Arbitrage Betting – How Does Arbitrage in Sports Betting Work?

Arbitrage betting, often referred to as ‘arbing’, is a popular strategy in sports betting. It involves placing a wager on an event with a sportsbook at a higher price than betting against it (laying) at a lower price on a betting exchange, guaranteeing a profit regardless of the final result.

Stay tuned as we go deep into arbitrage betting and explain how this (potentially) lucrative betting technique works.

What is Arbitrage Betting?

According to Statista, the online betting industry is expected to jump to \$114.4 billion by 2028, and with this growth, many are diving in, hoping to strike gold with different strategies. Among various betting strategies bettors use is arbitrage betting.

Arbitrage betting is a strategy that exploits the variation in odds offered by different bookmakers for the same event to guarantee a profit regardless of the outcome. This method is mathematically calculated to ensure that a profit is made irrespective of the result.

Here’s a simplified breakdown:

• Different bookmakers have different opinions, systems, and data, leading them to offer different odds on the same sporting event.
• Occasionally, these odds can vary to such an extent that placing wagers on every possible outcome with the right amounts can guarantee a profit.
• Bettors can take advantage of these discrepancies by placing bets on all possible outcomes to lock in a guaranteed profit.

Let’s take an example of a football (soccer) match between Team Blue and Team Red for simplicity.

• You have \$200 to invest in the match
• Bookmaker A is offering odds of -225 on Team Blue. So, you bet \$140.58.
• Bookmaker B is offering odds of +250 on team Red. So, you bet \$58.42.
• Total payout in either outcome: \$204.44
• Profit = \$204.44-200 = \$4.44

In this scenario, you’re making a profit in both cases. However, we’ve taken a hypothetical example to explain how arbitrage works. We’re making a profit because of the considerable difference between the odds of both bookmakers. The difference may not be this huge in real-world scenarios. Here are a few things you need to keep in mind while engaging in real-time betting.

• Odds change rapidly, so swift decision-making is crucial.
• Bookmakers might limit or close accounts that frequently engage in arbitrage betting.
• Transaction fees and other costs can affect the profitability of arbitrage opportunities.

How Does Arbitrage Betting Work?

Arbitrage in sports betting revolves around the discrepancies in odds provided by different bookmakers. When these odds allow a bettor to bet on all possible outcomes of an event and still secure a profit, an arbitrage opportunity arises. To fully exploit these opportunities and calculate the exact amount to stake on each outcome, bettors typically use specialized tools, such as an arbitrage calculator.

Imagine this: Two bookmakers offer different odds for a tennis match between Player A and Player B. Due to varying analyses, opinions, or even errors, these odds can sometimes be set in such a way that by strategically placing bets on both outcomes (Player A winning and Player B winning), you can ensure a profit.

To make this clearer, let’s visualize it.

Bookmaker 1’s odds

 Outcome Odds Player A -110 Player B +110

Bookmaker 2’s odds

 Outcome Odds Player A +110 Player B -110

Here, if you bet on Player A with Bookmaker 2 and Player B with Bookmaker 1, you can guarantee a profit due to the discrepancy in odds. To know precisely how much to bet on each outcome to maximize profit, you’d use an arbitrage calculator.

Calculate Your Profit From Arbitrage Betting

Using an arbitrage calculator makes the process straightforward. Here’s how you’d go about it:

• Input the Odds: Begin by entering the odds for each outcome from different bookmakers. Using our above example, you’d input 2.1 for Player B at Bookmaker 1 and 2.10 for Player A at Bookmaker 2.
• Enter Your Total Stake: This is the total amount you are willing to bet. Let’s say you want to bet a total of \$100.
• Review the Calculated Stakes: The calculator will then tell you how much to stake on each outcome. For instance, it might suggest betting \$52 on Player A and \$48 on Player B.
• Place Your Bets: Using the calculated stakes, place your bets with the respective bookmakers.
• Calculate Potential Profit: No matter the outcome, the difference between your total stake and the total potential return represents your profit.

While arbing seems attractive, it’s essential to act quickly because the odds can change. Furthermore, always consider transaction fees or limits set by bookmakers.

What Are the Advantages of Arbitrage Betting?

Arbitrage betting, a technique often embraced by seasoned bettors, offers numerous benefits that can potentially increase the profitability of one’s betting endeavors. Here are the distinct advantages of employing this strategy:

• Guaranteed profit
• Edge in live betting
• Diversification
• Exploiting bookmaker mistakes
• Learning opportunity
• Enhanced efficiency with tools
• Benefit from differences in market opinions

Difference Between Arbs & Price Boosts:

Arbitrage opportunities and price boosts are both valuable tools in the bettor’s arsenal, but they serve different purposes and have distinct characteristics. Both strategies can be used to make money from betting. but they are different in a few key ways.

 Feature Arbing Price Boost Guarantees profit Arbing is a mathematical strategy that guarantees a profit, regardless of the outcome of the event. Price boosts, on the other hand, do not guarantee a profit. Requires multiple bookmakers Arbing requires you to place bets on multiple bookmakers. Price boosts can be used to place bets with a single bookmaker. Time-consuming Arbing can be more time-consuming than price boosts. Price boosts can be placed quickly without any calculations. Profitable in the long term Arbing can prove profitable with a long-term approach Price boosts can be more profitable in the short term.

Is Arbitrage Betting A Worthwhile Strategy?

With the global number of bettors set to reach over 174 million by 2027, the industry is about to get competitive, with arbitrage betting rising in popularity. Like any betting strategy, arbing has its merits and drawbacks. Let’s delve into both sides.

Pros

• Guaranteed Profits: By using tools like an arbitrage betting calculator, you can determine the exact amounts to stake, ensuring returns regardless of the event’s result.
• Minimized Risk: As you’re covering all outcomes, the risk associated with the uncertainty of sports outcomes is removed, making it appealing to risk-averse bettors.
• Efficient Tools Available: Several tools and platforms such as the arbitrage betting finder, help spotting and capitalizing on arbing opportunities more accessible.
• Versatility Across Sports: Arbitrage betting can be applied across various sports, from football to tennis, broadening opportunities to diversify.
• Skill Development: Regular engagement with arbitrage betting sharpens skills in observation, financial management, and quick decision-making.
• Opportunity for Continuous Learning: Arbers are continually adapting, learning about new teams, players, strategies, and the broader sports landscape.

Cons

• Limited Profits: The margins are often slim. Returns range from 1% to 5%, meaning that to win substantial amounts, a sizable bankroll is required.
• Lack of Liquidity: Some arbitrage opportunities arise in markets or events where there isn’t much liquidity, meaning a lower stake than you’d like.
• Speed is of the Essence: Bookmakers are swift in adjusting their odds, so arbitrage opportunities can disappear in minutes or seconds. Tools like a betting arbitrage calculator must be used quickly to take advantage of odds before they change.
• Potential Bans or Restrictions: If a bookmaker suspects you’re using their platform just for arbing, they may limit your bet sizes or close your account.
• Complexity and Effort:  A requirement for accounts with multiple bookmakers, managing money between them, and being alert to shifting odds.

Are There Risks With Arbitrage Betting?

At first glance, arbitrage betting appears risk-free due to its promise of a guaranteed return showing profit. However, upon closer examination, several nuances and potential pitfalls can challenge its “no-risk” image.

• Discrepancies in Bookmaker Rules – Different offshore sportsbooks can have distinct rules for settling bets, including game postponements and player withdrawals.
• Palpable Errors – Bookmakers might offer odds that are mistaken (often termed “palpable errors” or “palps”). These bets can be voided, and you could be left exposed.
• Bet Cancellation – If one leg of a bet is canceled, you’re exposed on the other bets.
• Stake Limits – Can prevent you from placing a large bet to realize the expected profit.
• Swiftly Changing Odds – You could end up without a profit or, worse, a loss.
• Financial Liquidity – You often need funds spread across multiple betting accounts.
• Account Limitation or Closure – Stakes might be limited or an account closed.

Hedging vs. Trading vs. Arbitrage Betting

The worlds of sports betting and financial markets offer various techniques to mitigate risks and seek profits. Among these are hedging, trading, and arbitrage betting. While these terms can overlap, their strategy and approach are fundamentally different. Let’s use soccer to illustrate each concept.

Hedging

Hedging involves placing more than one concurrent bet in opposite directions to limit the risk associated with adverse movements in odds or prices. In hedging, you initially place a bet with a single conviction. Let’s say you believe team A will win a match, and you place a bet accordingly. However, you also bet on team B to reduce your losses in case team A loses.

Trading in betting is much like the stock market game, but with sports odds. You can get ahead of the odds compilers by taking higher odds than you think they will be in the future, which works especially well with ‘live betting’. It’s a savvy way to cash in on changing game dynamics. The goal is to guarantee a profit, irrespective of the event’s result.

Arbitrage Betting

Arbitrage betting focuses on exploiting a price difference between more than one betting market to guarantee a profit, usually before the event starts.

While hedging, trading, and arbitrage in sports betting all have the same objective – to mitigate risks and secure profits – their methodologies are distinct. Hedging is reactive and often used in play, trading focuses on shifting odds, and arbitrage takes advantage of market inefficiencies. Soccer betting apps, with their dynamic and globally-followed matches, provide myriad opportunities to apply these strategies. For those keen on using these techniques, tools like the betting arbitrage calculator are crucial for optimizing bets and ensuring favorable outcomes.

Best Sports For Arbitrage Betting

Arbitrage betting, at its core, is about capitalizing on differing odds among bookmakers for the same game. While this method can technically be applied to any sport, certain sports are more conducive to arbitrage opportunities. Let’s delve into why sports like the NFL, NBA, and others are particularly suitable for this strategy.

1. NFL (American Football)

• Popularity: With its vast audience, bookmakers from different regions offer odds, leading to discrepancies – making NFL betting a popular breeding ground for arbs.
• Market Depth: There are numerous prop bets, over/under, and spread bets.

• Frequency of Games: NBA teams play multiple times a week. This frequency means bookmakers have to adjust odds rapidly, leading to potential disparities.
• International Interest: Bookmakers worldwide offer NBA odds, and differences in opinion or timing can lead to varied odds, making NBA betting lucrative.

Reasons Some Sports Are Suited For Arbitrage Betting:

• Global Appeal: Sports with bookmakers from different regions setting odds. Different betting market conditions and assessments can lead to different odds.
• Multiple Betting Markets: The more types of bets available (moneyline, spread, totals, prop bets), the higher the chance of finding discrepancies.
• Frequency & Volume: A regular and high volume of games ensures bookmakers are continually setting and adjusting odds, and can include mistakes or slow adjustments.

While the NFL and NBA are great examples, other sports like soccer, tennis, and cricket also provide fertile ground for arbitrage betting due to their global following and extensive betting markets. These sports are expected to take the total US sports betting revenue to a massive \$10 billion by 2028 — a huge opportunity for all new and seasoned bettors.

Tips For Finding Arbitrage Bets

Embarking on the journey of arbitrage in sports betting requires a well-thought-out strategy. While the allure of guaranteed profits is strong, finding and executing arbitrage opportunities isn’t as straightforward as one might think. Here are some crucial tips to help you get started:

• Understanding the Landscape: Get familiar with the major multiple sportsbooks and the types of bets they offer. Different platforms might provide varied odds for the same event, leading to arbitrage opportunities.
• Tools to Assist: Using tools like an arbitrage betting calculator or an arbitrage betting finder can help pinpoint these differences with precision.
• Staying Updated: Following arbitrage tipsters on platforms like Twitter or dedicated betting communities can provide real-time betting discrepancy insights. You can also find some of the best sportsbooks on Reddit communities.

2. Take it Slow

• Understanding the Basics: Before diving in, ensure you comprehend how arbitrage works. Familiarize yourself with using a betting arbitrage calculator to understand potential profits and stakes.
• Start with Major Events: Big events like the Super Bowl or the FIFA World Cup are more likely to have varied odds due to their global audience. They can be a good starting point.

• Setting a Budget: Determine a fixed amount dedicated to arbing. This ensures you don’t overextend and risk too much of your capital.
• Diversify: Don’t put all your money on one arbitrage opportunity. Spread it out over multiple opportunities to mitigate potential risks associated with bet cancellations or errors.

4. Know When to Make Use of Arbitrage Bets

• Timing is Key: Some arbitrage opportunities arise due to temporary mistakes or delays in updating odds. Recognize when to jump on such opportunities before they vanish.
• Understand Terms & Conditions: Some bookmakers may have terms limiting arbitrage, such as bet caps or account restrictions; review these before betting.

The Best Sportsbooks for Arbitrage Betting

It is important to note that arbitrage betting depends on the specific circumstances. You may need to try out a few new sports betting sites. It’s also worth noting the sharpest sportsbooks with the earliest lines to take advantage of.