Sports Arbitrage World Outlook: May 2009
April 2009 provided some surprise bonuses for traders concentrating on Formula 1. These opportunities are likely to continue so look out for sports arbitrage trades in all types of match-bet (Qualifying and Race bets) as well as within the Finish/Not Finish markets.
All in all, the month produced a pleasing number of arbs. Over 13,000 surebets were available across a range of 1412 unique matches and games. Average profit yields edged up slightly to 3.7%.
Soccer & tennis continue to be the most yielding sports with a total of 6264 arbs. However, golf is catching up and is likely to remain one of the principal trading sports throughout the summer.
The summer is traditionally the most busy time of the year for many sports arbitrage traders. Multiple Grand Slam events in tennis and golf will provide you with extraordinary opportunities to profit. This all starts in May on the clay courts of the French Open
There are two main types of tennis-match arb to be aware of: match-betting and set-betting
MATCH BETTING
It’s important to begin your analysis of prices from the first round. This is where the most matches are played and also where the most unknowns exist for the bookmakers. Prices are issued by most bookmakers two to four days before the start of the event. Although in the minor weekly tournaments, the bookmakers can be very sensitive to activity and are quick to move prices when bets come in, the Grand Slam events generally allow for larger stakes and more durable prices. They also tend to produce the most arbs - both because there are more matches in a Grand Slam and also because many bookmakers who do not usually price up weekly tennis matches offer markets in these higher profile events.
Tennis provides a unique variable from one tournament to the next - the surface upon which it is played. The ability of players can vary quite dramatically on different surfaces and while this is realised by most bookmakers, it is still very difficult to quantify and express accurately in a price. The sub-varieties of hard surface that exist ALSO add to the confusion.
SET BETTING
These bets specify which player will win, and by what set-score. For example, in a 3-set match, the winner’s score will be either 2-0 or 2-1. These bets provide an alternative way to hedge against a match bet on one of the players. Here is an example.
| PLAYER | HEWITT | GONZALES | |
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| BEST MATCH ODDS | 1.30 | 4.00 | |
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| BEST SET ODDS | |||
| 2-0 | 2.30 | 8.00 | |
| 2-1 | 2.40 | 12.00 | |
Although the best prices available on simple match-betting do not produce an arb, placing a bet on Hewitt to win the match (1.30) and combining that with bets on Gonzales to win 2-0 (8.00) and 2-1 (12.00) produces an arb of just over 2%
| HEWITT | GONZALES | |||
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| 1.30 | 76.92% | 8.00 | 12.50% | |
| 12.00 | 8.33% | |||
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| TOTAL PERCENTAGE = 97.76% | ||||
You will find that bookmakers tend to offer set-betting only in the later stages of the weekly satellite tournaments. However, look out for these bets being offered by a large number of bookmakers during the Grand Slams.
Of course, the rules that bookmakers apply to tennis matches sometimes differ and this issue will introduce risks to your trading if it is ignored. These risks cut both ways - windfall profits occur just as stake losses do - which means that your attitude will depend on your risk-profile.
Traders tend to fall into 1 of 3 camps:
a) Those who mix all rules and trade indiscriminately
b) Those who never mix rules
c) Those who only mix rules under certain conditions
The first style is the most risky, the second is the safest. The third might be described as the most sophisticated. Follow this link for a fuller discussion of the merits of each tennis sports arbitrage trading technique…
I wish you a very profitable month ahead!
Tags: Sports Arbitrage Outlook, tennis