Arbitrage Betting Guide

Arbitrage betting is the most effective strategy to minimise the risk of loss when wagering on sports. When executed well, this enables you to guarantee a nominal profit from individual wagers and negate the typical pitfalls of sports betting.

But how exactly does arbitrage betting work, and how can you spot opportunities in the real-time market? We’ll cover all this and more in detail below while helping you calculate profits, assess the prevalent risks, and develop the most effective arbitrage betting strategies.

What Is Arbitrage Betting?

In simple terms, arbitrage betting involves placing wagers on opposing sides of the same sporting event. This betting strategy aims to cover as many potential outcomes as possible while wagering at odds that deliver a guaranteed profit.

There are two common iterations of arbitrage betting when accessing simultaneously available odds. The first will see you analyse the market and compare odds at different sportsbooks to identify optimal value and definitive opportunities for ‘arbing’.

You can also engage in ‘matched betting’, which requires you to lay a traditional back bet through an exchange at identical odds and cover all potential match outcomes. In this instance, you can guarantee a profit by utilising one or more free bets, a crucial distinction between match and traditional arbitrage betting.

Arbitrage betting is possible because of the discrepancies that can occur when sporting events are priced. Odds commonly vary from one sportsbook to another, especially when sites deploy daily or event-specific price boosts. It’s rare to find arbitrage opportunities when betting with a single sportsbook, but we’ll discuss this later in the guide.

Academic evidence suggests that arbitrage opportunities can be traced back to the 1980s. A study by Pope & Peel in 1989 highlighted several cases through the analysis of sports betting odds offered by four bookmakers. These were available on a pre-tax basis between 1980 and 1982 and focused primarily on football betting markets.

We will drill into the best techniques for identifying arbing opportunities in the next stage of the guide. First, let’s look at a practical example of arbitrage betting, using tennis as our preferred sport. Disciplines of this type are preferable, as they always deliver just two potential match outcomes and eliminate the draw as a viable possibility.

Let’s say that defending Wimbledon champion Carlos Alcaraz is drawn to play world number one Jannik Sinner in the tournament semi-final. In this case, three-time Grand Slam winner Alcaraz is the narrow favourite and priced at 3.00 to defeat the Italian, who can be backed at around 3.50.

You subsequently bet $100 on Alcaraz to win before reducing your unit bet to $80.89 when betting on Sinner. Here’s a breakdown of each bet and its potential returns:

• Bet $100 on Alcaraz to win at 3.00 – A potential return of $300 and profit of $200
• Bet $80.89 on Sinner to win at 3.50 – A potential return of $283.12 and profit of $202.23

Here, your total stake on the match is $180.89. However, the fixed odds and stake values guarantee a profit regardless of the outcome, ranging between $19.11 and $21.34. You can use a simple betting calculator to work out the prospective returns concerning your stake, and this process is crucial to your success.

For example, let’s say that you wagered $100 on both outcomes here. Although this would deliver a total profit of $50 in the case of a win for Sinner, you’d only break even if Alcaraz was to emerge victorious. 

While the sports betting odds remain unchanged in this scenario, the increase in your total stake offsets the lower profit margin for the first outcome. We’ll touch more on calculating unit bets and prospective profits later.

Finding Arbitrage Opportunities

When carrying out the odds comparison for a specific sporting event, you must gauge implied probability values. They can be easily calculated (especially when accessing decimal odds) while they tell you how likely each outcome is. There’s even a mathematical formula to help you calculate this:

(1/ decimal odds) * 100 = implied probability

So, let’s say that Greater Western Sydney were taking on Carlton in the AFL, with both teams priced at 2.00 to win. Using the equation above, these odds would imply a 50% probability of both sides winning at Sydney Olympic Park. However, it’s rare to find opposing outcomes with a combined implied probability of precisely 100%, as there’s usually a sportsbook profit margin built into the odds.

In this case, you’re more likely to see these sides priced at 1.90. Each betting line is reduced to account for a 5% sportsbook commission. As a result, there’s now a 52.63% probability of Greater Western Sydney or Carlton prevailing, creating a cumulative value that’s more than 100% (105.26%).

This is a crucial consideration, as arbing opportunities only exist when the total implied probability value is less than 100%. Otherwise, no combination of bets or stake values will guarantee a profit, regardless of the eventual outcome. This is also one of the several reasons arbitrage opportunities don’t usually exist at single sportsbooks. 

Of course, you can identify this type of opportunity by manually reviewing odds comparison sites and calculating implied probabilities. However, there are also examples of arbitrage betting software, which automatically scans a variety of bookmakers and uses a dedicated algorithm to compare and analyse odds. 

This information will be displayed in your feed if this identifies a significant deviation in odds (or potential arbitrage bets that fit your predetermined criteria). But what are the comparative advantages of manual and automated arbitrage betting systems, and how can they help you construct the ideal strategy?

Manual Arbitrage Betting	Automated Arbitrage Betting
Take full control of your strategy	Compare a broader range of odds
Guarantee the accuracy of betting lines	Use filters to help find optimal lines and pricing
You can find opportunities for free	Can better identify arbing opportunities in-play

Calculating Stakes and Profits 

As we’ve touched on, setting optimal stake amounts and calculating prospective profits is crucial to successful arbitrage betting. So, once you’ve identified an opportunity for earning, the next step is to calculate the potential profit you can receive based on the size of your bankroll. There’s a basic formula that can be used to represent this:

Profit = (Investment / Arbitrage %) – Investment

For example, let’s say that the defending AFL champions Collingwood are facing underdogs Essendon. The Magpies are priced at 1.18, with these odds implying an 84.746% probability of a home win. Conversely, you can get on Essendon at around 7.00, so they have just a 14.286% chance of defeating last season’s Grand Final victors. You have $500 to wager.

Using the formula above, your profit will be the sum of ($500 / 99.032%) – $500, equating to approximately $4.94. Next, you’ll need to determine how best to split your stake. It’s this that will guarantee a profit, and there’s an alternative formula that helps you regulate each unit bet:

Individual bets = (Investment x Individual Arbitrage %) / Total Arbitrage %

Using this formula and a simple betting calculator, you’ll arrive at the following unit bets for each wager:

• Collingwood Bet = ($500 x 84.746) / 99.032 = $427.87
• Essendon Bet = ($500 x 14.286%) / 99.032 = $72.13

If your wager on Collingwood comes in at odds of 1.18, you’ll bank $4.89 in pure profit. This will increase slightly if your $72.13 wager on Essendon comes in, as you’ll bank $4.91 and $504.91 in total. 

Although this may seem like a nominal return for such a significant sports betting stake, it should be noted that arbing typically relies on successfully executing a high volume of wagers over time.

Advanced Strategies

A successful arbitrage betting strategy can include numerous elements and systems. Each can be combined to help maintain multiple accounts and maximise profits, but what is the most effective and advanced strategy?

• Understand How Arbing Opportunities Occur: Arbitrage opportunities are prevalent in live betting markets, as sportsbooks may need to react more quickly to in-play events. By understanding how and where arbitrage opportunities occur, you can make better selections and significantly simplify the process of guaranteeing and maximising profits.
• Diversify Accounts Across Multiple Sportsbooks: Diversifying your activity across multiple sportsbook accounts offers two clear advantages. First, it makes it easier to analyse a broader selection of odds and identify optimal value. Second, it reduces the visibility of arbitrage activity to a single sportsbook, enabling you to avoid potential sanctions such as account suspension or closure. We’d also recommend mimicking recreational betting patterns as well as targeting arbitrage opportunities to create a varied and inconspicuous betting history!
• Manage Your Bankroll Well: Setting and managing a bankroll is hard enough, but it’s made even more challenging when funding multiple accounts. Ideally, you should avoid committing large sums to single accounts where possible and instead look to replenish your real money balances once you’ve identified arbing opportunities. It would be best if you also looked to boost individual bankrolls through free bets and bonuses, unlocking strategies such as matched betting.

Tools and Resources for Arbitrage Betting 

Numerous arbitrage betting tools and software are available, from basic calculators to advanced algorithms and programs. 

For example, you can leverage this basic and free-to-use tool when initially analysing and converting odds from one format to another. This website also reveals the implied probability value associated with specific odds, helping you quickly identify initial arbitrage opportunities.

Oddschecker is one of the best and most trusted resources for manually comparing odds across multiple sportsbooks. However, you’ll need to invest in dedicated arbitrage betting software to identify live opportunities or place a high volume of wagers to help optimise profits. But what are the best and most highly recommended pieces of software?

• BonusBank: One of the best arbitrage betting tools for beginners, BonusBank offers users a free trial and competitive pricing. This resource also compares pre-game and in-play odds across 18 Australian sportsbooks while benefiting from a slick and easy-to-use interface available in international markets. This interface is clutter-free, so you can quickly identify the key datasets you need. BonusBank also runs daily matched betting promotions, which are freely available and help to guarantee profits in specific markets.
• OddsJam: Unfortunately, BonusBank only offers limited filters and is focused solely on win markets. So, if you’re in the market for a more advanced tool, consider using the OddsJam arbitrage resource. This covers a broader selection of sportsbooks and disciplines and includes more diverse markets such as totals, spreads and props. Of course, you’ll pay a premium for this tool, with the so-called ‘Gold Plan’ costing $199 per month and including “middles” (low-risk and potentially high-yield wagers). 

Risks and Challenges of Arbitrage Betting

Most (but not all) sportsbooks will have a clear policy that outlaws arbitrage betting and the practice of covering multiple outcomes in a single sporting event. So, you must be prepared to face one or more bookmaker restrictions when arbing through a single site, including the following:

• Bet Limit Impositions: Initially, a bookie may look to limit the scope of your bets. More specifically, they’ll introduce a fixed betting limit that’s nominal and unsuited to arbitrage betting. 
• Cancelling Bets: In some cases, sportsbooks may also look to cancel bets that they think are part of an arbitrage strategy. In this instance, your unit bets will be refunded and returned to your balance.
• Account Closure: If bookies suspect that you’ve engaged in arbitrage betting on a large scale, they may close your account. This may be done without warning, while the funds in your account may either be refunded or voided (depending on the site’s precise T&Cs).

These sanctions explain why we recommended arbing across several sportsbooks, as this minimises your risk exposure and makes your arbing activity far less visible. When using multiple sportsbooks or betting exchanges to lay back wagers, you may also unlock free bets and bonus offers that maximise your profits over time. 

Remember that such promotional offers come with bespoke wagering requirements and timeframes that must be fulfilled. So, it’s essential to understand these and identify affordable bonuses that don’t require you to wager outside your means. This can dramatically undermine your bankroll management and the purpose of arbitrage betting.

Legal Considerations

Although most Aussie sportsbooks will take steps to prevent and crack down on arbitrage betting, this practice is permissible from a legal perspective. This is mainly because it seeks to target naturally occurring discrepancies in odds and prices while leveraging free bets made readily available by sportsbooks.

There are exceptions to this rule, but only in countries and jurisdictions where sports betting is illegal. These include North Korea, the United Arab Emirates, Singapore, Cambodia, and the state of Utah in the US. So, it would be best to familiarise yourself with the relevant local and national gambling laws in your jurisdiction before engaging in arbing.

Outside of these legal considerations, some have questioned the ethics behind arbitrage betting. However, the broader practice of arbitrage means buying something at a low price and selling it at a higher price. In sports betting terminology, it enables you to capitalise on pricing inefficiencies that occur by chance and not because of market manipulation.

Of course, compliance is an issue when arbing. You’ll have to review each bookmaker’s T&Cs before placing arbitrage bets, especially when using a single sportsbook. Otherwise, you’ll risk having your bets or account access cancelled over time.

Final Thoughts

Arbitrage betting remains a popular strategy among experienced gamblers, and it has the potential to guarantee at least nominal profits when executed well. However, you’ll first need to understand precisely how this works and why opportunities occur while comprehending how stakes and profits can be calculated.

To get started, check out some of the best sites on Betsquare. You’ll also find extensive blog resources, betting tips, and easy-to-use wagering calculators. Remember, you can also use the resources and strategies referenced above to engage in arbing successfully and make the most of your bankroll!