Bookie can ever be in loss in sports arbitrage betting???

Question

Friends, ofcource we always win in sports arbitrage betting, but IS THERE ANY LOSS TO THE BOOKIE TO WHICH WE PLACE A BET? i think none of the party commits loss

> If none of the party commits loss, then is the capital going from 1 to another, i mean just one hand to other to other to other ORRRR

> Is the money generating, mean capital is born?

A very experienced bookie/financial investor, analyst can and should only answer this question, he can only understand what i actually mean to say

Answer 1

Arbitrage betting requires making 2 seperate bets at two seperate bookies. If these two people are competent, then they should still both make money in the long run even if every now and then their lines are off enough to facilitate an arbitrage bet.

However, if a bookie consistently posts incorrect lines that allow shrewd bettors to use their service to make arbitrage bets, they will end up with a lot of lopsided betting, and will end up taking quite a large financial hit.

So in the long run, it is very bad for a bookie to have lines that are not consistent with those of other bookies because they will get destroyed by arbitrage betters.

Answer 2

Capital is actually being generated, as every person in the equation has a postive expected value for their investment.  The lines are set according to the betting patterns at the particular book, not sports books as a whole.  Here's an example.  If tons of people are betting heavy on the underdog at book A that will make them nervous, and they'll move the odds to make that bet less favorable.  If it sets up an arbitrage at another book they don't care, as the betting patterns at their book are the only things that truly matter, and they need to minimize potential losses.  They're seeking an equilibrium point with ALL of their bets, and the lines nudge the bettors in the appropriate direction.  Hence placing the arb bet actually helps establish the equilibrium the book is seeking to find.  They may not like arb betting, but every bet at their published lines smooths out their potential loss.  The only negative expected value comes from those making straight bets.  And in financial terms they're just a resource to be exploited that does not factor into our equation.  Every saw mill needs trees.  Placing the arb bet actually helps both books make money.  And it obviously helps you make money.  Since the only loss is on the side of the available resources you can think of it as generating capital.