Arbitrage sports betting has arisen in the recent era due to a combination of technological advancements, increased competition among bookmakers, the sophistication of bettors, and market inefficiencies.
The international online gambling and betting industry was worth $63.53 billion in the year 2022. Experts think it will grow successfully and reach $184.28 billion by 2032, a 190% increase in ten years. To compare, the global sports betting and lottery industry was worth about $235 billion in 2022. In 2023, the international sports betting industry had more than 200,000 people working and around 24,000 companies.
Arbitrage Sports Betting – An Overview
Sports betting arbitrage is a plan of action that is about the possible end product of the event to get some financial gain. Arbers does this on all the possible events just to gain the financial benefits despite the fact what the results are. At some level, even bots are used to arrange wagers.
People are trying really hard to get into the betting industry, using all possible ways and applying strategies. That’s the hitting point when players usually bet on the event to get the best possible results out of it. This is a risk for bookmakers’ businesses, so they don’t regulate it and take possible steps to combat it.
Explaining the Arbitrage Sports Betting by an Example
Suppose a tennis match where arbing means placing two bets, one on each player to win. In a football match, there would be three bets: one on each team and one on a draw. Arbers place bets at different companies or the same one. Arbers do this to guarantee profit by finding the right combination of odds and bets called arbitrage opportunities.
For example, let’s look at a made-up match with these odds:
- $45 on Player 1 to win
- $50 on Player 2 to win
- $100 on a draw
If a person bets $195 like this, they’ll make a profit no matter who wins; bookmakers have set this rule.
To find these opportunities, bettors keep an eye on odds from different bookmakers and use different tools to calculate potential profits.
Approaches for Arbitrage Detection
AML (Anti-Money Laundering) and KYC (Know Your Customer), are the two ways that play an important role in the betting industry. They are important for legal compliance and mainly in maintaining an image of trustworthiness. By complying with the regulations of KYC and AML, the system ensures to meet the regulatory requirements, avoids penalties and combats the scams of identity theft and unauthorized account access.
The fight against arbitrage betting isn’t limited to individual betting platforms; it is also a concern for the entire industry. Therefore, collaboration among betting companies, regulatory bodies, and technology providers is crucial. Sharing information, data, and innovative solutions can strengthen efforts to combat arbitrage sports betting, ensuring the long-term sustainability and growth of the sports betting sector.
Here are the different methods to find arbitrage opportunities:
Verification of Bank Card
To authenticate the users, bookmakers can confirm users’ identities using bank card information for added security. The system also limits users to approved payment methods.
Anti-Money Laundering (AML) Screening
The system checks a person’s background in external databases to see if they have a history of criminal activity.
Verification of Liveness
This checks if the account owner is authentic by verifying users with their biometric data. It also prevents users from creating multiple accounts.
Consequences and Legalities of Arbitrage Sports Betting
Arbitrage sports betting can cause problems for both bookmakers and gamblers. Bookmakers lose money, and they have to spend extra time dealing with bets which are unfair. Gamblers who do arbitrage betting might face bans or limits from bookmakers. This kind of betting can also affect regular gamblers because bookmakers might tighten security measures, which could accidentally affect them too, even if they’re betting moderately.
Arbitrage sports betting is often looked down upon, but it’s not against the law. It’s been around for a long time, but bookmakers try to stop or ban gamblers who do it. They also charge fees, making it harder to make a lot of money from arbitrage betting.
Final Verdict
Arbitrage detection is the most demanding one in the recent era because of the huge financial losses of bookmakers, which have made the system fraudulent. Security departments of betting companies should identify the red flags of the person who is an arber but pretending not to be one. The system should comply with KYC and AML procedures to get this done faster so that reliability can be maintained and detection can be done more quickly. Arbitrage sports betting is one of the leading systems that should follow the regulatory measures to combat it and fight against it.
