Gambling question...

[AbeFroman]

I don't gamble on professional sports. But I often check the lines for NFL games, just to see which teams are best favored for my survival football league. Why I was browsing the lines, I had an epiphany:

 

The following situation occurred last week:

 

On PinnacleSports.com, the Denver Broncos were 14.5 point favorites over the Raiders

On Bodog.com, the Denver Broncos were 16.5 favorites over the Raiders

 

So why not do the following:

Bet $1000 on Pinnacle Sports on the Broncos

Bet $1000 on Bodog.com on the Raiders.

 

Now, in this situation, if the game is decided by 7 points, you break even... if the game is decided by 20 points, you break even...

BUT, if the game is decided by 15 or 16 points, you win $2000 cause both bets pay out!!!!

 

Essentially, you are arbitraging two bets. Sure you don't perfectly break even cause the casino takes a percentage on a win... but you get two bets for the price of one. And, these guys who determine the spreads are really really good. If often happens that they are very close.... So odds seem really good that the eventual outcome lies somewhere between the two lines.

 

This seems all two promising... What's the downside that I'm missing?

[NorthSideSox72]

I don't gamble on professional sports. But I often check the lines for NFL games, just to see which teams are best favored for my survival football league. Why I was browsing the lines, I had an epiphany:

 

The following situation occurred last week:

 

On PinnacleSports.com, the Denver Broncos were 14.5 point favorites over the Raiders

On Bodog.com, the Denver Broncos were 16.5 favorites over the Raiders

 

So why not do the following:

Bet $1000 on Pinnacle Sports on the Broncos

Bet $1000 on Bodog.com on the Raiders.

 

Now, in this situation, if the game is decided by 7 points, you break even... if the game is decided by 20 points, you break even...

BUT, if the game is decided by 15 or 16 points, you win $2000 cause both bets pay out!!!!

 

Essentially, you are arbitraging two bets. Sure you don't perfectly break even cause the casino takes a percentage on a win... but you get two bets for the price of one. And, these guys who determine the spreads are really really good. If often happens that they are very close.... So odds seem really good that the eventual outcome lies somewhere between the two lines.

 

This seems all two promising... What's the downside that I'm missing?

 

That is exactly arbitraging. And it appears to be legal, in this case. But as with any arb activity, you need to take into account some other factors - opportunity cost (not having the capital in hand during the bet period) is one, and another is the fee associated with the bet or transaction (if any). You weigh those costs against the interpolated payout (arb-winning payout amount multiplied by percentage chance getting that win), to see if its worth it. Of course, since you won't know for sure what the chances are, you are taking a bit of a flyer.

 

Those spreads are usually narrow, and only exist for brief periods (for this exact reason). So you would need to be fast and lucky. But if you were really good at getting a lot of data from various markets (casinos or what not) instantaneously, and we able to legally make the multiple bets in those intervals on a large scale... maybe you could make money.

 

Here is the catch - to get the amount of data you'd need, instantly, you need to either hire people at the casinos to be watchers (adding cost and potentially negating your profit), or use the internet - and that will probably make the acticity illegal. So... any income you derive from that illegal gambling becomes problematic. You are not only violating laws on gambling, but you are also shunting the IRS. And don't think for a second those entities would try to protect you from the IRS, since you are essentially stealing from them. You'd have them AND the IRS against you. That, right there, is a pretty big risk to take.

[jasonxctf]

the houses take. you'll see that in a vegas casino, for every $10 you bet on a straight up bet (pts, etc) you will win $9.10 for every $10 bet. So in your example, you'd lose the $1,000 in one situation and win $910 in the other. The only way you make $ is if it falls inbetween. which can certainly happen in close games.

[NorthSideSox72]

the houses take. you'll see that in a vegas casino, for every $10 you bet on a straight up bet (pts, etc) you will win $9.10 for every $10 bet. So in your example, you'd lose the $1,000 in one situation and win $910 in the other. The only way you make $ is if it falls inbetween. which can certainly happen in close games.

That's what I meant by "fees".

[AbeFroman]

the houses take. you'll see that in a vegas casino, for every $10 you bet on a straight up bet (pts, etc) you will win $9.10 for every $10 bet. So in your example, you'd lose the $1,000 in one situation and win $910 in the other. The only way you make $ is if it falls inbetween. which can certainly happen in close games.

 

Ok... so lets say in the 1000 bet scenario, that means you lose $90.

 

Still, thats only a $90 bet with a potential payoff of $2000 if the final score is just a few points away from the line (which it often is). Those seem like better odds than you ought to be able to get in a casino.

 

In all the times I've been to vegas, I can't recall seeing lines that were two points apart at different casinos. But it seems to happen on these internet gaming sites from time to time... Certainly if internet gambling were legal (which it now is not), then you would have a very easy way to find separate point spreads.

[jasonxctf]

my guess is that you'd have a better chance doing this in basketball than football.

[Rex Hudler]

the houses take. you'll see that in a vegas casino, for every $10 you bet on a straight up bet (pts, etc) you will win $9.10 for every $10 bet. So in your example, you'd lose the $1,000 in one situation and win $910 in the other. The only way you make $ is if it falls inbetween. which can certainly happen in close games.

 

Unless betting has changed recently, it works exactly the opposite. If you bet $100 and win, you win $100. If you lose, you pay $110. The vig is paid on a loss.

 

Anyway, Abe you have hit on a gold mine opportunity for bettors. I used to do this all the time, risking $10 to win $200. All it would take is to win once out of 20 times to break even. I did fairly well several years ago doing this when betting with two local bookies.

 

The only problem with this, and the reason you can't make a living doing it, is that the difference in the lines is rarely large enough to get the spread you need. Half points are helpful in that they keep your potential winnings on both ends, assuming the half points are on the right side.

 

Lines are usually close enough, especially when betting thru Vegas, to make these situations rare.

[Texsox]

Not that I've ever been involved in something like this, but if you happen to place a bet early in the week, it's sometimes a good idea to see what the line has moved to. You may find the opportunity to hit a middle with the same book.

[santo=dorf]

QUOTE(NorthSideSox72 @ Oct 16, 2006 -> 04:06 PM) <{POST_SNAPBACK}>

That's what I meant by "fees".

It's called "juice."

 

You'll only get even money if it says "even" next to the point spread. Usually it is between -105 and -120