Punters place a series of bets that will either win or minimise their losses, regardless of a game's outcome. They take advantage of different odds offered by bookmakers, who are sometimes based in different countries.
For example, countries A and B could be facing off in a World Cup match. Each team is favoured to win in its own country, so bookmakers on the home turf of each offer different odds. It is thus possible for a punter to place bets in both countries in such a way that, whatever the outcome, the winning bets will offset the losses.
Experts say it is about spreading risk through multiple bets. "You just need to find the right bookmakers with the right combination of odds," said Mr Lau Kok Keng, who heads intellectual property, sports and gaming at law firm Rajah and Tann Singapore LLP. "Some people have designed robot software to track odds offered on the Internet and automatically place bets when they add up to sure-win scenarios."
But such bets are illegal in Singapore for both offshore operators and punters.
"All offshore betting sites that have customers who are physically in Singapore are illegal under Singapore law," said Mr Lau. "Operators of such sites will be committing an offence under the Remote Gambling Act.
"For residents here, arbitrage betting is also a 'sure offence'. The only bookmaker they can legally place sports bets with is Singapore Pools."
Lawyer Ramesh Tiwary said people should be wary if they have to transfer money out of Singapore: "It's the young people who tend to believe the Internet is a safe place."
Police advise the public not to fall for "get rich quick" schemes.
Toh Yong Chuan and Carolyn Khew