What Is Arbitrage Betting?

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Every gambler craves a system – a sure-fire way of making a profit with a simple mathematical formula. However, despite the hundreds on voices on the internet claiming to have the golden ticket to sports wagering profit, proven betting systems are somewhat mythical. That’s not to say that you cannot make a profit from sports gambling, of course you can, and you can even develop your own systems to provide a long-term yield. But your system will always involve statistics, analysis, research and an expert knowledge of the sport.

It could be argued that Arbitrage betting is the one mathematical gambling system that has been proven to work. However, the system does have its own drawbacks and relies heavily on small discrepancies in bookmakers prices to be effective. The mathematics involved can also be very complex and it requires a lot of skill and quick thinking to apply this strategy.

How does it work?                                        

The principle of Arbitrage betting is simple; you place a bet on both outcomes in a sporting event. The system works best in (but is not limited to) events where a draw is not possible. A perfect example would be a singles tennis match.

The reason that this is possible is because bookmakers do not always agree on the odds, and this can create a situation where we can split our stake across two outcomes with different bookmakers in such a way that we are guaranteed a profit.

To spot an arbitrage opportunity, you need to run some numbers. Luckily there is a simple formula that you can use to establish if a bet presents an arbitrage situation.

  • 100/odds1 + 100/odds2 = X

If you put the odds of each player or team in the equation and X equals less than 100 then the bet represents an arbitrage opportunity. You would then split your stake into two bets based on the same equation:

  • Bet 1 would be 100/odds1
  • Bet 2 would be 100/odds2

Arbitrage betting example:

By looking at an actual example of an arbitrage bet from a basketball game, you can see how this works. By taking the odds from two different bookmakers, you can find the ‘Arb’.

  • Team 1 is 1.3 with bookmaker A and 4 with bookmaker B
  • Team 2 is 0 with bookmaker A and 2.9 with bookmaker B

If you backed both outcomes with just one bookmaker, you would have lost money. But if you look at the odds that have been bolded, you will spot the discrepancy. Here’s how it looks in the equation:

  • 100/1.4 + 100/4 = 96.43

The result is less than 100 so you now have an opportunity to guarantee a profit. Based on a total stake of £96.43, you can now split your bets based on the same figures. So, you place £71.43 on team 1 with bookie B and £25 on team 2 with bookie A. Let’s take a look at the results:

  • Team 1 wins: £100 (£3.57 profit)
  • Team 2 wins: £100 (£3.57 profit)

As you can see, you have created a situation where a profit is guaranteed, whatever the outcome.

So what’s the downside?

Arbitrage betting does have its negative points. First of all, you have to find the bets, which can be rather tedious; although they do become more obvious with experience. You also have to act fast as bookies can sometimes adjust odds if it becomes clear that punters have spotted an Arb. You also need to have the confidence to place large bets for small returns, so any mistake on your part could result in a heavy loss. The final point to consider is that, although it is not illegal, not all bookmakers welcome arbitrage betting and you could end up with your account suspended or limited if your activity is flagged up as suspicious.

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