This as-told-to essay is based on a conversation with James Crosby, a 26-year-old Deloitte consultant from Arlington, Virginia. It’s been edited for length and clarity.
Online sports betting is legal in some states. Before participating, verify the legality in your specific state.
My first month doing arbitrage betting, I made a little over $2,000. The second month, I made about $2,500. This month, I’m on track to bring in more than $4,000 in pure profit.
The process is pretty straightforward: I’ve opened accounts on about 12 different sportsbook platforms, like FanDuel and DraftKings, and I pay to subscribe to a service call OddsJam, which helps me find the best bets. Once I’ve found them, I strategically bet against myself so I always turn a profit. I only use US sites.
Last week, I bet on Alex Ovechkin for the Capitals versus the Hurricanes playoff game in hockey. On one sports betting platform, I bet $100 to win $150 that Alex Ovechkin would get over three and a half shots on goal. That meant my total payout would be $250 because I would get my $100 back plus the $150 in profit.
During the same game, on another betting site, I had the exact opposite bet, where I bet Alex would get under three and a half shots on goal. The chances were betting $130 to win $119, so my total payout would be $249.
So, for both bets, I had a total wager of $230. But because one of the bets had to win and the other bet had to lose, my payout would either be $249 or $250, and I was guaranteed either $19 or $20 in profit, depending on the outcome.
Most of the time, I’m betting between $50 and $100 to win $3 to $4, but it all adds up.
For the returns I’m getting, I needed initial capital of about $20,000 and maybe one to two hours per day. But anyone can really be profitable with this.
The name of the game is maximizing your return on investment, so the more that you put in, the more profitable you will be. Each one of the bets you’re making is going to have a profit margin between 3% and 4% — so if you have $1,000, you’re going to make $30 or $40 bucks. If you only have $100, you’re going to make $3 or $4. Even paying for the subscription to OddsJam, it really does pay for itself very quickly.
There’s a bit of a catch
Online arbitrage betting is legal, depending on the state you’re in, but of course, the sportsbook sites don’t really like it because they’re losing money. Each platform has different terms of service, but when they catch you — and they will because they have algorithms dedicated to detecting these kinds of bets — your account will probably get restricted so you can’t bet as much money. That means you’ll have to play more often or bet on more games to see the same returns.
If you’re betting on very obscure sports that aren’t usually bet on — like you’re betting $2,000 that some cricket game in India is going to go a certain way — they’re going to be able to figure out that you’re probably arbitraging. So you can kind of mitigate the risk by not taking bets that are super obscure and just doing more main lines that are very, very common, which will help you remain undetected for a while.
I would say you could probably last a week or two on average before the casinos catch on. I lasted around two weeks on most of my sports books, but there were a couple that got me within three or four days, so I wasn’t able to be super profitable on them, but it was still fun in the first couple of days to take advantage of the bigger bets.
You’d think it would probably be in the site’s best interest to disband your account if you were just exploiting them and taking money from them. But, as arbitrage betters, we actually do provide a little bit of value to the sportsbook sites, because they can study an arbitrage player’s activity for signals on where they can tighten up their odds.
It’s actually kind of like a value feedback loop where we provide a service — almost like consulting — and help them make sure that other players aren’t taking advantage of them and getting bets at a better value than they should be, which allows them to stay more profitable over time, and in return, they allow us to use their platform to place these bets, knowing that we’ll probably squeeze out a little bit of profit.
I learned about arbitrage betting from my roommate, who has been doing it for years. He’s been averaging between $30,000 and $40,000 a year with this side hustle and bought himself a Tesla with his winnings. I knew he was doing it, but I was always kind of skeptical of the time commitment that it would take, the amount of starting capital I would need, and the learning curve behind it, because it seemed kind of complex.
I finally started in March because I figured I would just give it a shot. I wanted an easy way to earn extra money because I’ve been worried about the job market. It ended up being really, really easy once I put a little bit of time into it, and it wasn’t overly complicated, so my roommate and I started a blog and social media channels to teach other people our strategy.
One thing you have to keep in mind is taxes. Every state and player is different, but I know that I’ll have to pay taxes of around 20% of my earnings. So I’ve accounted for that, and I put that portion in a fund that’s allocated to low-risk stocks, so hopefully I don’t lose any of that money. But even taking that money into account, it feels worthwhile.
I’m assuming I’ll be able to keep this going because my roommate’s been doing it for years, and he’s been able to remain profitable. So there’s no end in sight, hopefully. I’m hoping that in the future, my winnings could serve as a down payment on a house, a wedding ring for my girlfriend, a new car, or just, you know, a fallback fund if things go really south and I lose my job or something like that especially with the economy the way it is.
I have no idea exactly where I’ll spend the money, but my plan is to save it and invest it wisely.
Do you have a unique side hustle, or has your side hustle replaced your full-time job? Email Katherine Tangalakis-Lippert at ktangalakislippert@businessinsider.com.
