A Unique Way To Generate Consistent, Guaranteed Profits

By Daniel Tong
Posted Wednesday, December 15, 2004

Are you happy with the returns you are receiving on your hard earned money? Like most people, you probably want your money to work harder for you.

You will be surprised to learn that you can actually do better, in terms of returns on funds employed and safety, than most fund managers - by using a little known technique called sports arbitrage.

Does arbitrage involve clairvoyance and being able to forsee the future? Does it involve complex modeling to predict the outcome of a sporting event? No, it is none of these. Arbitrage is soundly rooted in the logic of mathematics. You do not have to be a sports expert or rocket scientist to be successful at arbitrage.

Arbitrage is well known in the financial markets. Arbitrage transactions are taking place all the time in the dealing rooms of large institutions. Unfortunately, ordinary investors will never have access to these arbitrage opportunities.

In contrast, arbitrage opportunities in sports betting are accessible to every sports bettor.

With the phenomenal growth of online sports betting in recent years, anyone with a computer and internet access can now act on arbitrage opportunities in the sports betting markets. Many 'arbs' are of short duration and difficult to act upon unless you are constantly monitoring the markets or your email box for 'arbs' alerts! However, there are sufficient numbers of sizeable and stable 'arbs' ( lasting several hours or more) to make this an extremely profitable exercise, without requiring a great deal of time or effort on your part.

A small paradigm shift is all that is needed to appreciate the beauty of arbitrage - a 'sure win' situation and profits without involving any risk.

Every one wants quick windfall profits but look at the huge risks we often take - knowingly or unknowingly. The sad fact is that many honest, hard working investors have lost enormous amounts of money in the stock markets during the past few years.

Sports arbitrage is easier and safer than the stock markets and more profitable than bonds or bank deposits.

Putting on an arbitrage transaction is a 'no brainer' as compared to doing a trade in the stock, commodities or currency markets. After all, how stressful can it be when you have a situation where a profit is assured -regardless of which team or player wins!

Each arbitrage opportunity is unique and the profit margin will vary. It is entirely up to you to select those 'arbs' which you wish to put on - simply ignore those that do not meet your profit expectations.

You may ask "If there is a guaranteed profit, why not bet the farm?" Good question. The answer is "No" because all sportsbooks have betting limits. This effectively limits the size of the arbitrage transactions we can put on. As the sportsbooks have a thin edge over the bettors, the ''Law of Large Numbers'' will work to their advantage in the long run - the sportbooks actually prefer numerous small bets over a few large bets!

The profit margin on arbitrage transactions is typically in the 1% - 5% range, although larger profits are not uncommon. 3% net profit a transaction lasting 2 or 3 days may not seem like much but because it is risk free, it quickly adds up. Remember, there are no losses to set you back. Consider this : 1% profit for each day money is invested is equivalent to 365% return on an annual basis - an excellent return by any measure.

With arbitrage, you let the Law of Compounding work its magic.

Of course, no one can predict the number of arbitrage opportunities which will occur. Suffice to say that with thousands of sporting events occurring all year round, there is an abundance of arbitrage opportunities.

Is there a possibility, however slim, of default by a sportsbook? Yes, and you should be prudent in the selection of the sportsbooks that you will deal with. Bettors are spoilt for choice as there are many well established and reputable sportsbooks (particularly UK and Australian) to choose from. Of course, you may not always get the best odds when using these established 'names' but this is a small price for safety and reliability.

The arbitrage strategies are completely legal and in many jurisdictions where the sportsbooks are located, the winnings are tax free. As sportsbetting takes place globally, you are responsible for tax liabilities (if any) on winnings remitted.

There is 'no slippage' or other hidden costs. Other than the occasional cost of transferring funds to and from your accounts, there are very few costs associated with arbitrage transactions. You will need to pay for your internet connection ( which most people have any way for email , web surfing, VOIP) and an 'arbs alert' service if you decide to use one. There are no brokerage fees, stamp duties or expensive data feeds. Real time data on prices is available on the web sites of the sportsbooks. There is also no need to be glued to the computer screen all day! It only takes a few minutes to check and put on an arbitrage transaction.

In the span of only a few years, online sports betting is about to become a billion dollar industry. Where there are markets, there will always be arbitrage opportunities. Have no fear that your knowledge of arbitrage techniques will ever become obsolete.

Daniel Tong
(http://www.arbitrage-profits.com)

*You have permission to publish this article in your ezine or on your website, free of charge, as long as the bylines are included. A courtesy copy of your publication would be appreciated.

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