Arbitrage Alert Flop: NCAA Odds Yield Guaranteed Loss (ROI: 36.0%)

Introduction

We have identified a potential arbitrage opportunity in the upcoming NCAA Football (NCAAF) game between the Colorado State Rams and the Miami (OH) RedHawks scheduled for December 28, 2024, at 4:38 PM. The opportunity arises from differing odds offered by two bookmakers, FanDuel and DraftKings, on the alternate total points market for the game.

Analysis

Event Details:

• Match: Colorado State Rams vs. Miami (OH) RedHawks
• League: NCAA Football (NCAAF)
• Date and Time: December 28, 2024, at 4:38 PM

Bets Placed:

Bet 1:

• Bookmaker: FanDuel
• Market: Alternate Total Points
• Outcome: Over 46.5 Points
• Odds: +174
• Stake: $496.32

Bet 2:

• Bookmaker: DraftKings
• Market: Alternate Total Points
• Outcome: Under 46.5 Points
• Odds: +170
• Stake: $503.68

These two bets cover all possible outcomes regarding the total points scored in the game, with the total stakes amounting to $1,000.

Discussion

Converting Odds to Decimal Format:

To facilitate calculations, we convert the American odds to decimal odds:

• Over 46.5 Points (+174): Decimal Odds = 1 + (174/100) = 2.74
• Under 46.5 Points (+170): Decimal Odds = 1 + (170/100) = 2.70

Calculating Potential Returns:

If the total points are over 46.5:

• Payout from Bet 1: $496.32 x 2.74 = $1,359.92
• Loss from Bet 2: $503.68
• Net Return: $1,359.92 - $503.68 = $856.24
• Net Profit/Loss: $856.24 - $1,000 (total stakes) = -$143.76

If the total points are under 46.5:

• Payout from Bet 2: $503.68 x 2.70 = $1,359.94
• Loss from Bet 1: $496.32
• Net Return: $1,359.94 - $496.32 = $863.62
• Net Profit/Loss: $863.62 - $1,000 (total stakes) = -$136.38

Analysis of Results:

• In both scenarios, there is a net loss.
• The losses are $143.76 if the total is over 46.5 points and $136.38 if under.
• The total amount wagered is $1,000, with maximum potential returns of approximately $863.62.

Implications

The calculations indicate that this is not a profitable arbitrage opportunity. Instead of guaranteeing a risk-free profit, these bets result in a guaranteed loss regardless of the game's outcome. The discrepancy in odds between the two bookmakers is insufficient to create a positive expected value. This scenario underscores the importance of thorough analysis before engaging in arbitrage betting.

Understanding Arbitrage Betting:

An arbitrage bet involves placing bets on all possible outcomes of an event to secure a profit, capitalizing on odds discrepancies between bookmakers. Key conditions for a successful arbitrage include:

• Covering all possible outcomes.
• Ensuring that the sum of the inverses of the decimal odds is less than 1.
• Adjusting stakes proportionally to balance potential payouts.

In this case, although the sum of the inverses is less than 1 (0.734), adjusting the stakes still results in a net loss due to the insufficient odds provided.

Conclusion

Based on the analysis, the proposed bets do not constitute a valid arbitrage opportunity. The guaranteed losses highlight that the odds and stakes do not align favorably. Bettors should exercise caution and perform comprehensive calculations when seeking arbitrage opportunities to ensure profitability.

Recommendations:

• Reassess the bets and avoid placing them as presented.
• Search for better odds or wider discrepancies between bookmakers.
• Utilize arbitrage calculators to verify potential profits before wagering.

Disclaimer

This analysis is for informational and educational purposes only and should not be construed as betting advice or a recommendation to engage in any gambling activity. Betting involves risk, and it is important to gamble responsibly. Always verify calculations and consider the terms and conditions of the bookmakers involved before placing any bets.