Bonus and arbitrage: a golden duo?
What is arbitrage and how can it be utilized or should it be? Next, we offer a brief but concise information piece that provides additional tools for your betting arsenal.
If you have bet even a little more and familiarized yourself with the subject, you cannot have avoided hearing the word arbitrage. It’s time to open the bettor's handbook at the letter A and address what arbitrage means and how it relates to betting and bonuses. Although perhaps more precisely, it should be expressed how arbitrage can be utilized or even constructed using bonuses.
Let’s kick things off with some theory so that you better understand what this is really about and why it’s worth utilizing this opportunity in your own gameplay. Although it is somewhat of a grand-sounding and peculiar word that hardly even appears in the Selected Pieces dictionary, in the end, it is not really anything very difficult.
Arbitrage refers to a theoretical situation where the price of the same “product” differs on two marketplaces. For example, if a carrot is sold for €1 each at the Imatra market and at the neighboring city of Lappeenranta market it is sold for €5 each, one could make a risk-free profit of €4 on each carrot by buying them in Imatra and selling them on in Lappeenranta.
So, this is a simplified example. In other words, there is inefficient pricing in the markets, which leads to opportunities to make guaranteed returns by trading the same instrument with different traders. For example, in stocks, this could manifest in such a way that the price development of shares listed on Nordea’s Stockholm stock exchange and Helsinki stock exchange would, for some reason, proceed at different rates. Ultimately, it’s about the exact same company, so discrepancies in valuations would practically mean an arbitrage situation where one can buy shares cheaper from one exchange and sell them at a higher price on another exchange.
Next, let’s take a closer look at how arbitrage works and can arise in sports betting.
Arbitrage in Betting
To ensure things don’t get completely out of hand, let’s move the following examples directly into the world of betting. In practice, arbitrage means that the price differences of a single event between two different bookmakers are different, and the player can make a profit by betting on each betting option. So, if for example, Team A has odds of 2.05 and Team B has 1.95 at the first bookmaker, but another bookmaker has rated the odds for A at 1.95 and for B at 2.05, an arbitrage situation has arisen in the market.
A smart player would then bet on Team A at odds of 2.05 on the first site and place an equal amount on Team B at odds of 2.05 on the second site as well. In this case, the profit, or return, would be 100% certain, as whichever team wins, the player would be up by 2.5%. If you bet on Team A, you earn 2.05 units, and if Team B wins, you also earn 2.05 units.
Of course, the profit may be quite small when betting with a smaller stake, but it is 100% certain. If you were to bet €100 on the same event on both sites, you would end up with a profit of €5. On the other hand, if you were to stake €10,000 on both events, the player would walk away with €500 of completely free money and risk-free profit.
It’s worth being careful, as often there are stake limits set on events, and the odds also fluctuate according to betting volume. After the first stake, the risk is that you cannot get the same amount in on the second option or that the odds drop. This, in turn, directly means the arbitrage opportunity disappears and the differing market situation balances out.
How to Utilize Arbitrage and Betting Bonuses
Finding arbitrages can be a bit tricky, as they may not be available in the market every day or week. The odds setting by bookmakers has become so dynamic and real-time that opportunities arise less frequently. However, if pricing discrepancies are found, the player should ideally have access to at least over 20 different companies' betting accounts to take advantage of these opportunities.
But finally, to the main point: did you know that you can create a kind of arbitrage situation for yourself using bonuses? The process essentially works in such a way that whenever you accept betting bonuses, it’s advisable to operate with a two-lane tactic. If you don’t yet have many accounts set up for betting, it might even be wise to juggle three or four bonuses at the same time to always choose the best odds for your purpose.
As you surely know, almost all betting bonuses come with some kind of wagering requirements. Meeting these requires a certain amount of betting, during which the main goal is to retain the extra capital obtained on the house's account and remove the bonus money's lock for withdrawals. In this case, it is absolutely beneficial to create a certain type of arbitrage for yourself using a couple of different bonuses. Always choose events that are binary, meaning they only have two options. In other words, these include so-called Moneyline bets, where you bet on the winner of the match without draws, or over/under bets, which always have exactly two options.
Look for an event on the sites with active bonuses where the odds from two different bookmakers are as close to each other as possible. For example, if you manage to find odds of 2.00 for Team A from one site and 2.00 for Team B from another site, you can wager your entire bonus amount fully once without risk. If you have, for example, a €100 bonus and you bet it in the described scenario, you will definitely have €200 in hand on one of the betting accounts and you will have wagered the amount fully once. Now take another account and bonus and you can repeat the move again. In the best case, you can thus roll the bonus in without risk or with very low losses compared to random betting.