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In general, arbitrage is a financial practice of taking advantage of a price differential between two markets. The term is mainly applied to financial instruments but it can be also applied to betting markets.

At arbitrage betting, you are betting on both or all sides of an event in different bookmakers with a combination of bets to guarantee a profit, regardless of the outcome.

While arbs can be found manually, the best and easiest way to find bets is by using arbitrage betting software.

An arbitrage betting example

Below is a simple example to understand better the concept of arbitrage betting.

In a tennis match, a bookie1 is offering odds of 2.05 for player A to win. If we bet 50 euros and that player wins at your balance are added 102.5 euros.

A bookie2 is offering odds of 2.05 for player B to win. If we bet 50 euros and that player wins at our balance in bookie2 are added 102.5 euros.

In total at both bookies, we have placed 100 euros but we have won 102.5 regardless of who has won the game.

The final profit is 2.5 euros and that is in simple terms a 2.5% arbitrage betting opportunity. Now imagine if you can place hundreds of such bets a month and with a higher stake. Your earnings can be substantial.

arbitrage betting example

Why do arb bets exist?

As with every financial market, the odds of every betting market fluctuates. Bookmakers are setting their odds but those do not stay the same forever thus creating arbitrage betting situations. The main reasons for that happening are listed below.

  • Wrong odds. The bookmaker odds are created by humans so it is very possible for a bookmaker to have done wrong on their estimation of an outcome.
  • Odds adjustment. Bookmakers are always trying to have a balanced book in order to earn money despite the outcome of an event (their juice). If they receive many bets in Over 2.5 goals for example then they will raise their Under 2.5 odds to reduce their exposure. That will create instant arb opportunities.
  • Breaking news. An absence of an important player of a particular team will change the odds dramatically in favor of their opponent. If the bookies react poorly to breaking news their odds will be higher than their competitors thus creating an arbitrage bet situation.
  • Reduced margin. Due to the rise of online gambling, bookmakers are reducing their margins in order to lure new bettors. This will make their odds more prone to be part of an arb bet combination.

How to start with arbitrage betting?

In order to start arbitrage betting, you need to set aside a significant amount of money as a bankroll. The bankroll depends a lot on how much you want to make from sports arbitrage and your risk aversion.

It is not easy to make an estimation of how much you are going to make but it’s safe to say that a 10% monthly increase of the bankroll is easily achievable. A 2000 bank will make you around 200 a month. For some, it might seem ok while others may want more.

In my opinion, the minimum bankroll should be around 5000. That amount should be evenly split between the soft and the sharp bookmakers. A 5-10% of the bankroll should be kept aside. That money will be used to fund the bookies that are in a limited balance.

Also, you need to have money available to cover the cost of an arbitrage betting service.

While you can find arbitrage bets by searching manually the bookmaker websites, that can be very time-consuming. It is also not guaranteed that you can find any. You may end up searching for arb bets for several hours every day only to find few or no bets at all.

The best option would be to subscribe to specific betting services, called arb betting finders or arb scanners which, as the name suggests, scan the bookmaker markets, finding multiple arb combinations in a matter of seconds. They also provide other features such as bet tracking, auto-login to bookie sites, and others. You can read more about these services in my detailed article about the best arbitrage betting finder.

Arbitrage betting disadvantages

While the benefits of arbitrage are obvious (guaranteed profits despite the outcome) this betting technique can be costly if done poorly.

There is always the danger of a bet cancelation thus leaving you exposed in the one leg of the arb bet. Also, the bookmakers may have stake restrictions so you may end up taking negative arbs if you cannot cover the full amount in the advised odds. You can also end up with a negative arb if the odds are moving too fast and the value has gone before placing the bets

Individual errors are very common in arbitrage betting. You need to be extra careful when placing your bets and always double-check the odds, the stakes and the event when placing bets in different bookmakers.

By performing arbitrage betting you are exploiting bookie mistakes and make a profit from them. Bookmakers won’t like that so you will be restricted from betting on them after some winning bets.

As you have seen, when placing arb bets some serious risks are involved. You can find more information in my article about the risks involved in arbitrage betting and which are some potential solutions the help avoid losing money.

Conclusion – Is arbitrage betting legal?

Arbitrage betting does not differ from regular betting, therefore is 100% legal. However, it’s your responsibility to verify that online sports gambling is legal in your country.

If you treat it as a real investment arbitrage betting can be profitable in the long run as it the only way to have guaranteed profits every time you bet. You can find more about arbitrage betting at this section of the website.

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

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billgkrtips
billgkrtips.com has been online since 2017 focusing on providing value betting tips to our members.

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