How the internet turned the tables on the high street bookmaker

In a city centre bookmaker on a Friday afternoon, old men huddle around a table studying battered form cards while a couple of students frantically tick various boxes of a football coupon for some obscure league. The rest cluster around high stakes roulette machines as £10 notes are stuffed into them as if they were toilet paper. Somewhere amongst this crowd is an altogether different type of punter. A punter who does not see gambling as risk versus reward but rather as strictly business and has no intention of losing.

The advent of online betting exchanges, such as Betfair and Betdaq, has made this achievable. It is now possible to not only back an outcome to win, but also back the same outcome to lose (or "laying”) on the exchanges. For the shop punter it means that betting is no longer just about backing something in the hope it might win, but finding selections that he can back and lay simultaneously to guarantee a profit whatever the outcome. This is known as arbitrage betting.

An arbitrage bet, also known as an arb, is relatively easy to spot in theory. If the odds for the back bet are higher than those of the lay bet then there is money to be made. Whatever the outcome, the profit will always be greater than the amount staked on both bets.

Bookmakers, such as William Hill, move quickly to close the accounts of anyone they suspect of arbitrage as it is against their terms of use, unfair and unprofitable. A spokesman for William Hill says that typically those involved in arbitrage, and who are known simply as "arbers”, only operate online. They use state of the art software to spot potential profitable price differences between a bookmaker's online market and an exchange. Stakes are in the thousands of pounds for each bet yet only a small percentage profit is made each time as the smallest price differences are exploited.

According to the William Hill spokesman, shop arbers, or sharbers, are seen as less of a concern in comparison. They are difficult to spot and bets placed in shops are typically in far smaller amounts meaning that profits are not as great.

However, bookmakers are now more prominent than ever on British high streets. Ladbrokes announced in August that they would add 60 more shops to their current total of 2150 by the end of 2012. Whilst William Hill leads the way with nearly 2400 retail outlets across the UK. This means that although individual bet stakes are smaller, the total staked by a shop arber can still be sizable.

Profits made from sharbing depend on a number of variables such as time and how much is staked on each bet. However, those involved in shop arbitrage claim they can typically make between £40 to £200 each week.

Low tech affair

Shop arbitrage is also a far less high tech affair. The comfort of an office with multiple screens highlighting price differences is swapped for walking or cycling in all elements to various chains of betting shops. Spotting price differences is not an automatic affair either. It involves picking up various coupons and manually comparing each price with the price available at the exchange via a smartphone or laptop with wireless connection.

The task is a time consuming one as individuals travel between various bookmakers. A midweek fixture list regularly contains over 60 matches from leagues across Europe. Each firm will have their own coupon and their own odds meaning that this task is multiplied for each new set of matches. Even when a suitable selection has been found the odds at the exchange or the bookmaker can disappear in an instant and render the selection useless. Sharbing therefore can often be a frustrating and anti-social pursuit as hours can be wasted on fruitless trips.

Mobile evolution

However, the evolution of mobile technology means that sharbing is now more accessible than ever. Anyone can pick up their smartphone and learn how to place arbitrage bets. Websites such as Bet72.com walk through the maths and principles behind "risk free betting". While calculators, such as Betvault, produce figures for bets in order to guarantee a profit and can be downloaded free as apps meaning that little understanding of the maths behind betting is needed. Sharbers can also access mobile platforms of online betting exchanges in shops. Any risk of an unfavourable swing in the odds between placing the bet in shop and the one at the exchanges is therefore negated.

Sharbing is an individual pursuit and interaction between sharbers takes place almost exclusively on internet forums. They will swap tales and occasionally tips with one another behind the anonymous veil of a username. Intermittently a few reveal details of their occupations. Their backgrounds are varied with housewives, students, call centre workers and executives all claiming to dabble in shop arbitrage. However, many appear paranoid that bookmakers are actively searching forums for information to identify them. They rarely disclose their location, names or shops that they frequent.

Refuse bets

Anonymity is vital, as being recognised by shop staff would almost certainly mean an end to the profitable pastime. Cash is used in order to make transactions untraceable between shops. Profiles are kept low as they study pages of the Racing Post pinned to the walls, watch greyhound racing on a wall of screens and look over various coupons in attempt to blend in with ‘mug punters'. If a sharber is identified then staff can limit stakes, offer a lower price or refuse the bet outright.

In Sheffield city centre opportunities for sharbing are never more than a few streets away. From Castle Market to the Moor there are 10 betting shops whilst there are five within 100 yards of Castle Market itself.

'Tony S' is in his late 30s and a senior manager in the education sector. He has been sharbing around South Yorkshire for the past 12 months to provide a supplementary income and devotes around two to three hours a week to travelling between betting shops. He began sharbing after having a number of his online betting accounts closed.

He has encountered his own problems when placing arbitrage bets but believes arbing in shop rather than online has advantages: "I don't actively disguise my appearance, although I have made the odd effort with my jacket or glasses on or off. If they try hard they will use CCTV and there's not much you can do about that unless you put a hat or hood on which will only attract attention anyway.

"I'm not sure I was specifically recognised as a sharber – but once I placed an unusually (for that shop location presumably) high bet on a price boost, and the cashier phoned through to a nearby shop which I then strolled in to only to be recognised and offered at a lower price. I've had limits on arbs also, but I think these were general rather than personal.”

"There is potential to get more money on specific arbs and offers than with a single online account. When accounts are closed online, shops may be the only way to get money on.”

Not risk free

While arbitrage betting is often hailed as a risk free way of producing a supplementary or even secondary income, there are potential pitfalls as one Yorkshire sharber, known as 'The Phantom Wheeler', highlights: "The downsides are carrying large wads of cash and misplacing betting slips. I once lost my wallet containing around £300 in cash and betting slips.”

'The Phantom Wheeler', a call centre worker in his late 40s, cycles up to 35 miles between shops, and has been sharbing for the past four years. He says that he spends around two hours a week sharbing and expects to make around £40.

Despite his mishap he still recommends it as a way of providing a secondary income: "I sharb in order to enjoy luxuries that I could otherwise not afford.

"It gets me out of the house, gives me an adrenalin rush, keeps me fit and I like to get one over on the bookies.

"It's good fun, although not as lucrative as it once was, but it's still worthwhile in my honest opinion.”

'Tony S' does not share the same view. "It's difficult to say if I'd recommend it. I probably wouldn't to be honest.”

"The downsides are time and, although I've never had any problems myself, I'm not sure a lot of cash in my pocket and some bookie clients is always a good mix if you see what I mean!”

Shop arbitrage will continue for as long as the punter can stay ahead of the bookmaker.

The evolution of technology and the anonymity of the bookmaker shop means that currently the advantage is with punter. Betting firms are aware that information on how to take advantage of them is freely available on the internet and that identifying sharbers is still an incredibly difficult task. Bookmakers make their money from beating the punter and they will hope to find a way to turn the tables back soon.

by Alistair McCloskey