Why Riskless Betting Strategies Are Prohibited

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Every sports bettor wants a riskless betting strategy. It would allow them to rake in large sums of money instead of hoping for their teams to come through. It’s easy to be cynical and say that there are no riskless betting strategies. Sportsbooks are designed so that bettors always put some skin in the game. That not only encourages bettors to come up with their own strategies. But it also ensures that sportsbooks remain profitable after paying out winnings.  

However, there are risks and limits to riskless betting strategies. First, riskless betting strategies can’t get bettors around the vig. Second, riskless betting strategies often rely on ways that game sportsbooks. These tactics range from prohibited on sports betting platforms to illegal in the eyes of the law. So, while riskless betting strategies exist, they may land bettors in more trouble than the extra money is worth. 

The Vig And Why Riskless Betting Can’t Get Around It 

Sportsbooks also build in a house advantage to every line. This extra percentage off the top, called the vig, is an invisible cost attached to each set of odds. If bettors convert the odds to percentages, they can estimate the vig by seeing how much higher the sum of the odds is than 100%. (It’s usually between 102% and 106%.)

This is the limit of riskless betting strategies. They can keep bettors from losing their money. But it cannot get around the vig. Bettors will always be stuck with that cost no matter what riskless betting strategy they try to use. 

However, bettors can choose sportsbooks that have low vigs on the lines they’d like to wager on. For example, DraftKings may have a 4% vig on a line where FanDuel has a 5% vig. If bettors are placing large bets over a long period of time, then this small difference matters. However, for most bettors, these are small differences with little impact on their bottom lines.   

Arbitrage Betting: The Best-Known Riskless Betting Strategy

Arbitrage betting is a term that professional bettors love and sportsbooks despise. Professional sports bettors love it because it guarantees them profit. Sportsbooks hate it because it chips money off their bottom lines and cash from their reserves. 

Arbitrage betting is betting money on both sides of the line so that bettors win no matter what. However, bettors don’t place the same amount of money on both sides of the line. One side will have a clean whole number, like $100. But the other side will have an oddly specific amount, like $67.49. There are arbitrage calculators online that will show bettors how much money they have to put down to make this betting strategy work. However, if this sounds too good to be true, it’s because it often is. 

Everything That Needs To Happen For Arbitrage Betting To Work 

Arbitrage betting requires a few conditions to work properly. First, the implied probabilities of a sportsbook’s odds must be less than 100%. For example, a set of moneyline odds of +290 and -233 could be converted to 25.6% and 70%. The implied probabilities are less than 100%, so there’s an arbitrage betting opportunity. 

However, sportsbooks know about this strategy and set odds to ensure that arbitrage betting is impossible. That forces bettors to look at other sportsbooks to find those opportunities. However, there’s yet another complication. Major sportsbook companies know how they price lines, too. Arbitrage bettors are the shared enemy of all of them. So, they can set prices to ensure that arbitrage bettors can’t take advantage of the differences in their lines. 

But all is not lost for arbitrage bettors. In a large sportsbook market, sportsbooks can’t watch or depend on each other constantly. So, arbitrage betting opportunities are inevitable. Odds may also move differently at different sportsbooks, which is an unavoidable consequence of doing business as a sportsbook. So once again, arbitrage betting opportunities are inevitable. 

Potential Consequences Of Arbitrage Betting 

Sportsbooks dislike arbitrage bettors because they get free money from sportsbooks. If every bettor could successfully pull arbitrage betting off, then they could bankrupt every sportsbook they played at. So, sportsbooks will suspend or ban accounts they suspect of or catch arbitrage betting. 

Some bettors believe this is unfair. Arbitrage betting is a legal betting strategy. So, they feel they shouldn’t be punished for using intelligent betting strategies. But sportsbooks have a legitimate interest in not losing money. Their profit margins can be as low as 1-10%, depending on the sports season, sportsbook, and pricing strategy. If sportsbooks are operating on low margins and take losses, further losses eat into the money available to pay winners. There’s a cash cushion in place for such an occasion. But sportsbooks want to avoid having to use it. 

So, arbitrage bettors and sportsbooks are locked in an eternal battle of subversion, disdain, and retaliation. 

Riskless Betting Doesn’t Work In Most Settings

Arbitrage betting is made possible by movements in odds and the binary choices offered by sportsbooks. However, there’s no comparable strategy available in investing. 

Holding a long and short position in stock would be allowed, but would cost the trader money. (The trades would cancel out, then the trader would likely be charged a commission fee.) Stocks aren’t priced against each other like sports teams are, either. In a Broncos/Cowboys game, only the Broncos or the Cowboys can win. But if a trader holds stock in Apple and IBM, both stocks can increase, stay the same, or drop. They move independently, so traders aren’t forced to accept the risk associated with picking one or the other. 

Arbitrage betting games the system of sports betting and takes advantage of quirks in the system. Even though it’s riskless in terms of bettors’ money, it’s not riskless in terms of their accounts. Sportsbooks are more than happy to award money to bettors who play by their rules. But sportsbooks have no obligation to allow arbitrage bettors on their platforms.

Riskless betting can do a lot for bold bettors. But it can’t get them out of paying the vig, and it can’t protect their sportsbook accounts. There’s no such thing as a truly riskless betting strategy. But if all bettors care about is their money, then there’s at least one way for them to protect it, consequences be damned.

About the Author

Christopher Gerlacher

Christopher Gerlacher is a senior author and contributor for Gaming Today. He's a devout Broncos fan, for better or for worse, living in the foothills of Arvada, Colorado.

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