risks from arbitrage betting

As we have seen in arbitrage betting introduction article arbitrage betting is a way of winning bets, regardless of the outcome. So you will be wondering, if that’s so simple why isn’t everybody doing in? The hard fact is that there are many things that you have to consider when performing arbitrage betting. You have to make big bets to win small amounts and the slightest mistake could cost a lot of money. The good thing is that there are ways to minimize your risks and even if you have some losing bets you can still be profitable in the long run.

Below is a list of the most common problems you can face when placing arbitrage bets:

Bet cancellation

A bookmaker can cancel your bet at any time claiming that they have made a mistake when setting their odds. The bet can be voided before the kickoff, in play or in some rare cases after the end of the game. That will leave you exposed on the one side of the arb bet, on the bookmaker that has taken your bet.

The solution

You can minimize the risk by doing the following:

  • Avoid obscure bookmakers. Reputable bookmakers rarely will void a bet after the start of the game. Also, the big bookies may send you an email alert about the cancellation of a bet.
  • Check the odds on other bookmakers. If one bookie has odds a lot higher than the average of the others you should avoid that bet. It might be tempting to bet on high percentage arbs but you should accept the risk of that practice.
  • Double check the odds after placing the bet. If you are suspicious about a bookmaker or the odds that you have taken check your bets periodically to see if they are still active.

If you still face a cancellation never leave the one side open. It’s better to take a small loss by covering the open bet than gamble your entire stake. The profits from the next bets will cover that small loss easily.

If you find out that the bet has been cancelled after the match is settled then you can do nothing about it. Accept it, learn from that experience and move on.

On the other side, you can end up with a big profit if the open bet is the winning one, but this will rarely be the case. Remember, we are making an investment and there is not a need to take unnecessary risks.

Individual errors

When betting on arb bets the stakes are high and that can be stressful especially for a beginner. Also, the odds that we want are moving fast leaving us with few seconds or minutes to place the bets. Placing arb bets can be a challenge for bettors and you need to keep your calm and focus at any time if you want to be a successful arbitrage trader.

Some of the most common errors are the following:

  1. Bet on the wrong team or market.
  2. Placing wrong stakes.
  3. Not having enough funds in the second bookie to cover the first bet.
  4. Sometimes the arbing software may redirect you to a different event ( the U20 match which is played on the same day with the main event for example). If you are not careful you might end up placing bets on different events.
  5. Different set of rules across bookmakers. For example after player withdrawal due to injury in tennis bookmakers can settle the game in a different way.

The solution

You can minimize the risk by doing the following:

  • Always verify the bets before placing them at the bookmakers. Double check the participants, odds, stakes etc.
  • Avoid placing your bets close to the kickoff in order to have time to correct any errors.
  • Double check the terms of the bookmakers (especially in tennis matches)

Again never take any open bets in play and always cover your bets.

Bookie limitations

Bookmakers don’t like arbitrage bettors and will always limit their accounts. This is inevitable and is a fact that you’ll have to accept. Just think of the successful casino players. They will be kicked out from the casinos eventually. Bookmakers, just like casinos, will always like losing players.

You may get limited after a few bets or after months and years. The depends on how aggressive the bookmaker is against arbitrage bettors. There are also bookmakers that will never limit you such as Pinnacle, Asians and the exchanges (Betfair, Betdaq etc.). Unfortunately, it’s almost impossible to find arbs between those bookmakers.

There are ways to avoid getting limited and to extend your accounts but we will discuss them in a different article.

Moving odds

The most common problem of arbitrage betting is the quickness that the odds are changing. You may have found an arb and after placing the bet in the first leg you find out that the odds on the other bookmaker have dropped. That will result in a negative arb and a losing bet.

The solution

You can minimize the risk by doing the following:

  1. Avoid markets with high volatility.
  2. Place the first bet with the bookmaker that is less likely to move the odds.
  3. Open the bookmaker pages at the same time and try to place the bets simultaneously.

Stake restrictions

In most cases, you will not know what the bookmaker limits in a specific market are. You will found that only after placing the bet. So you may have placed the bet in the first leg only to found out that the second bookmaker doesn’t allow you to stake the amount you need to cover the first bet. In that case, you have to bet in lower odds or in a different bookmaker, resulting a negative arb.

The solution

You can minimize the risk by doing the following:

  1. Place the first bet in the bookmaker that you do not know what the stake limit is.
  2. If you do not know the bookmaker limits place the second leg in the one who has the higher limits.
  3. Never leave any open bets uncovered. It’s better to lock a small % loss than risk higher losses.

Capital diffusion

It is common for the money to be piled up in one bookmaker after a series of winning bets. If you consider the fact that it can take some time to withdraw your funds,  you have to make sure that you have sufficient funds in the other bookmakers to continue your activities.

The solution

You can minimize the risk by doing the following:

  1. I always suggest having a 10% of your capital in your e-wallets to be able to deposit them at any time.
  2. Keep record of your bets and bookie balances at any time.

In any case, you have to accept all the losses as part of the investment that you do at arbitrage betting. Analyze what you have done wrong, learn from your experience and move on to the next bet.

I hope that you have found my article useful and informative. If so feel free to share it or leave a comment below.

 

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billgkrtips
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