Arbitrage Betting Explained

The phrase “arbitrage betting” refers to a specific way to place wagers on sporting events. Bettors who use this method lay bets on the same event at multiple sports betting entities when their research reveals bookmakers offering price points different enough to guarantee a net positive return. In other words (when thoroughly researched and placed properly) this type of wager promises a profit regardless of which way the wager goes.

The term entered gaming parlance through the world of traditional financial investment, where opportunities for arbitrage (also called “arbs”) are an opportunity to take advantage of quote differentials or accidentally-incorrect pricing. Investors, stock brokers, and even real estate and other trading industry personnel use this tool to guarantee a certain return. Because of fluctuations between the odds and lines of different sports betting establishments, sports bettors can place arb bets with the same expectation, provided they know how to do it right.

The Basics Of Arbitrage Betting

To take advantage of the possibilities of this style of wagering, a bettor must watch at least two bookmakers’ numbers closely. Once the price differential is high enough between two different venues to create an opportunity for an arb, the customer simply lays both sides and waits for the event to end. Regardless of the outcome or the odds involved, the player can’t lose money. Big differences between lines were difficult to find in the days before instant access online – now that internet sports wagering is available, the research required is reduced significantly.

Here is a fictional (and simplified) example of the type of wager a gambler using this strategy would favor. Sportsbook A offers odds of 1.5:1 for the Yankees to beat the Orioles outright in tonight’s game. Sportsbook B offers the Orioles odds of 5.36:1 for a victory. An investor with $1,000 to wager could place bets on both sides, one at each book, and earn a profit either way. Let’s look at the numbers:

Using basic mathematics, the punter in question would lay a bet of $726.92 on the Yankees with Sportsbook A, another wager of $203.42 on the Orioles at Sportsbook B, and have a few bucks left over from his original $1,000 stake to have a decent steak dinner and wait for the game to end.

In this scenario, a winning bet that size on the Yankees would lead to a payout of $1,090.38. Since the total amount wagered at both books was only $930.34, that’s a profit of $160.04 even after the impact of the losing wager. Should the Orioles pull off the upset, the total payout is almost identical at $1,090.33, which (after the cost of both wagers) also gives the bettor a profitable result, $159.99 to be exact.

What Causes Opportunistic Differences in Odds?

The main factor in the creation of arbs is the tendency of bookmakers to have sports niches they are experts in and others they are less knowledgeable about. Sport tends to be heavily-localized – it’s less likely that a bookmaker in Eastern Europe will know the ins and outs of American college sports than that they’ll place an accurate FIFA line. The same works in reverse – USA online sportsbooks have their special interests as well as gaps in their understanding of how sport works around the world.

Now that sports wagering is an international business books have to stay competitive by providing a variety of wagers, even in areas they don’t know enough about to lay a good set of odds. The result is sometimes an opportunity for arbitrage. The biggest factor working against the availability of this type of sports wager is every bookmaker’s desire to avoid providing an arb. Books tend to not offer odds that deviate far enough from global numbers to allow this kind of wagering to occur.

Difficulties with Arbs

In the above example a total investment of $930 resulted in a sure profit of around $160. A guaranteed return of close to 16% is not something arbitrage bettors come across that often – the numbers were simplified to illustrate the method, not as a real-world example. For-sure returns are normally smaller than 5%. That’s a small advantage for a sports wagering method that requires a lot of time and patience.

Besides the small return compared to the required investment of time and money, other aspects of the Internet gambling and sports wagering industries can get in the way of placing sure-thing arbitrage bets.

A bettor’s bankroll can limit or even rule out the chance to place this type of sports bet. Since the margin is usually one or two percent, any limit on the top end of a stake can ruin a chance at an arb. Some sports gamblers simply don’t have the cash to place a big enough bet – sometimes, books set limits on stake size to avoid strategies like arb betting. By the way, all of our USA online sportsbook reviews speak to the betting limits each sports book sets for their players including online and call in limits. Knowing these prior to signing up with a site makes sense if you are looking for arb opportunities.

Don’t forget the impact of account maintenance costs and financial transactions. Depending on what books you’re dealing with, what currencies you’re forced to use, your deposit and withdrawal methods, and other factors, the costs of getting your money into the right places to take advantage of an arb could wipe out the built-in profit margin. Changes in odds, the postponement of a sporting event, and plenty of other “small potatoes” issues can easily put a dent in the profit supposedly guaranteed by this strategy.

Finding Arbitrage Bets

Once you understand the math behind this style of wagering, as well as the risks involved, you can look around for examples of arb opportunities in a few different ways.

The easiest and most rewarding is probably locating a wager of this type on your own. Yes, this means watching the numbers at various books and keeping notes (not to mention a calculator), but once a bettor learns to look at early unadjusted prices and perfect their personal research strategies, locating arb wagers on your own is the easiest of all methods.

Another way some bettors seek out profit-guaranteed arb wagers is on gambling forums or in private conversation with other punters. Of course, arbitrage gamblers aren’t likely to spread the word about a particularly profitable venture, since too much action could alert the book to their mistake. Besides, who wants to give away their time spent researching a wager for nothing? Finding arb bet opportunities from other gamblers is possible but less likely to work than doing the work on your own.

A final method used by sports bettors to put this strategy in action is the use of websites or members-only services that compare odds from various books and highlight differentials that can lead to arbitrage wagering. Special subscription-only alert services exist that let their members know when a chance for an arb presents itself. Of course, using this service costs money and adds to a gambler’s bottom line, taking another small bite out of a bettor’s total bankroll and expected profits.

Arbitrage Sports Betting Software To Lock In Sure Winners

We have looked into several sports betting software’s that help to locate arbitrage opportunites. Based on our research, the best on the market seems to be Rebel Betting. For signing up through our special link, new users will receive a free ebook that helps you to get a better understanding on what arbitrage betting is and how to master it. You also get access to the free version of the software with no obligation to purchase a subscription. If you like what you see and feel it has value to you, then you can move forward with a subscription.

There are a ton of features that the software offers including alerts, automation for placing a bet, arbitrage calculators and much more.

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