Arbitrage betting explained

Arbitrage betting explained

Arbitrage is an advanced betting strategy. It has come from the financial world. Arbing is a betting system to place multiple bets to guarantee a profit regardless of the outcome.

Before moving forward, you need to know that:

  1. Bettors who take advantage, are sometimes referred to as “arbers”.
  2. An arb is sometimes called a “sure bet” or a “miracle bet”.

In this blog, you can learn all about:

  1. Arb betting
  2. What is it?
  3. How does it work?
  4. Whether it’s legal or not?
  5. The risks involved.

So, Let’s know, What is Arbitrage Betting?

Arbing is the practice of backing and laying the same outcome on a sporting event, taking advantage of any mathematical differences in the odds available. An ‘arb’ is the space between these two points.

When arb betting, the back wager must have better odds than the lay wager.

You need to do it in the right way. If done, this will be a sure profit betting. Regardless, whether the back or lay wager wins.

You don’t need to be a professional bettor for this. It is about finding opportunities.

Arbitrage is a form of hedging. The true definition requires bettors to place their arbitrage bets at the same time.

Now that we know, What arbitrage betting is. Let us explain further with examples.

3 Examples of Gambling Arbitrage:

Hedging:

The practice of betting on one outcome at one bookmaker and against it at another with a different amount. Regardless of the outcome, this can ensure a profit.

Dutching:

Betting on multiple outcomes (via different bookmakers) for a single event, such as football or horse racing. The stake is split so that regardless of which event wins, the profit is guaranteed.

Arb Based on the news:

Before any important match, the news is released that may affect the performance of one team versus the other. Except for one, most bookmakers quickly adjust their odds. Laying that bet quickly yields a profit.

A big question you must be having.

Is Matched Betting a Type of Arbitrage?

Yes, Matched betting involves arbitrage.

Matched betting is a form of arbing. Profit Accumulator members use arbing to cancel out or minimise losses. They place opposing bets on two separate outcomes.

But, the difference is that traditional arbers use their own money.

They use mathematical formulas to maximise profits rather than leaving it to chance.

Matched bettors rely on free bets from sportsbooks to make money. Effectively defrauding the bookie.

How to Find Arbitrage Opportunities?

These are the process you need to follow:

  1. Find a sporting event with two outcomes using an odds comparison site such as Oddschecker.
  2. Find the best odds from two different bookmakers for each outcome.
  3. Determine whether the odds offer an arbitrage betting opportunity.
  4. If so, figure out how much you’ll need to bet at each bookmaker.
  5. Place all of your bets.

What is the Arbitrage Profit Formula?

The next step is to determine how your investment should be divided into stakes across both bets. Because you make the same profit regardless of which outcome wins.

The goal is to make the same profit whether the first or second outcome is successful. It is crucial to use the proper stakes. You might discover that one outcome is more profitable than the other, or that if one outcome wins, you lose money.

To determine the individual stakes:

Individual bets = (Investment x Individual Arbitrage %) / Total Arbitrage %

Rafael Nadal Stake = (Rs. 500 x 84.746%) / 99.032% = Rs. 427.87

Kyle Edmund Stake = (Rs. 500 x 14.286%) / 99.032% = Rs. 72.13

Rs. 427.87 + Rs. 72.13 = Rs. 500 total stake

Therefore, you know that to make a Rs. 4.89 profit from Rs. 500 (0.968% profit) you need to place a bet of Rs. 427.87 on Rafael Nadal to win at an odds of 1.18

Rs. 72.13 on Kyle Edmund to win at odds of 7.00.

As you can see, it is quite a lot of work for less than Rs 5.00 profit, but as mentioned, arbitrage betting calculators can take a lot of the manual work away from this process.

How about, Calculating Your Stake For Outcome B:

As an aside, it is also worthwhile knowing how to calculate the stake for outcome B if you know how much you plan to bet on outcome A.

In the above approach, we split the total stake (£500) into two bets to guarantee the same profit.

We can work out how much to place on outcome B if we have bet £500 just on outcome A.

It is done using the following formula:

Stake for outcome B = Stake for outcome A x (Odds for outcome A / Odds for outcome B).

Rs. 500 x (1.18 / 7.00) = Rs. 84.29 stake for outcome B.

To work out total profit, you would then use the above figures in the following calculations:

Profit if outcome A wins: (stake for outcome A x odds for outcome A) – (total investment)

Profit if outcome B wins: (stake for outcome B x odds for outcome B) – (total investment)

If Nadal wins: (Rs. 500 x 1.18) – (Rs. 500 + Rs. 84.29) = Rs. 5.71

If Edmund wins: (Rs. 84.29 x 7.00) – (Rs. 84.29 + Rs. 500) = Rs. 5.74

So, by investing Rs. 584.29 in this match, you would make a profit of:

  1. Rs. 5.71 if Nadal wins.
  2. Rs. 5.74 if Edmund wins.

How Does Arbitrage Betting Work?

  1. Find an available event with two outcomes.
  2. Choose a monetary value for your final winnings.
  3. Divide that figure by the two odds. It tells you how much to bet on each outcome.
  4. Add all of the outcomes together. The sum represents your investment.
  5. It counts as an arb as long as the winnings figure you set is greater than the investment.
  6. If you did your calculations correctly, you always have the same profit regardless of the outcome.
  7. You place your bets and wait for your profits.

Arbers will try to find the best odds available from various bookmakers to spot an opportunity and place both bets immediately, using basic math to ensure they remain risk-free.

They typically use much larger amounts to make some nice returns. They space out their bets to avoid triggering any alarms.

Most bookmakers do not allow arbitrage betting because it does not involve any element of chance.

Atlast, some Arbitrage betting tips:

Limit yourself to events with two possible outcomes.

Two-outcome markets in a game or event provide the ideal setting for arbing. They offer the best chances of winning, increasing the percentage of wins. Stick with them and take advantage of their advantage.

Make use of automated arbing software:

They not only provide the actual win percentage but they have also been tried and tested. If you do it, you may overlook an important point, which may discourage or mislead you. Look for sites that offer automated arbing software when comparing odds.

Locate your arbs:

The system may presuppose some arbing opportunities, but it is always on the lookout for more. This is true for bookmakers who have embraced arbing. Look for odds comparison websites that will provide you with all possible arbing opportunities.

Always double-check your calculations: If you decide to do it yourself, make sure you have the right figures, formula, and results. Contrast it with automated arbing software. Understand the procedure and figures before using the outcome to bet if you use arbing software