This article covers three ways of making money from sports betting that work in both theory and practice.

They are all based on sound statistical principles and if you do some research around the web you'll find that they have been around for almost a decade.

Bookmakers profile and limit winning players, however, this does not mean that you cannot extract some good profits before that happens.

Some of them are also more difficult for the bookmakers to spot than others. This article explains the difference between them and argues some of the pros and cons of the different methods.

1) MATCHED BETTING

The idea behind it is to make arbitrage bets using bonuses and promotions from the bookmakers on one side, and creating an arbitrage bet on a sharp bookie or exchange on the other side.

There are many website and bloggers offering matched betting strategies.

Matched betting is the least risky, but at the same time, it offers the lowest potential reward.

Matched Betting Pros

1. Risk-free in theory, just like arbitrage betting.
2. Does not require a large bankroll to get started.
3. A great way to get started with sports betting and build your bankroll.
4. After building your bankroll, you can then use that bigger bankroll with value betting with Trademate, which allows you to extract even more value.

Matched Betting Cons

1. The number of these promotions decrease with time, effectively putting a cap on how much one can make from it.
2. Just as with regular arbitrage, it is easier for bookmakers to spot than value betting, so you will get limited faster.
3. Because your turnover will be dependent on the size of the promotions, they will be quite small.

Overall, it can be a good way to win money on sports betting if you are starting out with a very small bankroll. We have actually created another software for Matched Betting, which helps you find and place matched bets. It’s called Oddshero, check it out here!

2) ARBITRAGE BETTING

Arbing is bascially the exact same thing is Matched Betting, except in Arbitrage Betting, one is using their money only, rather than promotions to bet on all outcomes of a game.

An arbitrage bet occurs when the overall odds on a game is high enough to guarantee a profit independent of the outcome.

Typically an arb is placed on the soft bookmakers on one side, and the sharps or exchanges on the other to complete the arbitrage.

The potential ROI one can make per arbitrage bet is typically around 1%.

Arbitrage Betting Pros

1. The major pro of arbitrage betting is that it in theory is risk-free. Although arbitrage bets seem risk-free, in practice it is not that simple, which will be covered in the cons.

Arbitrage Betting Cons

1. The potential risk of arbitrage betting is that the odds can change after you have placed one side of the bet.
2. The bookmakers voiding the bets due to palpable errors (they mis-priced their odds terribly, but their terms enable them to void it).
3. The bet is voided because of unforeseen events (e.g. bad weather). These elements would all leave you exposed on one side of the arbitrage. Now, if one can expect to get a 1% ROI per bet, one would need to bet for $100 to make $1. If one of the mentioned problems occur and the $100 stake is lost, one will need to make 100 x $100 bets to make up for it!
4. The other potential downside is that it is easier for the bookies to spot arbitrage bettors, because it requires the market to be too high on all sides of the game. So one gets limited faster, putting a cap on the potential lifetime earnings.
5. Also, you will need to distribute your capital and thus tie up your capital across a very wide range of bookmakers to take advantage of the sure-bet opportunities.
6. Finally because a sport arbitrage bet requires all outcomes of the game to be too high, arbitrage bets do not occur as frequently as value bets, reducing the potential turnover. Remember, with an avg. ROI per bet of 1%, one needs a high turnover to make good money.

3) VALUE BETTING

To explain it simply, a value bet takes only one side of an arbitrage bet.

Instead of betting on all outcomes, one only places a bet on e.g. the home team to win.

More generally speaking a value bet can be described as placing a bet at higher odds than its underlying probability.

So one can use the soft side of an arbitrage bet to place a value bet, but that is not the only way of identifying them.

1. This article shows an example of a value bet with a coin toss.
2. This article explains how we can leverage the fact that different bookmakers offer different odds to find value bets.
3. This article shows you a practical example of a value bet that occurred on a European Bookmaker in an EPL between Chelsea - Manchester City.

Pros of Value Betting:

1. They occur more frequently than arbitrage bets, thus one can get in a much larger sample size of bets and turnover.
2. The avg. ROI% per bet is higher for value bets than arbitrage bets.
3. They are more difficult for the bookmakers to spot than arbitrage.

Cons of Value Betting:

They are higher risk than arbitrage bets, which in theory are risk-free.

This is because you only bet on one side of the game, which means the variance hence is higher (This article and this video explain the concept of variance and how it relates to value betting).

Let’s use an example: If one takes a bet with 2.0 in odds, you can only expect to win 50% of the time. In the short run, anything can happen, e.g. losing 10 coin tosses in a row.

But over a large sample size, let’s say 10,000 tosses, the distribution of the number of heads and tails will be pretty much spot on 50/50.

So in the short run, variance and swings will have a large impact on your results.

MANAGING THE RISKS OF VALUE BETTING

The good thing is that this risk can be managed by:

1. Spreading your risk over a large sample size of bets.
2. Proper stake sizing as covered in this article and this video.
3. Taking steps to reduce your variance (the most important being taking lower odds, which equals a higher probability of the team winning).

ARBITRAGE BETTING VS VALUE BETTING

This article by our guest contributor Vida covers his views on the pros and cons of arbitrage vs value betting.

TOO GOOD TO BE TRUE? NO, BOOKMAKERS LIMIT WINNING PLAYERS

Does all of this sound too good to be true?

Well, a con of all three approaches is that just like any other winning strategy, the soft bookmakers will limit you if you win over time putting a cap on how much money a person can make.

However, we would like to remind you that this does not mean that you can't extract solid profits from the bookmakers before this happens.

Also, when you reach this stage, if you have a large enough bankroll to do so, you can continue with value betting on the Asian bookmakers.

These bookies take higher stake sizes and don't limit winning players.

WHICH STRATEGY SHOULD I CHOOSE?

It all depends on your risk-reward profile.

But at Trademate, we are all about value betting as this gives the highest potential for reward of the 3 ways to find value while still controlling for risk.

This is what we do ourselves and why we made the ultimate tool to help you identify value bets.