Arbitrage betting – also know as “arbing” – is likely to be a term that you have heard of before, but it’s a concept that only a few people fully understand.
If you don’t know what you are doing, it can be dangerous to use, but if you understand how it works and what you are looking for then you can turn this into a profitable betting angle. Arbitrage betting is closely related to hedging and is the underlying principle in matched betting.
- What is arbitrage betting?
- Does arbitrage betting work?
- How to find arbs
- Example of an arbitrage bet
- Final Overview
What is arbitrage betting?
An arbitrage bet is a method of betting whereby a bettor bets on all possible outcomes of an event, taking advantage of odds discrepancies between markets/bookmakers to make multiple bets on the same event and guarantee a profit, regardless of the event’s outcome.
When you bet normally, you place a bet against a bookmaker, and if your selection wins you will profit from your betting. The risk is that if you lose, you will lose your stake money, and be left with nothing.
What arbitrage betting does is eliminate that risk, putting the person placing the wager in a position where there is no chance of them losing money. The punter is in a no-lose position because they are placing multiple bets and manipulating the odds offered by different bookmakers.
With no risk attached to arbitrage betting, these kinds of betting opportunities are not available all the time, and you have to put a lot of hard work into spotting them.
It is becoming increasingly difficult because bookmakers are doing all they can to prevent these lucrative opportunities, but one thing in the favour of punters is the huge amount of new bookmakers that continue to appear.
It is not easy to find an arb, and it does take time, but when you understand what you are looking for and you find them, you put yourself in a fantastic betting position.
Does arbitrage betting work?
The answer, according to many people, is yes, arbitrage betting does work. However, you need to have a big betting balance, and also a lot of patience to wait for the right opportunities.
To make arbitrage betting work, you have to follow the rules very closely. You need to have spare time available to spot potential arbs, and that includes watching for changes in the betting markets that could work in your favour. These changes can also go against you, meaning the arb is no longer available, so you have to move quickly.
How to find arbs
When a bookmaker sets the odds on an event happening, they base it on their opinion of what will happen as well as what is known as the tissue price. This is an estimate as to what the prices will be.
However, with so many bookmakers taking bets, and so many differences in opinion, there are many different prices available for each event. When bookmakers put their prices up, if they differ in opinion too much then they will potentially create an arb from which you can profit.
When it comes to placing an arbitrage bet, you will need to have several accounts with different bookmakers, and you will need to cover the various outcomes with different bookmakers. If you have done all your working out correctly then this will leave you with a guaranteed profit after you have covered every possibility.
The easiest way to start with arbitrage bets is to use decimal odds, these are available on all of the betting websites online, just change from fractional to decimal when you log on. This will allow you to quickly work out things, without the need to work out the fractional odds for every bet. Check out our top 5 free bet calculators here.
Example of an arbitrage bet
To see how an arb works on a two-way market, look at the market below, which for this example is a football cup final. This is a binary market, where the only possible outcomes are Team A to lift the trophy or Team B to lift the trophy.
Team A vs Team B in the cup final
- Bookmaker 1 fancies Team A to win the game, they are priced up as favourites.
- Bookmaker 2 Fancies Team B to win the game, but prices up Team A as favourites like everyone else.
Bookmaker 1 prices the game up as follows:
- Team A 1.50
- Team B 2.50
Bookmaker 2 prices the game up as follows:
- Team A 1.727
- Team B 2.00
It may not look like it to the untrained eye, but the odds above are perfect to create an arbitrage bet for those lucky enough to spot it. The next thing you need to do is work out how much money to stake on each one, to give you a guaranteed profit.
When doing this you need to pick out a round figure and work out how much you need to spend to win that amount. For this example, the figure used is £100. To find out how much you need to place on each selection to win £100 you need to divide 100 by the decimal odds you are betting at.
- Team A calculation – 100 / 1.727 = £57.90
- Team B Calculation – 100 / 2.50 = £40
This gives you a successful arbitrage bet based on those prices because you can cover both selections for less than £100, meaning you are guaranteed to make a profit on your betting.
Your total outlay here would be £97.90, spread across the two bets. However, regardless of the outcome of the game, you are going to win £100, meaning a guaranteed profit.
This is only a small profit in this instance, of £2.10 but when you multiply this to bigger stakes, and you perform the same on a regular basis when you spot arbitrage opportunities, the money you make soon adds up.
Arbitrage Betting: Final Overview
Arbitrage betting is something that can work for punters just like you, but it is vital when you start that you understand it is not as easy as it may seem.
Arbing involves a lot of time and a lot of working out to find potential bets. Sometimes you may only make a few pounds, other times it will be more, but being disciplined and patient is the key to long-term success as an arbitrage punter.