Arbitrage Betting Explained: Learn Everything You Need to Know

It is possible to make money in betting even without backing a specific team or a player. Such a betting system is known as the sports arbitrage betting, where the punter is primarily focused on taking advantage of any differences in the prices offered by bookmakers for a specific event.

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What is Arbing in Sports Betting?

The term arbing is used to refer a condition where a punter looks to profit on the different prices for the same event. This condition largely comes about due to the presence of several bookmakers, who compete with different numbers for the same event. It is possible to stake on two opposite selections in the same instance while still managing to come out successful with a profit in the returns. As a result, it is often referred to as the surewins by punters.

Arbitrage Betting Bet Example

Bookmakers always have a house edge while giving the odds for a sporting event. The house edge is easily apparent in the case of the American odds betting system or by doing a couple of calculations in the decimal or fractional odds. The arb betting relies on this house edge, and it tries to profit by playing on the negative margin. A great example of this betting system can be found in the sport of tennis. Let us consider Roger Federer and Rafael Nadal coming into a match:

• Bookmaker A is offering odds of 13/50 for Federer’s success and 29/10 for Nadal’s success. Here, the market percentage is at 105%.
• Bookmaker B is offering odds of 21/50 for Federer’s success and 3/2 for Nadal’s success. Here, the market percentage is at 110.4%.

Now, an arb betting punter can choose a Federer win at odds of 21/50 from bookmaker B and 29/10 for Nadal’s success at bookmaker A. This would bring the market percentage at 96.06%.

What is Arbitrage Betting Good for?

One of the best sports for arbitrage betting happens to be tennis, as the punter can ideally target only two outcomes – win for player A or B. In the case of football, three outcomes – win, draw, or loss – are possible. Furthermore, bookmakers offer a ‘double chance’ market in football where punters can predict any two of the three possible outcomes. This betting system is ideal for punters looking at short-term opportunities, as the system does not usually work when it comes to long-term events.

The Return on Investment (ROI) is substantially lower than in other forms of betting, but it has a higher success rate. Typically, an individual can only expect around 3 to 5% as ROI when opting for the arbitrage betting system.

How Does Arbitrage Betting Work?

The arbitrage betting opportunities are created by none other than the bookmakers. The house edge or the market percentage that they place on each sporting event is a prime opportunity for punters to utilise as a weapon, while the opportunity would not be complete without the presence of competition. The variations in odds amongst bookmakers for the same event can be utilised by the punters.

In the earlier example, bookmaker A had a market percentage of 105% while bookmaker B had a percentage of 110.4%. This effectively means that a punter will always lose money if he bets on both outcomes of the same event. However, picking the suitable odds from each bookmaker can result in the market percentage going below 100%. In this instance, the market percentage becomes 96.36% and arb system can result in a favourable outcome for the punter irrespective of the results of the match.

Let us assume that an individual places a £10 wager on Federer at 21/50 with bookmaker A. If this bet is successful, it would return £14.2. Now, the punter only targets a maximum possible return of £14.2 in the bet to back Nadal, who is at 29/10 with bookmaker B. At these higher odds, a stake of just £3.64 is sufficient to hit the £14.2 figure if Nadal wins the game. Hence, the total investment stands at £13.64 while the returns would be £14.2. The betting arbitrage style will be able to provide wins irrespective of a Federer or Nadal win.

How to Find Arbitrage Bets?

There are plenty of opportunities for someone trying to find an arbitrage bet. Bookmakers do not encourage this betting system, as they only lose money in this system. Yet, there are plenty of calculators and tools to find the best surebet options around. It can also be done manually at a comparison site, which can bring together odds from various bookmakers. In order to find the sports arbitrage betting opportunity, one has to find a combination of odds – from two bookmakers – so that the market percentage is below 100%.

In the case of a sporting event with two outcomes, the bookmakers usually has a house edge that increases the market percentage to above 100%. An individual will never be able to beat the bookmaker in this instance, but bringing the edge less than 100% throws up a range of alternatives.

How to Calculate Arbitrage Opportunity?

The surebets or arbitrage opportunity can be calculated manually or through the large number of online calculators available. They can also be calculated using a formula – if the bookmaker odds are expressed in decimal form. The equation that applies in this instance is:

((Outcome 1 odds)-1) + ((Outcome 2 odds)-1) < 1

In other words, the total of the odds inverse should be lesser than one. If the situation holds true, the punter will stand to make money even with betting on both outcomes of a sporting event at the same time. Usually, the returns in the case of the arbitrage betting system are at around 4%.

Arbitrage Betting Pros and Cons

Pros

• The biggest advantage of the sports arbitrage betting is the ability to make returns irrespective of the game’s outcome. As a result, the punter stands to make money in almost every bet.
• Since this system typically pays around 4% as returns, it is possible to make annualised returns that go well beyond 500%.
• An individual can opt for the system even after having bet on a single outcome earlier on. They can hedge later if there is a change in mind or if the odds for the other outcome change substantially to open up the arbitrage betting opportunities.

Cons

• Bookmakers have the right to cancel the bet if they find the punter has been arbitrating, but it is not very common to see bookmakers do this.
• Miraclebets are only great for short-term bets and not ideal for the long-term outcomes. The ROI is substantially lower when compared with a regular bet.