Arbitrage Misstep: Colorado State vs Miami (OH) (ROI: 34.4%)

Introduction

In the dynamic realm of sports betting, particularly within the context of arbitrage betting, opportunities that appear lucrative can sometimes surface. A recent analysis has highlighted a potential arbitrage situation involving the upcoming NCAA Football (NCAAF) game between the Colorado State Rams and the Miami (OH) RedHawks, scheduled for December 28, 2024. The focus is on two bets placed on alternate team totals for the Colorado State Rams, sourced from different bookmakers with varying odds.

Analysis

Two distinct bets have been identified:

Bet 1:
- Bookmaker: FanDuel
- Market: Alternate Team Total
- Outcome: Colorado State Rams Over 15.5 points
- Odds: +290 (Decimal odds 3.90)
- Stake: $344.54

Bet 2:
- Bookmaker: DraftKings
- Market: Alternate Team Total
- Outcome: Colorado State Rams Under 15.5 points
- Odds: -105 (Decimal odds 1.95238)
- Stake: $655.46

Total Investment: The combined stake for both bets amounts to $1,000 ($344.54 on Bet 1 and $655.46 on Bet 2).

Possible Outcomes:
1. The Colorado State Rams score over 15.5 points.
2. The Colorado State Rams score under 15.5 points.

Scenario 1: Over 15.5 Points
- Bet 1 wins: The payout is calculated as $344.54 * 3.90 = $1,343.71.
- Bet 2 loses: The loss is the stake of $655.46.
- Net Profit/Loss: The total return is $1,343.71, leading to a net gain of $343.71 when considering the total stake of $1,000. However, after accounting for the loss from Bet 2, the net outcome is a loss of $311.75.

Scenario 2: Under 15.5 Points
- Bet 1 loses: The loss is the stake of $344.54.
- Bet 2 wins: The payout is calculated as $655.46 * 1.95238 = $1,278.14.
- Net Profit/Loss: The total return is $1,278.14, resulting in a net gain of $278.14 when considering the total stake of $1,000. After accounting for the loss from Bet 1, the net outcome is a loss of $66.40.

Implied Probabilities:
- Bet 1 Odds (+290): Implied probability = 100 / (290 + 100) = 25.64%.
- Bet 2 Odds (-105): Implied probability = 105 / (105 + 100) = 51.22%.
- Total Implied Probability: The sum is 76.86%, which is less than 100%, suggesting a theoretical arbitrage opportunity.

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Arbitrage Calculation:
- Arbitrage Percentage = (1 / 3.90) + (1 / 1.95238) = 0.2564 + 0.5122 = 0.7686.
- Since 0.7686 is less than 1, this indicates a potential arbitrage scenario. However, practical calculations of returns reveal net losses in both outcomes.

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Discussion

While the initial assessment of the implied probabilities and arbitrage percentages suggests a favorable opportunity within sports betting markets, the practical application tells a different story. The calculations demonstrate that, regardless of the game outcome, the bettor stands to incur a loss. In Scenario 1, the larger payout from Bet 1 is offset by the substantial loss from Bet 2, leading to an overall negative return. Similarly, in Scenario 2, the gains from Bet 2 do not compensate for the total amount invested when both bets are considered.

This situation underscores the importance of thoroughly analyzing all aspects of potential arbitrage bets. Factors such as stake distribution, odds disparities, and potential payouts must be meticulously evaluated to determine the viability of an arbitrage betting strategy.

Conclusion

Despite the appearance of a potential arbitrage betting opportunity in the matchup between the Colorado State Rams and the Miami (OH) RedHawks, detailed analysis reveals that the bets in question do not present a risk-free profit scenario. Both possible outcomes result in a net financial loss when considering the total stakes and payouts. This example highlights the necessity for bettors to conduct comprehensive assessments of arbitrage opportunities within sports betting to ensure that they are genuinely profitable after accounting for all variables.

Disclaimer

This analysis is intended for informational and educational purposes only, focusing on the examination of the provided betting scenario. It does not constitute financial advice or a recommendation to participate in any betting activities. Betting involves risk, and individuals should carefully consider their decisions and, if necessary, seek professional advice before engaging in sports betting.