- Betting Exchanges
- Backing an Outcome
- Laying an Outcome
- Probability and Value
- Step 1
- Step 2
- Step 3
- About Valuebets
- Using Valuebets
- About SureBets
- All-Back SureBets
- Back/Lay SureBets
- SureBet Strategy
- Speed Matters
- Voiding Risk
- Betting Order
- Deposits & Withdrawals
Advanced Tricks & Betting Secrets
Betting exchanges are like any other exchanges: Places where objects can be bought and sold, contracts made. You don't bet against the exchange, like betting against a bookmaker, you bet against other users of the exchange.
The terminology may sometimes be a bit different, but the basic principles are just as at financial exchanges. And as financial exchanges have proven to be efficient mechanisms for trading shares, options, and other kinds of securities, so have the betting exchanges proven successful in the world of online betting.
When you log on to a betting exchange, you'll see a set of odds and volumes. They represent betting offers put up by other members of the exchange. Here's a typical situation, representing the market for Brazil to win the World Cup:
Backing An Outcome
You can back Brazil to win at odds 4.80 and at most with EUR 1,000. This means that other exchange members are offering odds 4.80 to you, each with some amount, totaling EUR 1,000.
If you want to bet for Brazil, 4.80 is thus the best price you can get at the moment. If you bet EUR 200 at these odds, your bet will immediately be matched, and you're on! You can place a betting offer at higher odds, for instance stating that you want to bet EUR 200 at odds 4.90. That offer will then stay at the exchange until, possibly, someone takes you up on it.
When the EUR 200 bet at 4.80 was matched, the EUR 200 was locked at your account. If Brazil go on to become World champions, then you'll get them back plus receive the profit of your bet. EUR 200 x (4.80 – 1) = EUR 760. If not, you've lost the bet and the EUR 200 is paid to the counterparty at the exchange.
The exchange is not counterparty to your bet. They don't care if you win or lose. What they provide is an efficient and anonymous mechanism for entering and matching betting offers and a mechanism to ensure, that you get paid. When you enter a bet with someone, their potential loss from the bet will be taken from their account at the exchange and held by the exchange until the bet is settled in order to guarantee that they can pay winnings to you.
You'll see that there are offers for you to back Brazil both at 4.80 and at 4.70. Assume that you want to bet a total of EUR 2,000 for Brazil. You can then place EUR 1,000 at 4.80 and EUR 1,000 at 4.70. In total, you placed EUR 2,000 and got average odds of 4.75.
Sometimes, the volume at the best price is quite low. For this reason it's good to know what the 2nd and 3rd best prices are. If you place your mouse pointer in the odds tables on an exchange prices the best three prices will appear on your screen.
Laying An Outcome
When your back bet of EUR 200 at 4.80 for Brazil to win was matched, one or more people took the countering position. While you backed Brazil, they layed Brazil to win. They were betting against Brazil to win.
You can do the same, betting against an outcome to happen. This is something you typically cannot do at bookmaker sites and one of the main advantages of betting exchanges.
When you're backing an outcome, you want the odds in the bet to be as high as possible. Conversely, if you're laying, then you prefer to offer as low odds as possible to the guy who backs. So, in the situation above, the best possibility for you right now is to lay Brazil at odds 5.00. You could even offer lower odds, but your offer would initially be unmatched.
Assume that you lay EUR 50 at odds 5.00. If Brazil loses, you get to keep the money of the backer and thus have a net win of EUR 50. If Brazil wins, you have to pay him his net win of EUR 50 x (5.00 – 1) = EUR 200.
So, your risk is EUR 200 and if you win, your net profit is EUR 50. In fact, when you're laying Brazil to win at odds 5.00, it is exactly identical to backing Brazil not to win at odds 1.25 = (200 + 50)/200).
Paying Commission and Commission Free Odds
Betting exchanges make money by charging a small transaction fee. Rules vary from exchange to exchange, but here's a typical way of doing it: The loser of the bet pays nothing, while the winner pays a percentage, e.g., 5%, of his net winnings.
Returning to the back bet of EUR 200 at 4.80, the commission charged would be EUR 0 if the bet is lost and 5% of EUR 760, EUR 38, if the bet is won. Your net win post commission is thus EUR 722. And thus your net (realized) odds are not 4.80 but 4.61 ( = (200+722)/200 ).
So, at commission rate 5%, 4.61 are the commission free odds corresponding to back odds of 4.80. When you compare odds at betting exchanges to odds at bookmakers, you should take the commission into account as you don't pay commission at bookmakers. Similarly, different exchanges have different commission levels, so even though one exchange may have better offers pre commission, another may be the best post commission.
You have the ability to see odds net of commission. You simply register a profile and then enter your commission at the various exchanges. If you're not registered, you can still do it, using a set of default commissions we've entered. We will also show the lay prices net of commission. If you choose to see net odds then the odds table above will instead look like this:
While commission rules vary, two more features are common across most betting exchange:
- The commission decreases with the amount of your betting. Normally, the amounts required to get decreased commissions are quite high.
- The commission is charged on your net win on a market. Assume that you back Brazil to win and then later lay Brazil. In the end, you will both win and lose money on this market. Assume that Brazil wins, that your back win is EUR 100 and that your lay loss is EUR 80. Then you don't pay a commission for the full win of EUR 100 (which would be 5% of EUR 100, EUR 5), but only for the net win of EUR 20, i.e., 5% of EUR 20, EUR 1.
If you bet with a betting exchange, you should check the exact commission rules.
Probability and Value
Here is how we, based on the odds of a bookmaker, calculate the probabilities behind the posted odds. The calculations are done for an event with three outcomes, like a football match ending with either 1 (home win), X (draw), or 2 (visitors win), but can be used quite generally. The only condition is that the outcomes, for which odds are given, are mutually exclusive and jointly cover all possible outcomes of the event.
The calculations above show how to obtain the probabilities intrinsic in the odds of the bookmaker. The bookmaker's probabilities may of course not be correct estimates. When you judge the probabilities to be different, is when you have a good opportunity to make money on a bet.
Step 1 – Calculating the bookmaker's profit indicator
First we calculate what could be termed as the bookmaker's profit indicator. It shows how much the bookmaker receives in stakes whenever he makes a payment of €1. If odds is the (European) odds for a home win, the payout from a €1 bet, then 1/odds is the bookmakers price for a payout of €1 in case of a victory for the home team. The price for paying out €1 irrespective of the outcome of the outcome of the game (where you play all three outcomes) is thus:
In this case the profit indicator shows that the bookmaker receives a stake of €1.181 for every €1 paid out.
Step 2 – Calculating the bookmaker's payout share
If the bookmaker receives the bets in the right proportions, then the payout share (as part of total stakes for that match) for the customers will be:
From the payout share, you'll have the profit share for the bookmaker as 100% - payout share.
Step 3 – Calculating the probability for each outcome
For the final step, multiply the bookmaker's price for each of the three outcomes by the payout share. This removes the part of the price, which is the bookmaker's profit, and leaves only the pure probability element of the price.
The probabilities are thus calculated like this:
Sum is rounded to 100%.
What is a ValueBet?
Value is a purely mathematical way of calculating how good an odds is. You are only using the odds and the probability of the outcome to evaluate the odds. Factors like league position, form, and injuries are not taken into consideration, it is all about the odds and the probability.
The value calculated for an odds is the expected payout for each dollar (currency used in this example) staked. The value calculated for an odds is the expected payout. That is how much you get in return for each dollar staked. You can calculate the value by using following formula:
If the value is above 1.00, then the bet is a ValueBet. This means that your average payout per dollar is greater than 1,00. Each time you bet more than a dollar you will get more than a dollar back statistically. In this way, you should win money in the long run. This assumes that you know the true probability of an outcome, which nobody does when it comes to sport events. When playing the roulette, you know the probability of red as an outcome, 18/37. But when it comes to sport events, like a football match between England and Brazil, you can only guess on the probability. There are too many factors involved to make a precise objection prediction possible.
If you can get odds 5.00 at England to win over Brazil, and England has a 30% chance of winning, the odds will have following value:
Since the value is above 1.00, this is a ValueBet. In other words, statistically you will only win three out of 10 times. But each payout will be five times your stake. This gives a total payout of $15 if the stake is $1 each time. That is an average of 1.5 payout per bet, which is exactly what the value of the bet.
This is how you can use ValueBets
ValueBets is a way to find the very best odds among the enormous amount of odds at the site. It is a method to find the odds, which not only are the the highest for the specific event, but in relative terms, the best of them all.
Notice that ValueBets with the same value, for example 1.05, can have very different probabilities. If you feel like taking a big chance - and maybe go for a big winning - ValueBets with high odds and low probabilities are interesting. Conversely, if you are interested in finding a relatively safe bet, then low odds with high probabilities would be of interest.
What is a SureBet?
A SureBet, or arbitrage bet, is a set of bets where you are sure to win money, irrespective of what the outcome of the event turns out to be. You cannot lose.
At BetOnValue, we cover two types of SureBets, 'all-back' SureBets, where you make sure to win by betting on all possible outcomes, and 'back/lay' SureBets, where you make sure to win by both buying and selling the same outcome.
Consider a tennis match between Hewitt and Federer, where two bookmakers, Book 1 and Book 2, offer odds like this:
The bookmakers here operate with odds that are somewhat different. In fact they are so different, that you can make a SureBet by betting at both outcomes.
Assume you want to get a payout of €100 no matter what happens. By betting €100 / 3 for Hewitt with Book 1 and €100 / 1.55 for Federer with Book 2, you will achieve it. Your total stake will be:
At the end of the day, one of the bets is won and one is lost, but irrespective which one comes through, you will realize a profit of €100 - €97.85 = €2.15. Making €2.15 on an amount of €97.85 is a return of 2.2%. Not bad for an investment horizon of one or two days.
In the example above, there were only two outcomes. But all-back SureBets will work with any type of bet as long as you can cover all possible outcomes. For instance you can make a SureBet on a football match by betting for both home, draw and away.
Let us look at the same example, but now with a betting exchange, Exch, involved. The odds are like this:
The betting exchange charges some commission on winnings, let's say 3% of net profits on bets. This means that the net odds, after deduction of commissions, look like this:
The Lay odds of 2.80 means that it's possible for you to take a bet of Hewitt to win and, net of commission, you'll be required to pay out 1.80 times the stake in case Hewitt defeats Federer, but will receive the stake if he doesn't.
Now assume that you place €100 for Hewitt to win with Book 1 and at the same time lay €100 at the exchange. There are two possible outcomes:
- Federer wins. In this case you lose your bet at Book 1, but you receive the stake for the €100 bet you accepted at Exch. Your net profit is €0.
- Hewitt wins. In this case you have to do a payment of (2.8 - 1) x €100 at the exchange, a net loss of €180. At Book 1 however, you are paid 3 x €100, resulting in a net win of €200 at Book 1. In total, you have a net profit of €20.
In this way you cannot lose and you'll win as much as €20. As with the all-back SureBets, it is possible place the two bets in such a way, that your profit is the same irrespective of what happens.
Subscribing to BetOnValue and the SureBet Calculator
Depending on your subscription at BetOnValue, the SureBets will have some delay in being published. Also depending on your subscription, back-lay SureBets will be included or not. See our BetOnValue subscription products.
From every SureBet, you'll find a link to our SureBet Calculator. When you click through here, you'll be helped to calculating the correct stakes to place. The calculator makes it possible to calculate stakes for the best SureBet of the event. You can also do calculations using the odds from other bookmakers, where the odds may be lower, but which for some reason is more attractive to you, for instance because you have money available on an existing account or that you can bet higher stakes. The SureBet calculator can even make these calculations individual to the currencies you employ at your accounts and the commission you pay at the exchanges involved!
To take advantage of a SureBet, you will have to be signed up at all three bookmakers. The calculation does not include expenses for transferring money to and from bookmakers. There is also a risk of having bets voided by bookmakers after they are placed. Finally some bookmakers require that you bet on more than a single match to accept your bet.
This short guide on arbitrage betting may help you get started and develop some good practices in your betting. It is by no means definitive. You will learn more as you go along, from your own experience and from talking to other people doing it. Take care and bet smart!
SureBets come and go. In particular SureBets involving odds from betting exchanges are very volatile as user actions move prices at the blink of an eye. So you have to be fast.
First of all, you need fast information. Our SureBet Pro product is aimed at this. We look for new SureBets immediately upon receiving every single odds change from the bookmakers and then instantly publish them at the website. It relies on the fastest data collection available.
Note that this, even if it is industry leading, is not true real-time and that the speed also varies from bookmaker to bookmaker, depending on the way we can access their odds systems. We have a dedicated team working continually on both adding more bookmakers and on improving collection speed from existing bookmakers.
As for placing the bets, you'll quickly develop best practices in doing this. Some very simple advice is:
- Keep your account information in a single place with easy access.
- Keep bookmaker browser windows open for later access.
- Always watch the balances at your accounts before placing the first bet in order to avoid having to make a deposit in the middle of placing the bets. You may even have surpassed your credit card limit for the day.
- Check kick-off and don't try to place SureBets immediately before the event starts, as you'll be left with no time to react in case something unexpected happens.
- Don't push yourself! When tired, take a break or stop. You will make errors and risk losing what took you weeks to build up.
Do your accounting
If you bet for profit, you need to know if you're successful. The only way to know is to keep accurate account of your betting. For common betting purposes, with a limited set of accounts, this is fairly easy. For arbitrage betting, you need other ways of doing it, as you will use a large number of accounts to do arbitrage.
The foolproof way of doing this is to look at changes in balances.
- You have 20 accounts with a total balance of €10,000 at the beginning of a month.
- This increases to €12,000 by the end of the month.
- During the month you made (net) deposits of €500.
- Then your profit is €12,000 - €10,000 - €500 = €1,500.
When you calculate the total balance at any given point in time, there may be some open bets. The amounts risked will already have been deducted from your account, yet these bets represent an asset which, if ignored, will be valued at zero. Instead, a simple way of taking this into account is to calculate your balances as if all open bets were voided or settled at odds 1.00. If all open bets are parts of SureBets with returns above 0%, then this is a slightly conservative estimate, yet there is also a risk element to consider. For practical purposes, it is a good measure.
At one of your accounts, you have:
- A balance of €1,500.
- Open back bets with a total risk (stake) of €200.
- Open lay bets with a total risk of €300.
- You should count this as a total value of €1,500 + €200 + €300 = €2,000 when you calculate the total balance.
As for the net deposits, the correct way of doing this is to calculate this from the point of view of the accounts where the money left. So if you make a deposit, don't look at what arrives at the bookmaker's account, look at what left your bank account or credit card or whatever the source of the transaction was. And if you make a withdrawal, don't look at what left your bookmaker account, look at what arrives at your bank account. In this way, you will automatically get all transaction costs included.
The risk of having bets voided
Bookmakers and even exchanges may void your bets even after they were accepted online. The typical reason for doing so is that the odds posted were 'obviously wrong'. Once you've placed the bets constituting a SureBet, having one of them voided will leave you exposed to lose the other bets without any win, in case the voided bet was the winning one. The prudent action is then to place a loss-minimizing bet by taking the second-best price you can get, even if it means locking in a small loss instead of a small win.
Unfortunately, many bookmakers won't even notify you of the voiding, in which case you'll be likely not to find out until after the fact. This implies that you have to assess the risk of voiding before placing the bet.
If odds look likely to be posted by an error, which is typically the case when the SureBet return is very high, be careful. For high return SureBets, use the odds comparison table at BetBrain to see which of the bookmakers has the most extreme odds. This is the one you should be wary of.
Asking the bookmaker to confirm the odds before placing the bets is a good idea, but will obviously often mean that you miss out on the SureBet because the odds will have changed by the time you get assurance that they are ok. Still, this is advisable. SureBetting is about many small accumulated returns, not about the big kill. And if you have bad luck after voiding, you'll be a long time recovering your loss again. One possible action to take is to check bets you consider risky in terms of voiding after placing them. You might do this shortly after placing the bet. Or regularly, say daily until the bet is settled.
Exchanges tend to void considerably less frequently than bookmakers. After all, they didn't post the odds. Still, it may happen. One example could be that the exchange discovers that incorrect match info was posted, for instance wrong home team or wrong kick-off time. They may then cancel all bets made and restart the market. And you've lucked out. The same goes for bookmakers, so check event information as well as odds before placing bets.
Order of placing bets
When you place a SureBet, obviously you need to place the component bets in quick succession in order to avoid getting caught by odds changes. You accomplish this by opening all the bookmaker pages, creating the betting slips, and entering the required amounts everywhere, proceeding until the bet confirmation stage everywhere, before confirming the first bet.
The order of placing the bets is certainly not irrelevant. Always start by placing the bet(s) that are least likely to be accepted. Bet size is a major concern here.
Some bookmakers (and all exchanges) announce the volume accepted / available for betting in the betting slip or at least at the final stage prior to confirming the bet, but many bookmakers won't announce the bet limit prior to actually placing the bets. So you may end up placing one side of the SureBet but only being able to get on half the amount for the other side, in which case you'll have to fill up the remainder with the second best price on that side, if at all possible. To avoid this, start by placing the bet with the highest risk of being limited in stake.
For bets involving only betting exchanges, start by placing the one with the least liquidity, as this has the highest probability of disappearing in the process of placing the bets.
Deposits and withdrawals
Transaction costs can potentially eat away large parts of your profit.
Assume that you want to place a €1,000 SureBet with a return of 1.5%. If you use three bookmakers, all with a 1% fee on credit card deposits and a 2% fee on withdrawals, you'll end up losing 1.52% if you make deposits and withdrawals immediately before and after the SureBet:
- To obtain €1,000 in total at the three accounts, you spend €1010.10.
- The €1,000 then grows to €1015 by way of the SureBet.
- And after withdrawing the money to your bank account, you're left with €994.70, a loss of 1.52%.
So, approximately, your return is equal to the SureBet return less the sum of the two transaction costs, 1.5% - 1% - 2% = -1.5%.
So, when you make deposits and withdrawals, look out for cheap options. Credit cards are often the most expensive ways of transacting, while online payment solutions such as Moneybookers and Neteller will often be cheaper. Fees for the same service vary a lot between bookmakers.
You might be tempted to think that the example above means that the SureBet return should then exceed the sum of transaction costs in order to be profitable. This is not the case if you follow a better transaction strategy. It does, however, require that you have liquidity to spare.
- Start by depositing not €1,000 but €10,000. You incur a cost of €101 in order to do this. So you've spent at total of €10,101.
- Now you place your €1,000 SureBet at a return of 1.5%. You make a profit of €15 and you have the balance increase at one of your account and diminish at other accounts. The total balance at your accounts increase to €10,015.
- Do it again next day, and you'll make another €15. Again, one of your accounts will get a large win and the others will decrease. The total is now €10,030.
- Continue like this. You will only need to make another deposit in case one of your accounts runs dry. This is however unlikely to happen as the bets are relatively small compared to the starting balances at the accounts. It is small in the same order of magnitude as the probability of tossing a coin and getting Heads ten times in a row, very small. We conclude that you may continue to bet without making more deposits.
- After many bets, the total balance has increased to €11,000.
- Now make a withdrawal of €1,000, bringing down your total balance to the initial level of €10,000. The cost will be €20. Your profit at this stage, net of transaction costs will be €1,000 - €101 - €20 = €879.
- As you continue to increase your balance through SureBetting, you can keep making withdrawals. From now on it's just the profit which is decreased by the 2% transaction cost. For every €1,000 betting profit you make, you pay €20 to get the money in hand.
- The restrictive assumption above is that you have deep enough pockets to never make a withdrawal until the balance is sufficiently high to make you sure that the withdrawal will not trigger a subsequent deposit at the same account.
- To put the reasoning above very short: Never withdraw money from an account where you may later need more money. Then you can make money even of SureBet returns much smaller than the transaction costs!
Using the SureBet Calculator
For optimal use of the SureBet calculator, here are some tips:
- NOTE: It is assumed in the SureBet calculator, that you use the EU (decimal) style odds format. This is for convenience in the calculations. Errors will appear if you have the SureBet page in another odds format and try to do SureBet calculations.
- There may be SureBets you can't take advantage of, as you can't get an account with one of the bookmakers involved. Simply go to My Bookmakers and remove this bookmaker from your list. It will disappear from all odds tables, the SureBets page and the SureBet Calculator.
- As you inspect the SureBet page, take it from the top. The top SureBet can either be exploited by you or is for some reason uninteresting. Either way, once you've investigated it, you can remove it from the page by hiding all SureBets that involve one or more of the bets involved. In this way, as you work with the page, it will become a to do-list of uninvestigated SureBets. The shorter the list, the easier it is for you to overview. Combined with the true push-solution that publishes SureBets directly to your browser without any need for a refresh you have a very efficient system for detecting and exploiting SureBets.
- In an ideal SureBet, stakes are calculated such that the profit is identical no matter the outcome. For practical purposes, we round off the stakes to the nearest integer. This means that the profits per outcome are slightly different. For every outcome, you can check the profit in case this outcome happens.
- The currency of the profits is identical to that you chose for the total risk.
- Note that for lay bets, the stake mentioned is the stake of the bet you accept. It is not the risk you undertake. If you lay a stake of €200 at odds 5.00, your risk is €200 x (5 – 1) = €800. For this reason, the stakes in a back-lay SureBet don't add to the total risk.
- When dealing with betting exchanges, you'll often be limited by an amount available. This even happens with bookmakers with restrictive bet limit policies. For these cases lock the stake of the restrictive bet to its maximum size in order to calculate the rest of the stakes, including the total risk.
- You can calculate SureBets even when the account currencies are not identical. We update exchange rates hourly from the European Central Bank. While you may at any time change the currency settings, the default values will be those set by you at My Bookmakers.
- You can manually adjust the commission rates for betting exchanges in the calculator. The default rates shown are those you chose at My Bookmakers.
- You can manually adjust the odds. Say that you go to a betting exchange just to find out that the odds are slightly different than what we show at BetOnValue. Then just enter the new odds, click Calculate, and check for profits.
- The calculator allows you to try out other odds than the best odds available. Simply select another bookmaker from the drop down list. This is useful for instance when
- You don't have an account (or sufficient money) where the highest odds are, but you do have at another provider with almost as good odds.
- Odds have changed at the bookmaker with the highest odds.
- Odds may be updated at BetOnValue while you're working in the SureBet calculator. The odds in the SureBet calculator will however remain fixed.
- If you use the accounting system then you will also get the links for registering each of the comprising bets.