The Definitive Guide to Arbitrage Betting
Arbitrage betting, also known as arbing, is something taken from stock markets and retail. In these instances, arbitrage is the action of buying an asset in one market to sell it simultaneously in another market at a higher price.
The difference between the buying and selling price makes it possible to guarantee a profit.
So how can we use this financial concept to make money in the betting industry?
In this post, we’re going to teach you everything you need to know about arbing.
Table of Contents
What is arbitrage betting?
Arbitrage betting involves covering all results of a sporting event to make a profit regardless of its outcome. This is possible because bookmakers have different opinions (and therefore different odds) on the probability of an event. The invention of betting exchanges has allowed us to bet against outcomes, as well as for them, making arbitrage easy for the masses.
Put simply: with arbing, you bet on one site at a high price and you bet against that outcome on an exchange at a lower price.
It’s the ‘buy low, sell high’ of the sports betting world — and you know the guaranteed amount of profit you’re going to make before a match even kicks off.
Because arbitrage bets guarantee a profit, they’re often referred to as ‘sure bets’ — especially throughout Europe.
Sure bets require a higher level of knowledge than the average bettor possesses, but this information is possible to learn extremely quickly.
A discrepancy between odds offered between bookmakers and betting exchanges allows us to make an instant profit. This discrepancy is known as an arb.
Don’t worry if you didn’t completely understand the concept just yet.
I’m going to explain two techniques in this guide that you can use to leverage arbitrage betting. Things will become much more clear once you’ve seen the examples in action.
What is an arb?
An ‘arb’ is a term used to describe an arbitrage bet, primarily from a matched betting perspective. In matched betting, we look to never arb because it’s bad for your account health and will get you gubbed very quickly.
When the back odds are higher at the bookmaker than the lay odds are on the exchange, this is an arb. They show up in red on most oddsmatcher tools.
How much profit can you make via arbing?
Everyone looking for consistent and steady profits can use arbitrage.
However, you shouldn’t consider it a strategy to get rich quickly. In fact, it is not very common to find an arbitrage opportunity offering over 5% in profit.
For example, if you staked £100 and earned £5 in guaranteed profit, this would be quite rare. Arbs of this size also come with their own risks that we’ll look at a little later.
It’s very much a case of placing lots of smaller profit bets rather than trying to win big like most gamblers tend to do.
You can bet multiple times a day, but the amount of profit you can make will depend on your bankroll, how many bets you place, the size of the arbs you take and more.
Generally speaking, most people starting out with £500+ in their bankroll should make at least a few hundred in profit per month, but this is just a guideline.
You should set up betting accounts with as many bookmakers as possible. You’re rarely going to use the same bookmaker over and over on any given day — you’ll use a range.
Arbitrage opportunities are very common and crop up hundreds of times every day. However, it’s necessary to have an account with the relevant bookmaker to place the wager on the opportunity you found. If you need to spend time signing up after finding the arb, it probably won’t still be available by the time you’ve registered.
Arbs come and go very quickly.
As soon as bookmakers realise that they didn’t react quickly enough to odds movements, they change their odds — unless they’re intentionally trying to balance their book after taking too much money on one side of a bet.
A key principle of a successful arbitrage strategy is the ability to react quickly when an opportunity occurs.
Arbitrage via betting exchanges
We’re going to look at how to easily find arbs very shortly, but first let’s take a look at a simple example of how profit is generated.
We can use a simple arbitrage calculator — the same as a matched betting calculator — to work out how much we need to bet against (i.e. ‘lay’) our bookmaker bet and to see how much profit we will make from the arb, too.
Let’s say we’ve found a bet with odds of 2.06 on a bookmaker’s site, but the odds to bet against that team on the exchange are 2.0.
We can use our calculator to see exactly how much to lay against that team if we were betting, say, £100:
We can easily see that after betting £100 on the bookmaker site at 2.06, we need to lay £104.04 on the team on the exchange at 2.0.
We’ve shown the example using 2% commission at the exchange, but there are many 0% commission deals allowing you to make more profit than shown.
On the example, we’d make a guaranteed profit of £1.96.
If the bookmaker bet won, we’d win £106 at the bookmaker but we’d lose £104.04 on the exchange.
If the bookmaker bet lost, we’d lose £100 there but then win £104.04 (minus commission, leaving £101.96) at the exchange.
The odds differences and returns can be much greater than this example:
Tools to use
One of the main issues people foresee with arbitrage betting is that it would be time-consuming to find the right opportunities every day.
We’ve already mentioned them a couple of times for their calculator and dutching software, but the oddsmatcher from Oddsmonkey will be able to identify arbs for you virtually in real time.
Besides comparing odds from over 90 bookmakers and 4 betting exchanges, Oddsmonkey has many other features you can use to improve your betting experience.
Arbitrage without exchanges
Betting exchanges are not available in every country.
Fortunately, surebet opportunities between two bookmakers happen more frequently than people think. These can be used by all countries with bookmakers.
When using two (or more) bookmakers to hedge across, we call this ‘dutching’ — rather than ‘backing and laying’ when we have exchange access.
Using the same odds as before, we may find a tennis match where one player has odds of 2.06 and the opponent has odds of 2.0. (Please note: you must make sure the tennis retirement rules match up).
We can then use a dutching calculator to calculate the stakes and profit.
As shown in the image, if we bet £100 on the 2.0 selection, we can bet £97.09 on the selection at 2.06 and, regardless of who wins, we’ll make £2.91 (or £2.92 if it wins at the other bookmaker) in profit.
This doesn’t just have to be done with two selections.
In the world of football (soccer) we can find arbs to dutch across three separate bookmakers; one for each team to win and one for the draw.
This arb was found by Oddsmonkey’s dutching matcher, and we can see from its 101.62% rating that it should generate a profit of £1.62 from a total stake of £100 — a 100% rating would imply that £100 staked would return exactly £100.
Because the odds of each team are so far apart in this example, the return does vary ever-so-slightly depending on which site you win your bet at.
Here are the dutching calculations, this time shown using 3 selections and a £100 total stake (rather than a £100 stake on the first selection like in the tennis example):
As you can see from the profit column, depending on where you win, you’ll make somewhere between £1.51 and £1.63 in profit from your total investment of £100 (well, technically £99.99).
Because stakes with random pennies can look slightly suspicious, we have the option to round bets to the nearest pound — or to any rounding we wish. Here is the same example shown but with stakes rounded to the nearest 50p:
Rounded stakes make your bets look less suspicious but they do change the profit levels — whilst the EV is basically the same, you can see that we’d only break even if the high odds selection were to win now, though we would make higher amounts than before on the other two selections.
What’s the catch?
Things that seem too good to be true usually are, right?
Many people say that the catch with arbing is that opportunities to find profitable bets are rare. This is not true at all. Depending on the number of bookmakers you have an account with, chances to use arbitrage betting arise multiple times every single day.
When it comes to tax things are great too; gambling winnings are tax-free in the UK.
However, there is one risk when it comes to arbing:
Bookmakers don’t like it when you take advantage of them. The irony of this is quite astounding considering their whole model is based on them taking advantage of you.
If you arb too often, your account will likely see promotional restrictions, stake restrictions, or account closures.
You will be able to withdraw your balances and profits — they can not take these from you so don’t worry about that.
There are also things like minimum bet guarantees that will allow gubbed players to continue to arb with certain bookmakers, although with limitations.
The Difference Between Arbs & Price Boosts
Sometimes, locking in profit is possible when a bookie offers a price boost.
Here’s a real life example for you:
Currently, on SkyBet, a treble of Bournemouth, Crystal Palace and Man Utd all to win is boosted to 12.0.
However, on Smarkets, you can lay this off under their ‘acca’ section at 10.5, allowing you to guarantee yourself a small profit of around £2.30.
You might laugh about the small £2.30 figure, but it only takes a minute to get the bet on and lay it off on Smarkets.
SkyBet do a boost like this every week, meaning you could guarantee yourself an extra £130 a year just from doing these boosts.
By getting on many other offers and boosts, over £1,000 can be made each month from matched betting.
Because bookies know that they’re offering price boosts, you can do so with far less fear of repercussions, unless of course you completely abuse them and only ever do the price boosts and nothing else.
With arbs, bookies don’t know that they’re offering them — they just know after that you’ve done them.
Because they can’t stop you (like they can with price boosts) they are a real issue.
Price boosts are relatively good when used sensibly.
Arbs are really good for profit short-term, but they’re not good for the health of your accounts long-term.
How Does a Bookmaker Know You Are Arbing?
It is very simple for a bookmaker to identify arbers, but a lot of people don’t see the obvious ways that they can spot you.
Here are just two examples of how they can see that you’re arbing:
- Monitoring the SP (or Start Price) of a horse or team. If the odds you choose are regularly above the starting price odds, there’s a good chance you’re arbing. If you’re not arbing, then you know how to find value. In both scenarios, the bookmaker won’t like you.
- Monitoring exchange prices. We have a way to easily see what the odds are on a bookmaker and an exchange at any time — by using an oddsmatcher. The bookmakers have very similar tools of their own to track their odds versus the exchanges. Many bookmakers even set their odds to follow the exchange odds; a few ticks down, of course, so they can make a profit.
Next: Find out how to do arbitrage in person via our sharbing guide.
About the Author
This post was written by Luke Jordan. Luke is the founder of Beating Betting and has been teaching people about low risk betting strategies since the start of 2016.