risks from arbitrage betting

Arbitrage betting is a way of winning bets, regardless of the outcome. So you will be wondering, if that’s so simple why isn’t everybody doing it? The hard fact is that there are many things that you have to consider when performing arbitrage betting.

The main risks of arbitrage betting are:

  1. Bet cancellations
  2. Individual errors
  3. Bookmaker limitations
  4. Moving odds
  5. Stake restrictions
  6. Capital Diffusion

At arbitrage betting, you have to make big bets to win small amounts and the slightest mistake could cost a lot of money. You will need a series of winning bets to cover for that one loss. The good thing is that there are ways to minimize your risks and even if you have some losing bets you can still be profitable in the long run.

Below is a list of the most common problems you can face when placing arbitrage bets:

Bet cancellation

A bookmaker can cancel your bet at any time claiming that they have made a mistake when setting their odds. The bet can be voided before the kickoff, in play, or in some rare cases after the end of the game. That will leave you exposed on the one side of the arb bet, on the bookmaker that has taken your bet.

The solution

You can minimize the risk by doing the following:

  • Avoid obscure bookmakers. Reputable bookmakers rarely will void a bet after the start of the game. Also, the big bookies may send you an email alert about the cancellation of a bet.
  • Check the odds on other bookmakers. If one bookie has odds a lot higher than the average of the others you should avoid that bet. It might be tempting to bet on high percentage arbs but you should accept the risk of that practice.
  • Double-check the odds after placing the bet. If you are suspicious about a bookmaker or the odds that you have taken check your bets periodically to see if they are still active.

If you still face a cancellation never leave the one side open. It’s better to take a small loss by covering the open bet than gamble your entire stake. The profits from the next bets will cover that small loss easily.

If you find out that the bet has been canceled after the match is settled then you can do nothing about it. Accept it, learn from that experience and move on.

On the other side, you can end up with a big profit if the open bet is the winning one, but this will rarely be the case. Remember, we are making an investment and there is not need to take unnecessary risks.

Individual errors

When betting on arb bets the stakes are high and that can be stressful especially for a beginner. Also, the odds that we want are moving fast leaving us with few seconds or minutes to place the bets. Placing arb bets can be a challenge for bettors and you need to keep your calm and focus at any time if you want to be a successful arbitrage trader.

Some of the most common errors are the following:

  1. Bet on the wrong team or market.
  2. Placing the wrong stakes.
  3. Not having enough funds in the second bookie to cover the first bet.
  4. Sometimes the arbing software may redirect you to a different event ( the U20 match which is played on the same day as the main event for example). If you are not careful you might end up placing bets on different events.
  5. A different set of rules across bookmakers. For example, after player withdrawal due to injury in tennis bookmakers can settle the game in a different way.

The solution

You can minimize the risk by doing the following:

  • Always verify the bets before placing them at the bookmakers. Double-check the participants, odds, stakes, etc.
  • Avoid placing your bets close to the kickoff in order to have time to correct any errors.
  • Double-check the terms of the bookmakers (especially in tennis matches).
  • Always familiarize yourself with the bookie interface before placing any arbs by making some random bets.

Again never take any open bets in play and always cover your bets.

Bookie limitations

Bookmakers don’t like arbitrage bettors and will always limit their accounts. This is inevitable and is a fact that you’ll have to accept. Just think of the successful casino players. They will be kicked out from the casinos eventually. Bookmakers, just like casinos, will always like losing players.

You may get limited after a few bets or after months and years. The depends on how aggressive the bookmaker is against arbitrage bettors. There are also bookmakers that will never limit you such as Pinnacle, Asians and the exchanges (Betfair, Betdaq, etc.). Unfortunately, it’s almost impossible to find arbs between those bookmakers.

Hopefully, there are ways to avoid getting limited and to extend your accounts. You can read more about that in my article on how to avoid bookie limitation.

Moving odds

The most common problem of arbitrage betting is the quickness that the odds are changing. You may have found an arb and after placing the bet in the first leg you find out that the odds on the other bookmaker have dropped. That will result in a negative arb and a losing bet.

The solution

You can minimize the risk by doing the following:

  1. Avoid markets with high volatility.
  2. Place the first bet with the bookmaker that is less likely to move the odds.
  3. Open the bookmaker pages at the same time and try to place the bets simultaneously.

If you are not able to cover the one leg with a profit, cover it with lower odds even if the result is a small loss.

Stake restrictions

In most cases, you will not know what the bookmaker limits in a specific market are. You will found that only after placing the bet. So you may have placed the bet in the first leg only to found out that the second bookmaker doesn’t allow you to stake the amount you need to cover the first bet. In that case, you have to bet in lower odds or in a different bookmaker, resulting in a negative arb.

The solution

You can minimize the risk by doing the following:

  1. Place the first bet in the bookmaker that you do not know what the stake limit is.
  2. If you do not know the bookmaker limits place the second leg in the one that has higher limits.
  3. Never leave any open bets uncovered. It’s better to lock a small % loss than risk higher losses.

Capital diffusion

It is common for the money to be piled up in one bookmaker after a series of winning bets. If you consider the fact that it can take some time to withdraw your funds,  you have to make sure that you have sufficient funds in the other bookmakers to continue your activities.

If you are bonus hunting simultaneously with arb betting,  the money is locked in the bookmaker balance until you meet the rollover requirements. Again it may take some time to be able to withdraw them and if you are winning in that bookmaker the amount locked can become substantial.

Also, the bookmakers are getting very strict regarding the verification of the accounts. So it may take some time before they release your funds after the withdrawal request.

The solution

You can minimize the risk by doing the following:

  1. I always suggest having 10% of your capital in your e-wallets to be able to deposit them at any time.
  2. Keep a record of your bets and bookie balances at any time.
  3. Complete the verification process by sending all the appropriate documents when opening the account and not when it’s time for withdrawal.

Other potential risks of arbitrage betting

  1. Some bookmakers may have withdrawal fees. Those fees should be calculated when placing bets on these bookies.
  2. The e-wallets may also impose some fees when transferring money between them
  3. Some countries may impose taxes on your winning bets. That can easily wipe out the small percentage profit from a typical arb bet.
  4. Punter mindset. If you cannot hold your feelings and end up taking uncovered bets then losses are inevitable. So you need to develop a proper betting mindset before starting any arbitrage betting activities.

Final thoughts

Arbitrage betting is getting tougher and tougher all the time so losses are inevitable.

In any case, you have to accept all the losses as part of the investment that you do at arbitrage betting. Analyze what you have done wrong, learn from your experience, and move on to the next bet.

Hopefully, many of the risks can be minimized with the use of arbitrage betting finders. Many of them will find the bets for you, calculate the stakes or even log you in the bookmaker site and place the bet in the bet slip. If you are new to arbing you should better start that way as many of the potential risks mentioned above will be reduced.

I hope that you have found my article useful and informative. If so feel free to share it or leave a comment below.

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billgkrtips
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