Donkey Face said…

I also wrote a bot to do Asian Handicap arbitrages on a sporta betting exchange a few years ago. When it got filled it only made a few pence. But most of the time it got legged out and lost more than a few pence.

Friday, January 5, 2018 at 4:56:00 PM EST


Stephen said…

To clarify, my intention was not to imply that sports arbitrage is something new, the novelty was meant to refer to the use of the sports asset class to help a new trader bootstrap his capital for use in other, more scalable asset markets. But perhaps I should have re-worded the title slightly …

Although not well known, these arbitrage techniques have indeed been around for a long time – for good reason, they can be made to work for significant periods of time.

You are right of course about the main problem and I point this out at the end of the article. Unfortunately it would require another chunky article to bring justice to the subject of risk mitigation of bookmaker limiting. Most bookmakers will indeed shut you down if you seem to have a system for ‘winning too much’ – regardless of whether you are using arbitrage. It used to be the case that bookmakers were especially worried about arbitrage because there existed many ‘self-arbitrage’ opportunities within the same bookmaker. Today though, it is rare to come across such a lack of sophistication. Today however, there are a growing number of ’arbitrage friendly’ bookmakers (Pinnacle the most prominent example) and of course the betting exchanges.

If no thought or organisation is applied to account management then I would agree that your sports arbitrage career will be over quickly. It is not realistic to expect to never be limited by a bookmaker, but with careful use of arbitrage friendly bookmakers, exchanges and some other risk mitigation techniques, the method becomes viable for extended periods of time (long enough to bootstrap some decent seed capital as I am suggesting). Also, one must bear in mind that the bookmaker landscape is constantly shifting with new companies entering the market frequently.

Saturday, January 6, 2018 at 6:12:00 AM EST


Stephen said…

Thanks for your comments Donkey Face,

Your experience of using automatic bots on betting exchanges is not too surprising, but it does illustrate a key difference between the exchanges and the bookmakers and why the combination is important.

The exchanges have api’s allowing automatic execution but they can suffer sometimes from poor liquidity. It can be difficult to find trades where each leg resides on a betting exchange and at the same time, all of the legs can accept a stake size large enough to make the trade worthwhile. Bookmakers on the other hand can generally accept much larger stake sizes ( several £k on the more popular markets) but the execution must be done manually online. Therefore, in general, there are more sizeable opportunities within the bookmaker landscape. Though it is important to use exchanges where possible for the reasons mentioned above in an earlier response.

Quantitative trading: a novel capital booster: sports arbitrage for good

Saturday, January 6, 2018 at 6:14:00 AM EST


Anonymous said…


sorry for asking maybe stupid question. I am trying to figure out how you got percentage from odds for payoff matrix in second example.
I was able to follow first example but it will be nice if you can provide more details.

Thank you

Thursday, January 11, 2018 at 1:58:00 PM EST


Stephen said…


No not a stupid question. It's a linear programming optimisation. Most of the complexity is in setting up the constraints matrix. If you contact me directly I can give you more details.


Thursday, January 11, 2018 at 4:59:00 PM EST

Quantitative trading: a novel capital booster: sports arbitrage Pinnacle the most prominent example

Anonymous said…

Dear Stephen, I was very interested to try this out by playing small. I just realized in Singapore that it is illegal to place bet online. Unless the bet is place out from Singapore I guess, I have to let go off this opportunity. Thank you for the good read.

Thursday, January 25, 2018 at 9:05:00 PM EST


rob said…

Made a quick and dirty app to look for basic (3 way football / soccer) arb opportunities!

Sunday, March 18, 2018 at 11:22:00 AM EDT Resourse:

Trading 2.0 _ La référence pour vos arbitrages de marché




Quantitative trading: a novel capital booster: sports arbitrage
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