneyline arbitrage bets are quite rare, but when they are found, the wise bettor puts as much as he can afford on this type of sure thing.