One of the most underrated factors in successful sports betting over the long run is the ability to manage risk and build your bankroll. It is important to incorporate a strong money management plan in to your sports betting approach in order to maintain a sound foundation while trying to build up your profits. There are many misconceptions when it comes to money management principals. That is particularly true when it comes to the differences between arbitrage betting and value betting. Here is a closer look at the misconceptions between arbitrage betting versus value betting in sports.
Arbitrage betting is the search for a risk-free profit via price differential. This can occur more often than people think because the odds that sportsbooks use don’t truly accurately reflect the win probability of the teams involved. Arbitrage betting is backing all selections within a market, across several bookmakers, in order to exploit the price discrepancies and guarantee a positive return. The truth is that arbitrage betting is a sound strategy that has a steady growth pattern as all positions are fully hedged. There is no variance as there is no risk, which means you have all of your bases covered.
Value betting uses arbitrage to indicate incorrect odds but stakes only on that option. Therefore, this approach actually does incur real risk. It’s important to test a significant sample size in order to test the potential of value betting and the risk that comes with it. While some people will focus on specific events the reality is that the larger the scale the more accurately you can break down the risks associated with value betting.
Arbitrage Betting vs. Value Betting
There is obvious logic that says that Arbitrage simply exposed a Value betting opportunity. It’s important to understand the inherent risk is significantly greater when it comes to Value betting in comparison with Arbitrage. If you assume a starting bankroll of 1,000 units and apply the Kelly Criterion based betting strategy with a 2.66% edge over 1,000 separate Monte Carlo Simulations you will see the difference in expected profit. The Kelly Criterion can be found online. It is a sensible strategy for bankroll growth, and for those in between a mixed trading strategy is recommended to ensure a proper bankroll growth. Bankroll management must be proportionate to the underlying risk. This is why you should take advantage of Arbitrage betting. With an unlimited bankroll and no betting limits the Value betting makes a lot of sense. However, with the actual bankrolls the casual bettor has and the limitations on the bets they can make the Arbitrage becomes the superior choice.
There are a lot of misconceptions about the two different types of approaches to betting on sports. The reality is that Arbitrage betting is the smarter strategy for sports bettors and the best option for those that want to ensure a steady growth pattern with no variance. While it might seem confusing at first, you can really establish a sound foundation for building up your bankroll by buying in to the Arbitrage betting approach.