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It is possible to make a living from gambling. That's not to say that it's easy; bookmakers and casinos build a profit margin into their odds so that they are effectively guaranteed to come out ahead.

Other authors on this site and elsewhere have pointed to the possibility of arbitrage, the practice of placing bets on all possible outcomes in such a way as to guarantee a profit. For instance, if you can put equal amounts of money on both players in a tennis match at better odds than evens (2.00*), you are guaranteed to come out ahead. Opportunities for this type of bet are rare, but potentially profitable all the same. Care must always be taken to make sure you place the bets correctly; profit margins are generally small and one mistake can easily wipe out several months of careful work.

A riskier proposition is to find bets offering 'value'. A value bet is one where the probability of winning is higher than the implied probability given by the odds. For instance, if you judge that Andy Murray's chances of winning Wimbledon are better than 10%, backing him at 9/1 (10.00) constitutes a value bet. This approach has several problems, the most significant of which are trying to evaluate the probability of each outcome, and managing your money in such a way that you're guaranteed to come out ahead - although if you consistently find value bets, over the long term you are 'guaranteed' to make a profit - by which I mean, you can make losing as unlikely as you want by making more value bets. The main difficulty there is that nobody has an infinite bankroll and your finite bank account may be whittled to nothing before the maths has time to put you ahead. And all that depends on being able to evaluate the probabilities accurately.

A final consideration is that different bookmakers will offer different odds on the same outcomes, which is what makes arbitrage possible. This means that 'shopping around' for the best odds available for a bet can often make a great deal of difference to your bottom line. Betting exchanges such as betfair.com and betdaq generally offer excellent odds, but it is wise to take into account the commission they charge on winning bets - up to 5% of your winnings.

Gambling for profit is not an easy task, and if you choose to pursue that road you should only use money you can afford to lose. However, having money riding on the outcome of a sports event can make it a much more entertaining affair. The flip-side of that, of course, is that when your team loses - I'm a Scotland fan, so for me that's most of the time - it simply compounds the misery.

* Traditional odds of the form A/B mean 'if you bet B pounds and win, the bookie will give you your stake back plus A pounds.' I prefer the decimal style which says 'if you bet one pound, this is the total amount you'll receive if you win.' It has the nice mathematical property that one divided by the odds is the implied probability.

Learn more about this author, Colin Beveridge.
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