What is Arbitrage Betting | ProTipster Academy

What is Arbitrage Betting | ProTipster Academy

Arbitrage betting, more commonly known as ‘Arbing’, is where you place multiple bets on all outcomes in a certain market in order to guarantee yourself a profit, whatever the end result may be. Arbing can also be referred to as a ‘surewin’, a ‘surebet’, a ‘miraclebet’ or simply an ‘arb’.

Now, please bear in mind that this will only work when the bookmarker has priced one of the selections HIGHER than the current market price (market price = the odds available on a betting exchange i.e. Betfair, Betdaq, Matchbook or Smarkets). Often, an arb appears on markets with just two selections, such as a Moneyline market in American sports, a Tennis match or an Over/Under market. However, you can get arbs on other markets such as the 1X2, but it’s more common in two selection markets.

Profit Opportunites

Opportunities for arbing usually come about when bookmakers disagree on odds or make a mistake when pricing up the market manually. A lot of the guys in the industry now use betting software, so arbing isn’t as common as it was years ago, but it still happens quite regularly! This method requires no luck, knowledge or stats whatsoever, so you can make profit on any sport and any market regardless of whether you know anything about that sport/market or not.

You’ve probably seen this term all over the internet in recent years, but ‘Matched Betting’ is also a form of arbing. The difference with this method is that you are using bookmaker bonuses and free bets in order to guarantee a profit.

Anyway, back to the original form…

All bookmakers are out to make a ridiculous amount of profit, and they offer odds under the market price (exchange price) to make a profit – this is called an overround. For example, if you convert all of the selections in a Premier League outright market into percentages, you will notice that it never adds up to 100%, it will always be under. It can vary, but a lot of bookies tend to price up their markets with an overround of around 115%, so they’ll always be making a 15% profit no matter what bets are placed.

The exchanges are where the decent prices are at as bookmakers only ever offer bad odds in comparison. This is where the software comes in – many bookies have their pricing automated by trading software so if one of their prices is out of sync with the rest of the market, it won’t be for long! We’re talking seconds rather than minutes, which makes it very difficult to pounce on arbing opportunities using just bookies. Betting exchanges like the ones mentioned above don’t care about the odds as they all work on a commission basis, so it’s by far the best way to go when arbing – find the arb with a bookie, use the exchange to guarantee a profit. If you do decide to use just bookmakers for arbing, then you’re probably going to get your account restricted or closed as there is no loyalty with a bookmaker, they are simply out to make a profit and arbers are just not welcome because they cost them money!

Arbing with a Bookmaker

An example of how arbitrage could be applied to a Tennis match with a bookmaker:

Roger Federer   Rafael Nadal       Market %

Odds with Bet365           1.300     3.930     102.4%

Odds with William Hill    1.420     2.900     104.9%

Arbitrage, betting on Federer with Bet365 and Nadal with William Hill:

1.420     3.930     95.9% (a 4.3% profit margin)

In this example, if we bet £100 on Federer at 1.42, you’d enjoy a £142 return if he wins the match. By then placing £36.13 on Nadal at 3.93, we would match (well, nearly at £141.99) the expected return of our Federer bet.

In total, we'd be staking £136.13 for a guaranteed return of £5.86 (141.99 minus our 136.13 stake).

Easy, isn’t it?

Calculating an Overround

If you’re not sure on how to calculate the overround margins, simply use the following equation:

(1/Decimal Odds option A) * 100 + (1/Decimal Odds option B) * 100 = Margin

Arbing on an Exchange

As mentioned, arbs with just bookmakers are few and far between today, so it’s worth getting to grips with an exchange to further boost your profits as there are no limits. So let’s explain the maths with another example, but this time using a bookie and an exchange.

Let’s say we’re backing West Ham to win the Premier League at 8.00 with a £10 bet (I know, I know, it’s just an example though). We’d expect to receive £80 if they win it, which is effectively a £70 win plus your stake back. Of course, if West Ham didn’t win we’d lose the bet wouldn’t we? That’s where the LAY bet on the exchange comes in.

What is a Lay bet I hear you ask?

On an exchange, a ‘Back’ bet is the same as a bet with a bookmaker, but a ‘Lay’ bet is betting AGAINST that certain selection, so West Ham will NOT win.

Right, back to it…

We’ve placed our bet at the bookies of 8.0, so we now go to the exchange where the prices are always better and place a £10 lay bet on West Ham at odds of 7.40. Our total liability here would be £64, which is essentially what we must pay if our lay bet loses. So, we’ve got a potential £80 win initially, then we use £10 of that to LAY West Ham, so that brings it down to £70. IF West Ham win the Premier League title, we will win £6 as our liability on the lay is £64 (£70-£64). With me so far? Of course, if West Ham fail to win, the lay bet of £10 would win here, which is the same amount as what we put on with the bookmaker, thus neither losing or winning any money – risk free! So essentially a free bet.

Profits and a Guaranteed Win

Nobody wants to put in all that effort just to win nothing and lose nothing as used in the example above, what’s the point? All wise arbers will adjust the lay stake to guarantee themselves some sort of profit. Please note that there are plenty of free calculators online that will help you work out the perfect lay stake for your arb – a simple google search and you’ll find them.

Using exactly the same West Ham example as above, here’s an example of the adjusted lay stake to guarantee a profit:

Bookmarker bet - £10 to win £80

Lay bet - £10.81 this time instead of £10 (so a liability of £69.18).

If bookie bet wins = £0.82

If lay bet wins = £0.81

It’s only a small profit in this example, but all you need to do to guarantee yourself more profit is adjust the stakes accordingly and repeat the process. Do this all day every day and the profits soon begin to stack up!

There you have it, you can now go an earn a profit by arbing! Any questions, just get in touch via our Twitter page @ProTipsterENG.