Arbitrage betting explained

Arbitrage betting explained

Imagine a situation, when you bet on all possible outcomes on the market and gain a profit. Sounds crazy but the funniest thing is that it’s possible. It’s possible with arbitrage betting, which is also called surebets, surewinbets. Probably the most used term for arbitrage situation in betting is arb. And players who use this approach are arbers or arbusers.

What is arbitrage betting?

Arbs in betting happens because of the differences in odds at the same markets at different bookmakers. This discrepancy between odds leads to a situation when simultaneously placed bets on different outcomes at one market (at different bookies) secures a profit for bettor (regardless of the final result). Arbs are usually two-way (two different outcomes), but also can three-way (football with 1, X, 2), four-way and so on.

Different odds at different bookies don’t create an arbitrage situation automatically. The differences have to meet the mathematical requirements. And this mathematical requirement is “negative margin”.

Arbitrage betting explained with an example

The term we used earlier (negative margin) has no sense gambling-wise. But you’ll understand what we mean by using it after our example. We have a tennis match between R. Federer and R. Nadal and two different bookmakers with different odds for it.

Bookmaker A offers:

  • R. Nadal – 1.60 or 62.5% (conversion into percentages: 1/1.6 x 100);
  • Roger Federer – 2.3 or 43.5%.

We have 62.5% + 43.5% = 106% or 6% margin at this bookie.

Bookmaker B offers:

  • R. Nadal – 1.50 or 66.66%;
  • R.Federer – 2.75 or 36.36%.

Margin at this bookie is 3%: 66.66% + 36.36% - 100%.

But now we combine R. Nadal odds at bookmaker A and R. Federer odds at bookmaker B. We add the probabilities:

62.5% + 36.36% = 98.86% and with that we got our “negative margin”: 98.86 – 100 = 1.14%.

With this kind of odds, we have a mathematical edge (1.14%) over the bookmaker. We just need to calculate stakes to secure profit. Let’s say we put 100$ on Rafael Nadal at 1.60. How much we have to bet on R. Federer to guarantee a profit? Here is the formula:

Bet size: (Back odds x Back stake)/lay odds = 160/2.75 = 58.18$.

If Rafael Nadal wins:

100 x 1.6 – 100 – 58.18 = 1.82$

If Federer wins:

58.18 x 2.75 – 100 – 58.18 = 1.81$.

The 1.81$ is guaranteed no matter who will win the match in the end.

You don’t have to calculate odds and stake by yourself. Just use an arbitrage betting calculator for it, especially if it's a three-way. And finding arb could be very tiresome too. But there are plenty of websites and software (paid and free), which are designed for this type of betting. They are scanning hundreds of bookies and automatically find opportunities for arbs.

Is arbitrage betting legal?

Bookmakers are rarely saying anything in their rules about arbitrage betting. It will be a hard time to find a rule which prohibits players from it.
At the same time, all betting companies have a rule by which they can restrict (reduce limits, odds, ban account) any player on their will. And this is bookmaker’s tool in the war against arbers. They just cut maxes at the account, or even block players.

And companies have a special department for monitoring players’ activity. There is even a theory that bookies creating some juicy situations for abrs on purpose to catch those, who decide to take advantage of it.

Tips for arbitrage betting

First of all, you need to accept that arbitrage betting can be very tiresome and requires pretty big investments of time and money. To gain decent money arber needs a good turnover of money. Even with 10000$ bankroll and 1% arb your profit will be 100$ at max. Here are some tips, which could be helpful:

  • Use good-quality finders (sites, software) and pay for premium versions. It’s how it is: without paid finder, you won’t earn much;

  • Find a few base arb-friendly bookmakers. The best choices are Pinnacle, exchanges (Betfair, Matchbook), Asian bookies;

  • Do not bet directly from a public finder. Place bets on the website or use private software;

  • Know the limits. Be aware of a max bet possible on the market to avoid huge losses;

  • Be smart with your deposits, style and bets size. If a player deposits a huge amount of money, and bet them all in a second on ITF match on tennis, then it’s a wake-up call. Put nice round numbers (100$ instead of 100.67$) even if you lose some of your profits.

Author:

Art Aronson is a tenured bottom-line professional sports handicapper. He is the best ROI handicapper in the business. He is not your typical handicapper.

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