Arb-A-Trader by AusSoft/GlobalSoft – Overpromised, Under-Delivered and Expensive

Many people have been posting in the forums lately asking about AusSoft (aka GlobalSoft), a new sports arbitrage alert program designed by Colin Boyan, some programming prodigy, and supported by a short list of psuedo-famous celebrity testimonials. Unfortunately AusSoft don’t offer a trial of Arb-A-Trader and the cost is $7,800 AUD upfront, with a rumour of it possibly going up to $16,500 in the near future! Other reports indicate that Arb-A-Trader is being sold by GlobalSoft in the UK for as much as £5,500. That’s around $13,500 AUD!

Wow. £5,500 for arbitrage alert software? When all of the competition is either free, or between $50 – £149 a month. It better be pretty damn good! And if you read through the websites, it sure does sound it! They aren’t the first alert service provider to over-promise arbitrage to people, but they do manage to do it with a new level of exaggeration!

From the FAQ, when asked if there is a limit to how much can be traded, their answer consists of “normally in the tens of thousand, but realistically there are no restrictions to prevent you from trading aggressively!” Arbs in the order of ‘tens of thousands’ is not the ‘normal’ for the average arber. At one point the website also claimed to “Lock in the odds” when it found an arb, but as I can’t find that claim on the website anymore, it seems that the negative press it got caused them to remove it. (good move!) Plus all of the usual “Guaranteed profit”, “Don’t need to know anything”, “Anyone can do it” stuff.

For more points of view on this matter, read this thread at arbforum, and then there is also these two threads in our DTM forums.

Since the initial questions about AusSoft, most of the feedback I have heard about AusSoft’s Arb-a-trader has been overly negative. Particularly informative was a post made in the ArbForum thread by a poster identified as TFO, who has granted me permission to post this analysis he wrote of their service:

Introduction

The following is a list of Frequently Asked Questions about Arb-A-Trader listed under the title “An Amazing Opportunity� on the Aussoft Technologies Web site. The original text from the website is in blue. The real answers, based upon my personal experiences are written in black.

What they say:

How can I be sure that the arbitrage opportunity shown to me by Arb-A-Trader will have a positive outcome?

Once the arbitrage has been selected by Arb-a-trader, it will provide a direct link to both the bookmaking facilities, which will clearly show that when a certain division of our nominated investment is placed on each team between the two facilities, it is mathematically certain to produce a positive result. In fact it will show you exactly how much your return would be in both dollars and percentages.

What really happens:

The “direct link� that is referred to here is no more than a function that opens up a Web Browser and uses hyperlinks to each of the bookmaker sites to bring up each of the bookmakers’ home pages in separate windows. From this point the user still has to:

Sign in to both bookmakers’ web sites (assuming that the user has an account with the bookmaker).

Locate the particular sporting event that Arb-A-Trader is reporting on. Owing to the vast difference between bookmaker web site layouts and terminologies, this can be a time-consuming and error-prone task.

Once the event has been located on each site, the odds need to be confirmed against what Arb-A-Trader is reporting. This can be done by entering the odds from each bookmaker into the Arb-A-Trader Arbitrage calculator facitiy. I found that the vast majority (80%) of reported profitable trades were either non-existent, the odds were different from what Arb-A-Trader reported. Bear in mind here that I generally looked at trades with between 1.5% and 5% return as although Arb-A-Trader reported trades with much larger percentage returns, it was usually due to an error within the bookmaker’s site.

If the profitable trade is confirmed, the user must then place the bets on each bookmaker’s site. This is a critical point of the transaction because if either of the bets can not be placed for any reason (communication problem, sudden shutting down of the web-site, arbitrary limitations imposed by the operators at the bookmaker website, etc), the “guaranteed return� suddenly becomes a gamble and leaves the user in a financially exposed situation.

The implication here is that at the “click� of one button you will be able to make a guaranteed, successful trade. This is most definitely NOT the case. In fact out of 22 attempted trades that I made while I used Arb-A-Trader, 6 of them failed, 4 of the most successful trades I actually found without the use of Arb-A-Trader while I was trying to recoup the losses from failed trades (these were not even reported on by Arb-A-Trader). The failed transactions happened because of one or more of the following:

Incorrect information regarding events on the bookmakers’ web sites.

Sudden shut-down of bookmaker web sites as the bet was being placed. I have since found that this is a common practice when a bookmaker discovers that they have made an error in their odds calculations. The site is brought down on purpose at their end.

Wager amount limitations differing between bookmakers (see the following FAQ responses for details)

This THE most pertinent failure. Arb-A-Trader reported a “Guaranteed two-way Trade� (two-way means that either one team or the other can win, there is no draw). The trade was based upon a basketball game in Greece. The game ultimately did end up being won by one of the teams, however it was done in extra time. A lot of bookmakers will only pay for results of a game up to the end of match time and do not take into consideration extra time.

What they say:

OK, I have an arbitrage opportunity, now how easy is it to set up accounts with the selected bookmaking facilities?

Very simple! All you do is click on the link(s) provided to you by Arb-a-trader. On the facilities home page of their website there will usually be another link, normally titled “registerâ€? or “new accountâ€? depending on the individual bookmaking facilities. Once you have done this, you need only fill in some details and the rest is child’s play.

What really happens:

This particular information is essentially correct, however, it’s not as simple as it is made out to be. I found that while some bookmakers make it very easy to open accounts, others require much more identity verification in the nature of driver’s license, passport , credit card and sometimes utility bill images to be scanned and sent to them. Certainly, if you wish to retrieve money from your account with most bookmakers, they will require all of the listed identity checks. This is a reasonable practice.

What they don’t mention here is that the arbitrage opportunities don’t seem to remain valid for very long. One needs to act on the reported trades almost immediately before they disappear. They usually disappear because the odds tend to be changed as people place bets on the events. They also disappear because a bookmaker may become aware of an error in their odds and remove it from the web site. So, in order to make the trade as quickly as possible, you really need to have an existing account with the bookmakers involved in the trade. I was informed by the help desk at Aussoft that I would generally need to make the trade within 90 seconds if I was to take advantage of the reported opportunity (not much time for verification etc.)

What they say:

Can I trade as much as I want on each event?

Depending on the bookmaking facility, there may be some limitations, normally in the tens of thousand, but realistically there are no restrictions to prevent you from trading aggressively!

What really happens:

According to the example provided within the glossy promotional brochure, if you place an original trade of $1000 on your first event and continue to place the entire return from each trade on the next trade (ie compound your returns), AND do an average of 2 to 4 trades per day at between 1.5% and 5% return for a period of 4 months, you will have made quite a large sum of money. While the compounding calculations are quite valid, the realities of the situation are far different.

Some bookmakers will allow almost no limit on the amount that you wish to bet but the majority will impose strict upper limits on new account holders. My first attempted trade went wrong because I attempted a $1000 trade as outlined in the brochure. One of the bookmakers allowed me to place a bet with the amount stipulated by Arb-A-Trader while the other bet was intercepted by an operator at the bookmaker’s web site and changed from approx $400 to $16 (being the equivalent of 10 euro). The user is supposed to only press the “bet placement confirmation� on each site as the very last part of the process. The second site did not warn me about the changed betting amount and so I was left exposed. This trade failed and I was suddenly out of pocket by around $600. I was informed by the bookmaker that imposed the 10euro limit that it may be increased to 100 euro if I bet consistently for a period of 3 months. As you can see, this is a far cry from the claim of “tens of thousand�.

What they say:

Do I receive any ongoing support?

Of course, however Arb-a-trader is extremely easy to use and traders find that they need very little support. It’s just that simple. Nevertheless, there is a designated customer support hotline where our highly trained staff are ready to assist you in any way.

What really happens:

Each new customer is supposed to have 3 support appointments prior to commencement of trade using Arb-A-Trader. The first contact helps the user to install the software and is supposed to provide the user with their user-id and password for accessing the Arb-A-Trader data stream. I had no problems here.

The second contact is when a representative from Aussoft is supposed to supply the user with a reduced list of “preferred� bookmakers (around 40 or so). This is where the user finds out that signing on with 40+ bookmakers is quite a task. It’s also where I started to realise that rather than needing only $1000 to start with, one would probably need somewhere in the area of $40,000 in order to get anywhere near the returns shown in Aussoft’s example trades.

The third contact is supposed to be a tutorial where the whole process is explained in detail, the bookmakers list is cut down further and “tricks and traps for young players� are explained. Despite making two bookings for this to occur, it didn’t eventuate. When I mentioned this situation, I was told that I didn’t really need it and that I should already have enough to get started with. At this point I might add that until that moment, I had never placed an online bet in my life, nor was I particularly interested in the sports being traded upon. In fact my entire gambling history prior to this would be to place a bet on the Melbourne Cup on occasion.

What they say:

Do I need a good understanding of sports?

No! Not at all. Although the program is based entirely on sports arbitrage trades, you need absolutely no knowledge of any of the sports. Arb-a-trader does all the work for you so it just a simple matter of a few mouse clicks to make a guaranteed profit.

What really happens:

As stated previously, Arb-A-Trader emphatically DOES NOT do “all the work for you� and it is NOT “just a simple matter of a few mouse-clicks� to make a guaranteed profit. Even the “Arb-A-Trader Terms and conditions� that come bundles with the software and is only readable once the software is installed refutes this:

6. Risk Warning

(a) The profit generated is reliant upon your own decision on choosing betting trades. The Software is meant only for the purpose of highlighting opportunities for you to then consider placing a bet after you have assessed the pricing and the nature of the bet.

(b) You should not engage in sports arbitrage trading unless you understand the nature of the transaction being entered into and verify the actual odds offered by your betting agency correspond to those shown by the software.

(c) You must be familiar with and understand the nature of sport arbitrage trading – how to calculate trade size, jargon used, market/exchange/time zones, the nature of the trade and any trading rules – before you enter into any trading.

How soon can I commence trading once I have purchased Arb-A-Trader?

Just click here and fill out the customer enquiries form and you will be contacted by one of our Customer Service Personnel who will answer any further questions and guide you though the initial steps to becoming a professional sports arbitrageur. Take this step and you could be up and running within the hour and remember there’s no commitment required from you when you fill in the form.

What really happens:

In reality, you need to purchase the software ($7,800) first, they need to deliver it along with the secure USB key, you need to open all your bookmaker accounts (this took two days for 40+ bookmakers) and you need to fund those accounts. Be aware at this point that the majority of that major Australian banks will put an automatic suspension on your credit card if they monitor any funds going to online betting sites. You need to notify them of your intention. Another problem is that Credit card transactions with bookmakers generally incur quite large fees and the bookmakers are unable to credit Australian Credit cards with any winnings owing to Australian Money Laundering regulations.

What they say:

Do we only look at two way opportunities?

Most of the time this is the case however, in some situations a three way arbitrage may become available. This generally will occur in games such as some soccer leagues where a draw is a possible outcome. In some cases when this opportunity arises, the draw may offer an even greater return than the return for either team winning.

What really happens:

This statement is probably the most truthful of the lot, however as I found out, even so-called “guaranteed� two-way trades aren’t always guaranteed (I refer to the Greek Basketball game mentioned earlier in the document.

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End TFO’s Report.

Conclusion

Personally, I don’t trust AusSoft/GlobalSoft at all, but if this information isn’t enough to convince you, then the only thing you need to consider is this: Most arbitrage alert services are ongoing monthly payments, and for that they provide ongoing odds feeds and support. If they stop providing the odds, the support, or if their service falls below expectations, then you stop paying for their service. They are forced, by the market, to remain competitive in order to maintain their own cash flow. Considering another perspective, Microsoft, or Adobe, each sell very sophisticated software for several hundred dollars upfront. This software then works independently for an indefinite period of time (no need to supply odds or data feeds to windows or photoshop for the rest of eternity) so even if Microsoft or Adobe went broke tommorow, the software would continue working. These companies maintain customer support and regular updates because they are huge companies, they provide many different programs and they often create new versions of the programs they have already sold (improved version, more features etc), and so they want their customers to be happy with them so those customers will buy more software, or buy the new version when it comes out. On the other hand, when a company has one product and requires upfront payment for an indefinitely ongoing service (AusSoft must maintain their odds feeds to Arb-A-Trader forever, and these things change quite regularly)…then by accepting that offer, you are placing yourself in a position of great risk.

So if you are considering buying Arb-A-Trader, then ask yourself this: Even if the software is good, how long will it be good for? Will it pay itself off before it becomes obsolete/unsupported?

So, before you jump in the deep end, please follow the advice laid out all through SportsArbitrageGuide: TAKE A FREE TRIAL FIRST! Practice arbitrage for free before you jump in! Take your time! Use a cheap service for a month or two first so you can practice, then decide whether you want to commit yourself to the big expenses, and the life-long commitments.

And for those of you who stumbled across this article from Google and know nothing about Arbitrage other than what AusSoft has told you, be sure to look at the list of arbitrage alert programs that are available, and the free trials you can take.