Page "Arbitrage" Paragraph 19

* Sports arbitrage – numerous internet bookmakers offer odds on the outcome of the same event.

Any given bookmaker will weight their odds so that no one customer can cover all outcomes at a profit against their books.

However, in order to remain competitive they must keep margins usually quite low.

Different bookmakers may offer different odds on the same outcome of a given event ; by taking the best odds offered by each bookmaker, a customer can under some circumstances cover all possible outcomes of the event and lock a small risk-free profit, known as a Dutch book.

This profit will typically be between 1 % and 5 % but can be much higher.

One problem with sports arbitrage is that bookmakers sometimes make mistakes and this can lead to an invocation of the ' palpable error ' rule, which most bookmakers invoke when they have made a mistake by offering or posting incorrect odds.

As bookmakers become more proficient, the odds of making an ' arb ' usually last for less than an hour and typically only a few minutes.

Furthermore, huge bets on one side of the market also alert the bookies to correct the market.