How I got banned from sports betting... - Arbitrage Betting Explained

I know you're thinking that thumbnail was clickbait, but it's not. It's definitely true! Today, guys, I'm going to go through exactly how I got banned—I'm not joking—how I got banned from a sports betting website here in Australia. This is actually a pretty funny story. It's a classic example of when the house doesn't win and what happens when the house doesn't win.

As the title suggests, when the house doesn't win, you get kicked out the front door. So, what I'm going to do today, guys, is talk about how I got banned from sports betting, but the strategies that I put in place that made me get banned from sports betting because that is the interesting stuff. So, guys, I hope you enjoyed this video. Leave a like on it if you do enjoy! This is going to be an interesting video, a little bit different to usual, but I actually think you guys will really enjoy it. So, leave a like if you do! Subscribe to the channel if you haven't done so already. But for now, let's get started.

So, this is back in 2015, right? Back when I was, you know, in uni during the day, you know, watching footy on the weekends, that sort of stuff. I didn't really have too much going on in terms of employment, but I did work at a gym back then. I worked the gym floor, and for the gym floor, yeah, it was crazy! I had to wake up at 4:45 in the morning to get to the gym to open the gym at 5:30. The reason I bring that up is because when the first time that I actually thought—because I actually thought this strategy up in my head—it was pretty weird, because on my way to work, I just had this thought about this betting strategy I could do that would make me money.

At the time, I was going around telling everyone; I literally thought I was the first person on Earth to ever think up this betting strategy. I thought I was just amazing! I was like, “Ah! I've just won life! I've just done it! I've done it!” So, it was a very cold 2015 winter's morning; I remember it quite well. On my way to work, at about 5:15 a.m., I thought out this strategy, right? The concept that I had, that I thought of, was the concept of arbitrage betting.

Now, arbitrage betting is essentially betting in situations where the probability that you're going to lose money is zero. So, you cannot lose money through an arbitrage bet. Now, I know what you're thinking—you’re thinking that this is impossible, right? Turns out, it's not impossible. It takes a bit of thinking, but it's not impossible, okay? It's rare, but the opportunities do present themselves, and that's what I'm going to talk about today.

The reason that you don't hear too much about arbitrage betting is because most people just at face value think that it doesn't work—like, of course, the house always wins, right? We know that the house always wins, but arbitrage betting is an interesting workaround where you can still make money even though the house always wins. So, anyway, back then, I just could not stop thinking about this strategy. In fact, I'm pretty sure I told everybody at the gym that day. I singled people out and said, “Have you ever thought about this?” I thought it was genius!

Anyway, so the way that it works, right? So, with arbitrage betting. So, let's take it back a step—when you go online on two different bookmakers' websites, okay, the odds of a particular event usually vary slightly between different bookmakers depending on what the bookmaker thinks is going to happen, right? So, the odds that you might get on a tennis match over on, say, Sports Bet will be different to the, you know, odds that you get over on, I don't know, what's an online one? Like, Bet365 or something like that.

So, for the same event, you're going to get different odds across different sites. Now, arbitrage betting is using the difference in odds across different betting sites to find the best possible deal for one event to happen, and then finding the best possible deal for the opposite event to happen. Using that difference in odds across platforms, you work out a situation where you can bet both ways on the event, and no matter what, you still make money.

So, I want to talk through an example because it's actually really cool when you can wrap your head around how arbitrage betting works. So, say when you're looking at online betting sites, you find that Roger Federer is versus Nick Kyrgios. On one side, you've got Roger Federer to win at a dollar thirty, but on the other side, you've got Roger Federer to win at one dollar and forty-two. Okay, so there's differences.

Then you look at the flip side; on one betting site, you've got Kyrgios to win at three dollars and ninety-three cents. Then on the other betting website, you've got Kyrgios to win at two dollars and ninety cents. So, if you have a look at the sites individually, you've got site one: Federer at a dollar thirty, Kyrgios at three dollars ninety-three. So, that site thinks that Roger Federer is going to easily beat Kyrgios, whereas on betting site two, they think it's going to be a closer game; they've got Roger Federer at a dollar forty-two and Nick Kyrgios at two dollars and ninety cents.

Now, of course, this is just hypothetical, but it's going to work for the example of the arbitrage that I want to teach you guys. So, obviously, if you just look at the sites individually and you bet just on one site, you're never going to win because the house always wins, right? The house always takes their profits; they make sure of that.

However, if you start looking across different sites, that's where you start to make money. So, the next step in our process—what we've got to find is the betting odds margin. So, what the betting odds margin actually deals with is it looks at all the possible outcomes and the odds for each, and it works out in total for that event what profit margin is the bookmaker taking.

And this is the formula you use to work that out, and this is for an event with only two possible outcomes. So, chuck the formula up on the screen—it looks a bit intimidating—but essentially, for a two-outcome event, it's just taking into account the odds of the first one happening and the odds of the second one happening and working out overall what sort of payday is the bookmaker giving themselves.

So, if we analyze the first bookmaker, the first online betting site, we put in our numbers for Federer, putting the odds for Federer and put in the odds for Kyrgios, okay? Then we come out with a number out of this formula of one hundred and two point four percent. So, what that means is that the bookmaker is giving themselves a 2.4 percent profit margin.

Then, if we have a look at the second betting site and put in the odds that we can get from that website, we put those into the formula, and we get a number of one hundred and four point nine percent. So, what in this case? The second betting site is giving themselves a four point nine percent profit margin.

So, every time you just look at one site and use this formula on one side, you're always going to get a number over one hundred percent, okay? Because that's how the bookmaker is making their money. Right? If you get a result that's below one hundred percent, you have an arbitrage opportunity.

So, how on Earth does this happen? Well, what we've got to do is we've got to take the best odds from both of the websites. So, what we're going to do is we're going to take Federer to win at a dollar forty-two from site number two and then we're going to take Kyrgios to win at three dollars and ninety-three from site number one. Now, if we enter those numbers into our formula, we get ninety-five point nine percent, okay? So, that is now four point one percent to us.

So, what this means is that if we placed an unbiased arbitrage—okay, therefore, we don't change our bet amount depending on who we think is going to win—we got completely unbiased arbitrage, we're going to make our four percent. So, turning back to the formula, we know we've got an arbitrage opportunity, and then the next step is to open up the arbitrage calculator to figure out how much we need to bet both ways so that we can make the same amount of money regardless of the outcome.

So, remember in this example, we're doing an unbiased arbitrage, so we're going to make the same amount of money no matter who wins, okay? So, say we only have $100 in total to bet. Well, the arbitrage betting calculator has figured out that the way we should do it is that seventy-three dollars and forty-six cents for Federer to win at one dollar forty-two on site number two, and then bet the other way—bet twenty-six dollars and fifty-four cents on Kyrgios to win at three dollars and ninety-three cents on site number one.

This means that whoever wins, we're going to make four dollars and thirty cents because it was an arbitrage opportunity. All right? The calculator, the betting odds margin, told us that it was an arbitrage opportunity; therefore, if we treated it as unbiased arbitrage, we are destined to make money from placing these bets, and that's the power of arbitrage betting.

Of course, it doesn't really faze the individual bookmakers, but it gives us opportunities at times where the odds of an event differ greatly, okay? On different sites. So, that's arbitrage betting and how it works.

And this, of course, leads us to how the hell did I get banned from doing it? Well, of course, the house always wins, you know, when you're betting at a casino online, whatever, the house always wins. So, if the house doesn't win, they get pretty annoyed. Okay? So, what happened was, back in 2015—I don't know if they still do it, but if they do still do it, it's probably something you might want to look into—anyway, Ladbrokes did this promotional offer which was $2.00 Friday night favorites on the AFL, right?

I'm a huge AFL fan; absolutely love Port Adelaide—Go the Power! But they did $2.00 Friday night favorites, and they always did it! So even in Friday night matches where the favorite was like $1.05 or $1.10 usually, or something like that—like really likely to win—it would automatically be bumped up to $2. Okay? And that frequently, pretty much every single time, opened up an arbitrage opportunity where we could take the favorite at $2 on Ladbrokes and then go over even to something just like Sports Bet and bet the other way to cover our costs so that we could get an unbiased arbitrage and you could always make money.

Now, of course, I did that! I did that quite well. I made—because obviously usually the favorite won, okay? So usually you got your money from the promotional offer, and eventually, I ended up just continually winning so much so that Ladbrokes got very upset and they told me that I was no longer eligible to bet on their platform.

So that's the story! It's pretty funny that the house always wins, and if they don't win, then they pretty much just kick you out the door. It's so true! But I kind of have this odd sense of pride that I got banned—like I did it, you know? Like, I beat the system!

So, okay, that's kind of a funny story. But before I finish up this video, I should say that with arbitrage betting, it sounds absolutely amazing, and for the most part, it is! Like, it is risk-free sports betting—usually, it will be risk-free betting on anything that you can bet on, essentially if you can find those opportunities. But it is worth pointing out that there are risks, and there are things that you definitely need—there are risk factors that you need to factor in with arbitrage betting.

Some of the common ones—like, obviously, odds always change! Okay? So they're constantly being updated, these odds, especially on big events. So you've got to make sure, okay, you've got to make sure that the odds—you can still lock in the arbitrage odds at the time that you want to place the bet. Like, be careful of that!

Another thing to consider is that a bookmaker can cancel bets out of the blue! If you've put a bet on, they can cancel it just for no reason—they can cancel it! So be very careful of that because then that leaves you exposed. If one of your bets has gone through but the other one's bounced, then you're in trouble, right?

And then the other thing to think about as well is that some of these—what a lot of these arbitrage opportunities come up from promotional offers, okay? Whereas with promotional offers, sometimes—or very often—they have a maximum bet on the promotional offer. So make sure that you read all of your terms and conditions and you make sure you know what you're doing and you know what bet amounts you're allowed to place just so you don't get stuck in a situation where you've met one bet, gone to the other site, and then, “Oh! What? The maximum bet on this promotion is only like ten dollars?” Then you're in trouble, okay?

So it's always—I’d urge you guys, if you are more interested in arbitrage betting, you've got to do the research! Like anything, right? You've got to research the risks of it and make sure that you don't expose yourself to running into some of these traps.

But yeah, that's arbitrage betting! That's the story of how I got banned from Ladbrokes—who would have thought? I'm actually pretty proud of that, to be honest! But I don't do that stuff anymore; I'm much too focused on stock market investing now. The stock market's just like—it's not like gambling, but it's just like, if you compare it to gambling, it's like gambling, but if you lose, you don't lose all of your money! Like, if you're losing gambling, it's gone!

But yeah, definitely check out arbitrage betting, read about it, learn some of the strategies out there if you're interested. That's all I've got for this video. Of course, leave a like on it if you did enjoy it! I think this is kind of just a bit of a fun topic to discuss, but we'll be back into investing in no time.

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And that's it for today, guys! Hope you enjoyed it! I'll see you guys in the next video. [Music] [Music]