plonkee money an english-er's thoughts on personal finance

August 7, 2007

additional income: gambling

Filed under: Uncategorized — plonkee @ 12:00 pm

Note that if gambling is not legal where you live then you shouldn’t do it. If you want to gamble anyway, consider moving or getting the law changed.

There is a way of making money by gambling. It takes advantage of different odds offered by different bookies. As an example let us consider a football match – Arsenal are playing Tottenham Hotspurs. There are 3 bookies in town A, B and C.

Bookie A is offering Arsenal to win at 4 to 1

Bookie B is offering Arsenal and Tottenham to draw at 5 to 1

Bookie C is offering Tottenham to win at 6 to 1

If you bet �1, on each offer you will win either �4, �5, or �6 (plus the return of your �1 stake) depending on the outcome of the game and you will definitely lose �2, leaving you with a net profit of at least �2.

The key here is that if you add up all the odds as if they were probabilities and the odds cover all possible outcomes, they add up to less than 1. If a single bookmaker offered odds like these on a regular basis, they would very quickly go broke. However, with the advent of online gambling and betting exchanges it is possible (although unusual) to find in effect competing bookmakers whose odds add up to less than one.

In practice, you are more likely to get a combination of odds that add up to just less than 1 or break even but if you combine this with a special offer from a betting exchange (like a buy one get one free offer or an introductory bonus) you can still make money.

If you are interested in having a go at this, I suggest you read the matched betting loopholes thread on the money saving expert forums, make sure you understand thoroughly how to go about it, and never bet more money than you can afford to lose. Even if its a certainty, there’s always the possibility that you will manage to mess it up somehow.

Strong caveat: If you have a gambling problem, do not do this. If online gambling is illegal where you live, do not do this. If you struggle with maths and spreadsheets, do not do this.

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