Arbitrage is generally used in economics. An arbitrage occurs when there is price difference between two or more markets and, to make money on the imbalance, matching deals are struck with the parties involved. Profits are made on the differences between the different market prices.
Arbitrage in sports occurs when the opinions given by bookmakers on the possible outcome of the competition vary, or in some instances, when the odds listed are erroneous. If a bettor wants to make money on this discrepancy, he would place bets on the different perceived outcome. Since bookmakers do not condone this activity (may translate to losses for them), bettors normally place bets with different betting companies.
Arbitrage betting is also known as “risk free betting” although, since this is still about gambling – a game of chance, there is still a certain degree of risk involved. Common risks involve a change in price halfway through the betting process, refusal of some bookmakers to honor the bet; and (if the bookmaker loses), the probability that the book maker would not remain solvent (may take longer before money changes hands)
To be involved in arbitrage betting, you must do some research on the odds of the game and / or race. When you’re satisfied with the results, you then place bets on different betting companies and at the end of the competition, you collect your winnings (or walk away empty-handed). Arbitrage is done in most sporting activities, and horse racing is one of them.
Any bettor can involve himself in arbitrage betting. This may be done personally or through the internet. Since most book keepers will not agree on arbitrage bets, it may be harder to complete arbitrage transactions on a face to face basis. Most bettors of arbitrage find it easier to make these kinds of bets on-line. They simply need to register in different on-line betting companies and they are good to go.
It is possible to arbitrage a horse race, and there are several websites that help people understand the concept. These websites also have tools such as on-line calculators where you can plug in the odds and the bets. These tools aim to give users an idea on how much they stand to earn (or win) when a horse race is arbitraged.
Many people opt to place arbitrage bets because technically, you win something no matter who wins the competition. However, since this technique almost assures one of a win, the thrill and suspense of rooting for your horse is simply not the same.