Arbitrage Betting - also known as secure bets and arbing - is a technique where you place your bets in different bookmakers' houses and guarantee a safe profit by covering all possible results from a sporting event.
Arbitrage situations arise when betting sites have an alternative look at the odds of different possible outcomes from a given sporting event, which means they offer different odds. Arbitrage bets require you to find a situation where the rates in the different bookies vary to such extent that you can make a secure profit by betting on all possible outcomes at the different sites, no matter how the event develops.
Since bookmakers have their own commission (read how to calculate the bookmaker's commission - How do we calculatethe bookmaker percentage profit?), you will surely lose money if you bet on all possible bets at the same bookmaker. For example, if you bet at the same bookmaker house to win the home team, to win the away team and to draw in a football match, the bookmaker is sure to take your hard-earned money.
However, by comparing the odds for the same sporting event with the odds of other betting sites, you have a very real chance of finding a safe win.
For example, Bwin bets may offer 1.48 odds for the San Antonio Spurs (67.7% probability) against the Chicago Bulls in the NBA Championship, while Betsafe Review believes the team has an even better chance of success and gives them a 1.36 odds (73.5% probability). As a result, the odds for their opponent will also change, possibly to 2.75 (36.4%) and 3.25 (30.8%) in both bookmakers. Doing the right calculations, you may find that by betting on Spurs at Bwin and Bulls at Sportingbet you will find yourself in the green zone, no matter which team wins the match.
However, the differences in the odds of the different bookies are generally quite small, if any. This means that you have to place large sums of money in order to make serious money through arbitrage bets, as the average profit margin is between 1% and 10%. That is, with a $ 1,000 bet, the return can be as little as $ 10. Many people would point out that a lot of time invested in finding a safe bet is not worth the small prize. The good thing is that there are odds comparison websites (like Oddsportal) that help you find arbitrage situations. In addition, there are software programs and bots that also open up arbitrage opportunities, some of which are even free.
Here are some step-by-step guide to finding arbitrage situations:
- 1. Use a site to compare the odds and find a sporting event with two possible outcomes (an arbitrage situation may also occur in a market with three possible outcomes (for example, the 1X2 market in football), but with this things get complicated).
- 2. Find the highest odds available for each of the two possible outcomes.
- 3. Calculate whether the odds represent an arbitrage opportunity.
- 4. If yes, calculate the size of the two bets.
- 5. Place your bets
Here is a table that will give you guidance as to whether the odds seen can be arbitrary:
|
Outcome 1
|
Outcome 2
|
|---|---|
|
1.1
|
11.0
|
|
1.2
|
6.0
|
|
1.3
|
4.33
|
|
1.4
|
3.5
|
|
1.5
|
3.0
|
|
1.6
|
2.67
|
|
1.7
|
2.43
|
|
1.8
|
2.25
|
|
1.9
|
2.11
|
|
2.0
|
2.0
|
Let's say you found a tennis match between Andy Murray and Thomas Berdych for which you found 1.18 best odd for Andy Murray and 7.00 the best odd for Thomas Berdych.
You can use the following formula to calculate the arbitrage rate:
% Arbitrage = ((1 / Output Ratio A) x 100) + ((1 / Output Ratio B) x 100)
Andy Murray Victory: (1 / 1.18) x 100 = 84.746%
Winning for Thomas Berdych: (1 / 7.00) x 100 = 14.286%
84.75% + 14.29% = 99.032% (Arbitrage arises when the overall percentage is below 100%)
Once we have found a safe bet, we need to calculate the profit we will receive based on the money we are ready to invest. For example, if you want to place bets for $ 500 on this tennis match, you can calculate your winnings with the following formula:
Profit = (Investment /% Arbitrage) - Investment
($ 500 / 99.032%) - $ 500 = $ 4.89 net profit
The next step is to calculate how your investment is split between the two bets so that you get an equal return, regardless of the outcome.
Individual pledge = (Investment x individual arbitration rate) / total arbitrage rate
Bet on Andy Murray = ($500 x 84.746%) / 99.032% = $427.87
Bet for Thomas Berdych = ($500 x 14.286%) / 99.032% = $72.13
You already know that to make $ 4.89 a profit of $ 500 (just under 1% net profit), you have to place a bet of $ 427.87 on Murray at odds 1.18 and a bet of $ 72.13 on Thomas Berdych at 7.00 odds .
It seems like a lot of work and a lot of calculations for such a not so impressive profit, but the good news for players is that you can find many arbitrage calculators on the internet to do all the calculating work for you.
Disadvantages of arbitrage bets
While arbitrage bets are a great option for secure winnings without much effort and knowledge (and sometimes a much better return than that 1% in the example above), arbing also have its drawbacks to consider, before you decide to try it.
At first, bookmakers often change their odds at very short intervals. If the placing of the two bets is not synchronized well enough, one of the two bookmakers can change their bets and kill the arbitrage opportunity.
Second, while arbitrage is not illegal, bookmakers do not like this activity very much and may limit your account if you are suspected of doing so.
It is also nice to be very familiar with the rules of betting on different bookmakers, so that in one match, one bookmaker will cancel all bets and the other will settle them based on the outcome at the time of termination.
