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Arbitrage

A graph showing a professional arber’s profit graph. This bettor took a higher risk approach of not laying bets and therefore not having to pay commission to the exchange.

What Is Arbitrage?

Sports arbitrage, also known as arbing, is a strategy used in betting where a player takes advantage of discrepancies in odds offered by different bookmakers to guarantee a profit. These discrepancies usually occur when a bookmaker is slow to update their odds, or, when they believe themselves that they have the correct odds for any given event.

The most common way to “arb” is to find a bookmaker that is offering higher odds on an event than the betting exchanges are. A player can then simply place a back bet and the corresponding lay bet to profit from the bet due to the price difference.

Sports arbitrage requires quick and precise calculations to identify and capitalize on the differing odds before they are corrected by the bookmakers. Most Matched Bettors will use a simple Matched Betting Calculator to help them profit from arbitrage bets.

Example

Bookmaker A has priced England to win their football match at odds of 1.5. Other websites however have this priced at 1.4, as do all of the Betting Exchanges.

If the player were to place a £50 back bet on England, they could hedge this on the exchange for £3.57 profit. They would do this by placing a £53.57 lay bet against England.

This is worked out using the Matched Betting Calculator (see calculation of profit below).

A £50 back bet on the bookmaker would return £75, netting £25 profit.

A £53.57 lay bet on the exchange at odds of 1.4 has a liability of £21.43. The liability is the player’s risk.
This means the player is essentially betting £21.43 of their own money to return £75, netting £53.57 profit if successful.

Here is the player’s position depending on the outcome.

England Win England Don’t Win (Lose OR draw)
Bookmaker +£25 Profit -£50 Loss
Betting Exchange -£21.43 Loss +£53.57 Profit
Overall Position  +£3.57 Profit +£3.57 Profit

How Much Can Arbing Make You?

Arbing doesn’t use any form of free bets or promotions from the bookmakers. For this reason, the amount of money that can be made from arbing is theoretically infinite. The exact amount any player can make will vary from person to person and depends on the following factors.

  1. Bankroll – how much money the player has available to bet with
  2. Account health – if the player has been restricted somewhat then this significantly reduces the amount that can be made
  3. Bookmaker limits – all bookmakers have a maximum bet on every market, regardless of who the customer is
  4. Time – how much time a player has to be able to put into arbing
  5. Software – if the player is using any software to aid them in arbing

Most arbs will have a %ROI of around 1-2%. This means that for every £100 you bet, you should return £101 or £102 on average. If you bet £1,000, you would expect to receive £10 or £20 back.

So if a player has a bankroll of £10,000 and manages to get 10 separate bets on of £1000, each with an ROI of 2%, they would expect to make £200 from these bets. If the same player was to repeat this every week day for a month (assuming 4 weeks), they would make £4,000 from the arbs in that month.

Using the £50 on England example from earlier in this article, you can see that the player bet a total of £71.43 and receive £3.57 profit. This is a 4.99% ROI which is on the higher end of arbing, however not uncommon. If this player had 10x their bet (Bet £500 on the bookmaker), then they would have bet a total of £714.30 and returned £35.70 from that.

There are many videos and articles about arbing online, with people claiming to have made huge sums of money[1] doing it.

Positives Of Arbing

  • Arbing is extremely popular in the Matched Betting community because it doesn’t involve the use of any promotions or free bets. Anybody with a bookmaker account and an exchange account can do arbing.
  • The profit from arbing is instant. You don’t have to wait for any free bets to be paid out – you profit instantly from the difference in prices and your money is paid out wherever the bet wins at the end of the event.
  • It is useful for gubbed accounts. When a bookmaker stops you from taking promotions, you can continue to arb them until your account becomes fully restricted.
  • There is lots of software for arbing. Paid Matched Betting services have various products for different sporting events to help players profit from arbing – and this is usually the key to keep people subscribed to their services.

Negatives Of Arbing

  • The majority of bookmakers are well aware of arbing and will heavily restrict people they believe to be doing it.
  • A palpable error can be put in place if the price difference is too big. Bookmakers usually have this in their terms and conditions, and it basically gives them the right to void any bet if the price they were offering is “erroneous” or wrong.
  • Retirement rules can vary from sport to sport. If you are arbing Tennis for example, money isn’t always safe as a player pulling out injured can cause one bet to lose and one to be void leaving the player out of pocket.

Sources/Credits

[1] https://www.youtube.com/watch?v=QoFwQPH9Tdk&ab_channel=ShaneHuang – A YouTube video from influencer Shane Huang