The Top Guide to Arbitrage Betting: How to Arbitrage Bet Successfully

14 min read
Sep 9, 2024, 7:15 AM
Author
Nick Ashbourne
Nick Ashbourne
Senior Writer
Last Updated: Sep 19, 2024, 3:29 PM

What is Arbitrage Betting?

Arbitrage betting, often referred to as "arbing" or "sure betting," is a strategy in sports betting that aims to generate a guaranteed profit by placing multiple bets on all possible outcomes of a sporting event at odds that guarantee a profit regardless of the outcome. This technique takes advantage of discrepancies in odds offered by different bookmakers or betting exchanges.

The concept of arbitrage betting is based on the principle that bookmakers may offer different odds for the same event. It is not possible to make an arbitrage wager by making two bets with the same betting company.

By carefully selecting and placing bets on all possible outcomes across multiple bookmakers, a bettor can potentially lock in a profit regardless of the actual result of the event.

Arbitrage opportunities occur when the combined probabilities implied by the odds offered by bookmakers are less than 100%. This discrepancy allows bettors to place strategically sized wagers on each outcome, ensuring a profit regardless of which outcome actually occurs.

For example, in a tennis match between two players, if one bookmaker offers odds of +105 for Player A to win, and another offers odds of +105 for Player B to win, an arbitrage opportunity exists. By placing appropriate stakes on both outcomes, a bettor can guarantee a profit.

Understanding Arbitrage Betting Concepts

To fully grasp arbitrage betting, it's essential to understand several key concepts that form the foundation of this strategy. 

These include implied probability, overround, and the mechanics of how arbitrage opportunities arise in the betting market.

Implied probability is the likelihood of an outcome occurring, as suggested by the odds offered by bookmakers.

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Overround, also known as the "vig" or "juice," is the margin built into bookmakers' odds to ensure their profit. It's why the total implied probabilities of all possible outcomes in a market typically sum to more than 100%. Arbitrage opportunities arise when this sum falls below 100% across different bookmakers.

The mechanics of arbitrage betting involve identifying these opportunities and then placing precisely calculated bets on each outcome to lock in a profit. This often requires quick action, as odds can change rapidly, especially in live betting markets.

Example: In a soccer match, if Bookmaker A offers odds of +110 for Team X to win, and Bookmaker B offers odds of +115 for Team Y to win (in a two-way market), an arbitrage opportunity exists. The implied probabilities are 47.62% and 46.51% respectively, summing to 94.13%, which is less than 100%.

Arbitrage Betting Opportunities

Arbitrage betting opportunities come up in various situations and across different sports and betting markets.

Some common scenarios include:

  1. Bookmaker disagreement: Different bookmakers may have varying opinions on the likelihood of certain outcomes, leading to discrepancies in odds.
  2. Slow updates: Some bookmakers may be slower to update their odds in response to new information or betting patterns, creating temporary arbitrage windows.
  3. Promotional offers: Boosted odds or special promotions by bookmakers can sometimes create arbitrage opportunities when combined with standard odds from other bookmakers.
  4. Liquid markets: High-volume betting markets, such as major football leagues or Grand Slam tennis tournaments, often provide more arbitrage opportunities due to increased competition among bookmakers.
  5. Cross-market arbitrage: Opportunities can arise by comparing related markets, such as match result and handicap markets in football.

Identifying arbitrage possibilities requires constant monitoring of odds across multiple betting platforms. Many arbitrage bettors use specialized software or odds comparison sites to quickly spot and capitalize on these opportunities.

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Arbitrage opportunities are often short-lived, sometimes lasting only a few seconds, especially in live betting markets where odds can change rapidly.

Is Arbitrage Sports Betting Legal?

The legality of arbitrage sports betting is a complex issue that varies depending on the jurisdiction and the specific methods employed. 

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In most countries, arbitrage betting itself is not explicitly illegal. However, it often operates in a grey area and may violate the terms and conditions of many bookmakers.

From a legal standpoint, arbitrage betting is generally considered a form of advantage play, similar to card counting in blackjack. It's not illegal to use publicly available information (in this case, odds) to make betting decisions.

However, bookmakers are private companies that reserve the right to refuse service to anyone, including those they suspect of engaging in arbitrage betting.

In some jurisdictions, there may be legal considerations related to the use of multiple accounts, VPNs, or other methods often employed by arbitrage bettors to circumvent bookmaker restrictions. 

Additionally, tax implications of arbitrage betting profits should be carefully considered, as they may be subject to gambling or income tax depending on local laws.

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While arbitrage betting is legal, some methods used to facilitate it (such as fraudulent account creation or identity theft) are clearly illegal and can result in severe penalties.

How Do Betting Companies Respond to Arbitrage Betting?

Betting companies generally view arbitrage betting unfavorably, as it can potentially eat into their profits. 

As a result, they employ various strategies to detect and deter arbitrage bettors:

  1. Account monitoring: Bookmakers use sophisticated algorithms to monitor betting patterns and flag accounts suspected of arbitrage betting.
  2. Stake limitations: Accounts identified as potential arbitrage bettors may have their maximum stake sizes reduced, limiting their ability to profit from arbitrage opportunities.
  3. Account closure: In some cases, bookmakers may close accounts of suspected arbitrage bettors or limit them to recreational betting only.
  4. Delayed bet acceptance: Some bookmakers implement a delay in accepting bets, particularly on live events, to reduce the risk of arbitrage betting.
  5. Odds alignment: Bookmakers often monitor competitors' odds and quickly adjust their own to eliminate arbitrage opportunities.

Sportsbooks argue that arbitrage betting goes against the spirit of gambling and can negatively impact their ability to offer competitive odds to recreational bettors. 

That said, some smaller or newer bookmakers may tolerate or even welcome arbitrage betting to a certain extent, as it can help them adjust their odds and manage risk.

Many bookmakers explicitly prohibit arbitrage betting in their terms and conditions, reserving the right to void bets or close accounts of users engaged in this practice.

Arbitrage Betting Strategies

Successful arbitrage betting requires a combination of strategies to identify opportunities, manage risk, and maximize profits. 

Here are some key strategies employed by arbitrage bettors:

  1. Software utilization: Many arbitrage bettors use specialized software or subscription services that scan numerous bookmakers in real-time to identify arbitrage opportunities.
  2. Bankroll management: Proper bankroll management is crucial in arbitrage betting. This involves carefully sizing bets to maximize returns while maintaining a buffer for unforeseen circumstances.
  3. Multiple accounts: Maintaining accounts with a wide range of bookmakers increases the likelihood of finding arbitrage opportunities and helps spread betting activity to avoid detection.
  4. Focus on liquid markets: Concentrating on high-volume betting markets, such as major sports leagues, can provide more frequent and stable arbitrage opportunities.
  5. Quick execution: Given the often fleeting nature of arbitrage opportunities, the ability to place bets quickly and accurately is essential.
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Some arbitrage bettors focus on specific sports or leagues to develop expertise and efficiency in identifying and exploiting opportunities in those areas.

Managing Risk and Minimizing Losses

While arbitrage betting aims to guarantee profit, it's not without risks. Effective risk management is crucial for long-term success. 

Key risk management strategies include:

  • Careful calculation: Double-checking all calculations before placing bets is essential to avoid costly errors.
  • Accounting for commissions: When using betting exchanges, factor in commission rates when calculating potential profits.
  • Partial arbitrage: In some cases, it may be prudent to only partially hedge a bet if the arbitrage opportunity disappears before all bets can be placed.
  • Monitoring for palpable errors: Be cautious of odds that seem too good to be true, as bookmakers may void bets placed on obvious pricing mistakes.
  • Diversification: Spread activity across multiple bookmakers to reduce the impact of potential account limitations or closures.

Always have a contingency plan for situations where odds change mid-bet or where a bookmaker cancels a bet.

Arbitrage Betting Tools and Resources

Various tools and resources can aid in identifying and executing arbitrage bets:

  • Arbitrage calculators: These tools help determine optimal stake sizes for each bet to ensure equal profit regardless of the outcome.
  • Odds comparison websites: These platforms aggregate odds from multiple bookmakers, making it easier to spot potential arbitrage opportunities.
  • Arbitrage betting software: Specialized software can automatically identify arbitrage opportunities and sometimes even place bets on the bettor's behalf.
  • Virtual Private Networks (VPNs): These can be used to access geo-restricted bookmakers, expanding the range of potential arbitrage opportunities.
  • Forums and communities: Online communities of arbitrage bettors can provide valuable insights, tips, and alerts about bookmaker policies.

Below is a quick summary of the tools available and how arbitrage bettors prioritize them:

Tool TypeFunctionImportance
Odds Comparison WebsitesAggregates bookmaker oddsCritical
Arbitrage CalculatorDetermines optimal stakesHigh
Arbitrage Betting SoftwareIdentifies opportunities and automates bettingHigh
Virtual Private Networks (VPNs)Accesses geo-restricted sitesMedium
Forums and CommunitiesProvides insights and tipsMedium

Common Mistakes to Avoid

Even experienced arbitrage bettors can fall prey to certain pitfalls. Here are some common mistakes to avoid:

  1. Neglecting terms and conditions: Failing to thoroughly read and understand each bookmaker's terms and conditions can lead to voided bets or account closures.
  2. Ignoring liquidity: In betting exchanges, ensuring there's sufficient liquidity to match your bets is crucial to avoid partial or unmatched bets.
  3. Overestimating profits: Failing to account for factors like commission, currency conversion fees, or withdrawal fees can erode expected profits.
  4. Chasing losses: If an arbitrage bet fails due to odds changes or other factors, trying to recoup losses by placing riskier bets can lead to significant losses.
  5. Lack of record-keeping: Detailed records of all bets, including stakes, odds, and outcomes, are essential for tracking performance and for tax purposes.
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Never assume that an arbitrage opportunity is risk-free. Always double-check calculations and be aware of potential pitfalls before placing bets.

Getting Started with Arbitrage Betting

Arbitrage betting is an advanced wagering strategy that is more complex than placing basic back bets on things like moneylines and team totals

For those considering entering the world of arbitrage betting, here are some steps to get started:

  • Education: Thoroughly understand the concepts, risks, and strategies involved in arbitrage betting before risking real money.
  • Start small: Begin with small stakes to gain experience and confidence in identifying and executing arbitrage bets.
  • Choose your markets: Focus on a specific sport or league initially to develop expertise and efficiency.
  • Set up accounts: Open accounts with multiple reputable bookmakers, taking advantage of sign-up bonuses where possible.
  • Invest in tools: Consider subscribing to odds comparison services or arbitrage betting software to aid in opportunity identification.

Practice with paper trading (simulated betting) before risking real money to gain experience without financial risk.

Advanced Arbitrage Betting Techniques

As bettors gain experience, they may explore more advanced arbitrage techniques:

  • Cross-market arbitrage: This involves finding arbitrage opportunities across different but related markets, such as match result and Asian handicap markets in football.
  • Dutching: Similar to arbitrage, this technique involves spreading bets across multiple outcomes to guarantee a specific return.
  • Bonus arbitrage: This involves leveraging bookmaker bonuses and free bets to create arbitrage opportunities with reduced or no risk.
  • Sharbing: A combination of shop (in-person) and online arbitrage betting, taking advantage of discrepancies between offline and online odds.
  • Middling: This advanced technique involves trying to win multiple bets by taking advantage of line movements between bookmakers.

Conclusion

Arbitrage betting presents a unique approach to sports betting, offering the potential for consistent profits by exploiting price discrepancies between bookmakers. 

However, it requires significant time, effort, and capital investment, as well as a thorough understanding of the associated risks and challenges.

While arbitrage betting can be profitable, it's important to remember that it operates in a grey area of the betting industry. Bookmakers actively work to prevent arbitrage betting, and successful arbers must constantly adapt to changing conditions and restrictions.

Ultimately, whether arbitrage betting is a suitable strategy depends on individual circumstances, risk tolerance, and ethical considerations.

 As with any form of gambling or investment, it's crucial to approach arbitrage betting with caution, thorough research, and responsible practices.

FAQ

Effective Arbitrage Betting

How to arbitrage bet effectively?

Effective arbitrage betting involves using odds comparison tools, maintaining accounts with multiple bookmakers, acting quickly on opportunities, and carefully managing your bankroll and risk.

Legality

Is arbitrage betting legal?

Arbitrage betting itself is generally not illegal, but it may violate bookmaker terms and conditions. Always check local laws and regulations regarding online betting.

Professional Arbitrage Betting

Can you make a living from arbitrage betting?

While some people do make a living from arbitrage betting, it requires significant time, capital, and expertise. It also comes with risks such as account limitations or closures.

Starting Capital

How much money do I need to start arbitrage betting?

The amount needed varies, but a substantial bankroll is typically required to generate meaningful profits. Many arbitrage bettors start with several thousand dollars or more.

Profitability

What is the average profit margin in arbitrage betting?

Profit margins in arbitrage betting are typically small, often ranging from 1% to 5% per bet. However, the frequency of bets can lead to significant cumulative profits over time.

<p>Nick has been fascinated with sports since he was first taken to a Toronto Maple Leafs game back in 1998, and he's written about them professionally since 2014.</p><p>Nick has covered baseball and hockey for outlets like The Athletic, Sportsnet, and Yahoo Sports, and his sports betting expertise has grown since its legalization in Ontario in 2022.&nbsp;</p><p>Between 2022 and 2023 he worked for a betting startup called NorthStar Bets, and in 2024 he contributed to Oddspedia before joining the Responsible Gambler team.</p>
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Meet our Authors

Paruyr Shahbazyan began his business career in 2000 as a private entrepreneur. Over thirteen years, he developed a deep understanding for business and leadership, laying a solid foundation for his professional journey.

In 2013, Paruyr stepped into the sports and betting industry as the founder and president of Bookmaker Rating. This online mass media platform, which he led until 2020, focused on providing in-depth analysis and insights in sports betting, earning a reputation for its quality content. 

Continuing his innovative approach in 2022, Paruyr co-founded Azuro, a decentralized betting protocol. This venture showcases his dedication to integrating advanced technology in the evolving landscape of sports betting. Through these diverse experiences, Paruyr has continuously influenced and shaped the betting industry, driving new trends and setting high standards.

 ExperienceYear
Engaged in private entrepreneurship2000-2013
Founder and President at Bookmaker Rating, an online platform focused on sports and betting2013-2020
Co-founder at Azuro, a decentralized betting protocol2022

"Innovation in sportsbetting comes from a deep understanding of both technology and the human element of sports." 

- Paruyr Shahbazyan, Founder, RG

 

Principles and Ethics

Paruyr Shahbazyan's core beliefs lie in the power of informed decision-making and integrity in the betting industry. He understands that the foundation of successful betting is not just about odds and predictions, but also about the trust and reliability of the information provided. Paruyr advocates for a betting environment where transparency and knowledge are paramount, ensuring that bettors are well-equipped with accurate data and insights.

Strategic Vision

Paruyr's vision is to revolutionize the sports betting industry through the integration of technology. He sees the future of betting as a blend of traditional sports knowledge with innovative tech solutions, like decentralized protocols, to enhance user experience and fairness. His aim is to create platforms that are not only user-friendly but also uphold the highest standards of ethical betting, contributing to a more responsible and enjoyable betting culture.

Future Perspectives

Looking towards the future, Paruyr envisions a betting landscape that is more inclusive, technologically advanced, and globally connected. He anticipates a significant shift towards more decentralized and transparent betting systems, driven by blockchain technology. Paruyr is committed to being at the forefront of this change, continuously exploring new possibilities and innovations that can redefine what it means to engage in sports betting in a digital world. His focus is on building systems that prioritize user empowerment, fairness, and the global growth of the sports betting community.

 

Sol Fayerman-Hansen
Sol Fayerman-Hansen
Editor-in-Chief

Sol has over 20 years of experience in writing for diverse industries including sports, gambling, regulation, technology, and startups. As the Editor-in-Chief at RG, Sol brings a wealth of knowledge and expertise to the role, focusing on delivering transparent, evidence-based content grounded in thorough research. Sol's mission is to empower readers to enjoy gambling responsibly and make informed decisions, enhancing their overall experience through insightful and engaging content. Under Sol's leadership, RG prioritizes the highest standards of integrity and reliability, ensuring that all information provided is accurate and trustworthy. Sol's dedication to transparency and research-based writing helps create a responsible gambling environment where readers can truly benefit from the content. This commitment to excellence has positioned RG as a leading source of information in the gambling industry.

Experience:

  • Over 20 years in writing and editing across multiple industries
  • Former head of regional innovation at BMO Financial Group
  • Senior Writer, Online Casino Reports
Cristina Varela Galan
Cristina Varela Galan
Problem Gambling Expert

Cristina used to work as a Psychology Assistant in the Bizkaia Pathological and Risky Gamblers Association. She was also part of a research team in Deusto University, specializing in pathological gambling area. While working there, she managed to develop her own project 

 “Exploring the association between emotional regulation, alexithymia, stressful life events and gambling in adolescent and young adult women”.

Nick Ashbourne
Nick Ashbourne
Senior Writer

Nick has been fascinated with sports since he was first taken to a Toronto Maple Leafs game back in 1998, and he's written about them professionally since 2014.

Nick has covered baseball and hockey for outlets like The Athletic, Sportsnet, and Yahoo Sports, and his sports betting expertise has grown since its legalization in Ontario in 2022. 

Between 2022 and 2023 he worked for a betting startup called NorthStar Bets, and in 2024 he contributed to Oddspedia before joining the Responsible Gambler team.

Sergey Demidov
Sergey Demidov
Head of News Department

Sergey has been in sports journalism since 2007 as a reporter, editor, and manager. He has covered the Olympic Games, soccer World Cups, the World Cup of Hockey in 2016, the European championships, the Stanley Cup Finals, IOC events, and many others. Sergey interviewed the sport's greatest athletes, coaches, and executives. Since 2016, he has been an Independent Senior Editor of NHL.com/ru.

Anna Kravtcova
Anna Kravtcova
Problem Gambling Expert

Ph.D. in organizational psychology, an internationally certified psychologist (EuroPsy 2022, Cognitive behavioural therapy of mindfulness 2020, International Society for Emotional Intelligence 2017, Russian Psychological society 2014, American Psychological Association(Society for Industrial and Organizational Psychologist) 2011), speaker of many international conferences (USA, Brazil, Portugal, Czech Republic, Russia, etc.). TEDx speaker.

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