# A Guide to Arbitrage Betting

The basic principle of **arbitrage betting** is a simple one. The

idea is to place a series of bets on all the possible outcomes

of an event, using a combination of odds and stakes that ensures

you are guaranteed to make a profit regardless of what the

actual outcome is.

You might think this is too good to be true, but arbitrage

betting is a real strategy that does work. In the right

circumstances it is entirely possible to make **guaranteed returns**

from your bets. It’s not quite as simple as it sounds though.

Many bettors have made the mistake of thinking that this betting

strategy is an easy route to untold riches, but the reality is

that it takes a lot of hard work and patience.

In this article we’ll explore arbitrage betting in more

detail. We’ll explain how it works and why it’s possible, and

also teach you all the calculations you will need to know when using this

strategy. We’ll also look at its advantages and disadvantages,

provide some tips and advice for using this strategy, and answer

some frequently asked questions about arbitrage betting.

It helps to understand the methods that bookmakers use to set their odds

before learning about arbitrage betting. If you’re not familiar with these,

or just want to refresh your memory, please read our article on how bookmakers make money.

## How Arbitrage Betting Works

As we’ve already explained, arbitrage betting involves

placing bets on all the possible outcomes of an event in order

to guarantee a profit. In a tennis match, for example, you would

place two bets – one on each player to win. In a soccer match

you would place three bets – one on each team to win plus one on

the draw.

You’re probably already aware that placing such bets with a

single bookmaker would actually guarantee a loss, not a profit.

This is because of the way that bookmakers set the odds to give

themselves a built in profit margin. For a simple example, let’s

imagine there was an upcoming tennis match where a bookmaker

thought both players had an equal chance of winning. They might

set the odds as follows.

Andy Murray v Roger Federer

1.91

1.91

A winning $100 bet at odds of 1.91 would return a total of

$191.00, including the initial $100 stake. So if you bet $100 on

each of the two players, you’d be wagering a total of $200 to

get a return of $191.00 regardless of who won. This would

represent a loss of $9.

Arbitrage betting is therefore not as simple as just betting

on all the possible outcomes of an event. If it was that easy,

everyone would be doing it and there wouldn’t be any bookmakers

in business. What you have to do is find opportunities where the

odds with different bookmakers make guaranteed profits a

possibility. Such opportunities are often referred to as **arbs**.

Using the same hypothetical tennis match as above, it’s

possible that another bookmaker would take a different view on

the likely outcome. They might make Murray the favorite to win,

and set their odds as follows.

Andy Murray v Roger Federer

1.70

2.20

This has created an arbitrage opportunity. We’ll show you

some calculations you can use to highlight when an arb exists

later, but please just take our word for it at this stage. You

could make a guaranteed profit by betting on Murray with

“Bookmaker A” and Federer with “Bookmaker B”.

It’s important to note at this stage that you have to work

out the optimal stakes when arbitrage betting. We’ll shortly

show you the necessary calculations for this too, but we’ll keep

it relatively simple for now and use some round figures. The two

bets you would want to make here are $107 on Murray at 1.91 and

$93 on Federer at 2.20, again for a total of $200 of wagered.

As you can see, you would make a profit here regardless of

which player wins. Although this is only a hypothetical example,

it should help you to understand just how arbitrage betting

works. We’ve already mentioned that similar opportunities do

occur for real, and we’ll now explain why.

## Why Arbitrage Betting Is Possible

Arbitrage betting is only possible when the right

circumstances present themselves. The odds available on sporting

events regularly vary from one bookmaker to another, but there

needs to be a **sufficient difference** for an arb to exist. Such a

difference will typically occur for one of the following two

reasons.

**Bookmakers taking differing views on the likely outcome of an**

event.**Bookmakers adjusting their odds to create a balanced book.**

The first reason is the one we referred to in our example

above. Bookmakers tend to set their **initial odds** based on their

views of what they think will happen in an event, so it is

perfectly possible that two bookmakers will set different odds

if they have different opinions about how an event is likely to

turn out. If their opinions are different enough that there is a

significant disparity in the odds that they offer, then an

arbitrage opportunity may well exist.

Although a bookmaker’s initial odds may reflect their views

about an event, they will subsequently **adjust those odds** based

on the wagers that they take. If they take a lot of wagers on

one particular outcome, they will almost certainly reduce the

odds on that outcome. At the same time they will increase the

odds on the other outcome (or outcomes). This helps them to

reduce their exposure to risk, and it can also lead to a notable

difference between the odds available at different bookmakers.

There are some other reasons why arbs occur, but the two

mentioned here are easily the most common.

## How To Find Arbs

One of the biggest challenges you will face when using an

arbitrage betting strategy is actually **finding the right
opportunities**. Although they do occur reasonably frequently,

they don’t usually last very long. There are lots of bettors

looking for them so they generally get spotted very quickly. As

soon as a few bets have been placed to take advantage of an arb,

the chances are that the odds will have changed enough for the

opportunity to no longer exist.

You have three primary options when it comes to finding arbs.

There are several websites that advertise arbitrage

opportunities as and when they appear, and some forums where

users can post them up when they identify them. Using such

websites and forums can be a relatively easy way to find arbs,

but there are some downsides.

Firstly, you won’t generally find the most lucrative arbs

this way. People tend to keep those to themselves. You also have

to be quick to take advantage of the ones that you do find. If

there are lots of other people using the same sites and forums,

and there usually are, then the opportunities are likely to

disappear quite quickly.

There is tracking software you can purchase that will find

arbs for you, and alert services you can subscribe to that will

automatically notify you of them. These are relatively easy

options, and very simple to use. You don’t have to do much work

yourself other than place the actual bets. They will cost you

money though, and you may suffer from the same problem of the

opportunities not lasting long.

You’re more likely to win on a slot machine by pulling the lever instead of pressing the spin button.

Also inaccurate. Most slots no longer have a lever on the side. Those that do, however, offer no advantage to the player who chooses it over the spin button. All the winning combinations are being generated internally by the RNG, so it doesn’t matter which method you decide to use.

## Calculations Required for Arbitrage Betting

There are two calculations you need to do when arbitrage

betting. The first calculation is simply for determining whether

an opportunity exists, while the second calculation is for

determining the size of the bets you should place. There is also

a third calculation you can use to work out what your overall

profit should be.

### Determining Whether an Arb Exists

Please note that this calculation is based on using decimal

odds. If you are working with odds in a different format you can

use our conversion tool to convert them into decimal format. To determine whether an arb exists or not you must first find

the best odds available on each of the possible outcomes of an

event. You must then apply the following calculation to each set

of odds, with the result expressed as a percentage figure. This

result for each set of odds is known as the **individual arbitrage
percentage**, or IAP.

Using the odds for the hypothetical tennis match we mentioned

earlier, the calculations would therefore be as follows.

You must then add those two IAPs together. Continuing with

the same example, the calculation would be as follows.

If the result is less than 100% then an arbitrage opportunity

exists. In this case we can see that an opportunity does exist,

as the result is 97.81%. This is referred to as the **total
arbitrage percentage**, or TAP.

The lower the percentage, the greater the potential profit.

Ideally you want to look for 98% or less, to make the profits

worthwhile, but technically anything below 100% is workable. Any

result of 100% or greater means that there is no arbitrage

opportunity.

### Calculating Bet Sizes

As we demonstrated in our earlier example, you have to get

the bet sizes right to make a profit when arbitrage betting. In

order to do this you have to use the following calculation,

where investment is the total sum that you are looking to stake

on the arb.

For our hypothetical match between Murray and Federer,

assuming an investment of $200, the calculations would look like

this.

$107.06

$92.94

Placing the two bets using these stakes should guarantee the

**same profit**, regardless of the outcome. Let’s see if that’s the

case.

There’s a very minor difference of a single cent, but this is

just due to issues with rounding numbers to two decimal places

during the calculations. The important thing to note here is

that you are **guaranteed to make a profit of at least $4.47 on
the match**.

### Calculating Profit

If you want to calculate your **expected profit** before placing

your wagers, you can use the following calculation.

Expected Profit

If we use the same figures as above, the calculation would be

as follows.

As you can see, this is the profit figure we demonstrated

above.

The arbitrage betting strategy clearly relies quite heavily

on math, but you don’t need to be a genius with numbers to make

it work. The calculations required are not particularly complex

and can easily be done on a calculator. It’s just a case of

learning them and knowing when and how to use them.

## Advantages & Disadvantages of Arbitrage Betting

There are two main advantages of the arbitrage betting

strategy. The first is simply the very fact that it is possible

to create situations where you are guaranteed to make a profit

on a sporting event regardless of the outcome. It could be

argued that this is not even gambling, as there is no risk

involved once you have created such a situation.

The second advantage is that it’s not really a difficult

strategy to implement. Once you understand the basic principle

of how it works, and the calculations involved, it is relatively

easy to take advantage of any arbs that you manage to find.

However, this strategy is not without its disadvantages. It

might be relatively easy to take advantage of arbs once you find

them, but finding them is not actually that easy at all. There

are lots of bettors out there looking for them, and they don’t

last forever. You need to be quick to spot them, and quick to

act. To make consistent and meaningful profits from arbitrage

betting you will almost certainly need to invest a lot of time

just constantly searching through the betting markets.

You also need to invest a lot of money too. Most arbs offer a

potential return of between 1% and 3% of the total amount

staked, and this means you need a large bankroll to make any

real money.

Let’s assume you were able to find two good arbs a day on

average, each with a return of 2%. You’d probably need to be

betting full time to achieve this, and you’d need to bet a total

of $5,000 on an arb to make $100 from it. That’s $10,000 across

the two opportunities, and you’d want a bankroll of **at least**

twice that amount. You’d be making $200 a day, but you’d

need a minimum bankroll of $20,000.

That’s a sizable sum of money, and realistically you’d need

even more than that. Another downside of arbitrage betting is

that you need to have accounts with a lot of different

bookmakers, and you need those accounts funded so that you can

place a bet quickly when a particular bookmaker has the right

odds that you need.

Arbitrage betting is NOT a completely risk free strategy!

It’s also important to note that there **are some risks
involved** in arbitrage betting. There is no risk once you have

placed the required bets, assuming you’ve done things properly,

but that doesn’t mean the strategy itself is entirely without

risk. There are several things that can go wrong, including the

following.

Taking advantage of an arb requires placing at least two bets

at different bookmakers, and it’s unlikely that you’ll be able

to place multiple bets simultaneously. There is always a chance

that the odds will change after you’ve placed your first bet and

before you’ve placed any subsequent bets, and this can result in

an arb effectively disappearing. This means you have to either

let the first bet run and take the associated risk with that, or

place the subsequent bets anyway and make a small guaranteed

loss.

You have to move quickly when arbitrage betting, and this can

lead to making mistakes. It’s quite possible to make an error

when carrying out the necessary calculations, or even when

placing the required bets. These kinds of mistakes can prove to

be quite costly.

Most bookmakers do not like arbers, and if they suspect you

of being one they may well limit your account or even close it.

With a limited account you may not be able to stake the full

amount you need to make an arb work, and with a closed account

you won’t be able to bet with that bookmaker at all. This can

severely affect your opportunities for arbing.

In some circumstances bookmakers can cancel bets once they

have been struck, and this can be disastrous for you when

arbing. You’ll get your stake back for the cancelled bet, but if

you’ve already placed other bets to take advantage of an arb

then you will be exposed to some risk of them losing without

having the other outcome(s) covered. You may be able to place

the cancelled bet again with another bookmaker, but you may not

get the required odds to recreate the arb.

## Arbitrage Betting – Our View

There is no doubt at all that arbitrage betting can be a

profitable sports betting strategy. It is not, however, one that

we can wholeheartedly recommend to everyone. The bankroll

requirements are high and so are the time requirements, and you

will be competing against a lot of well-organized betting

syndicates looking for the same opportunities as you.

We absolutely wouldn’t talk you out of using this strategy,

and if you happen to come across an arbitrage opportunity then

you should always try to take advantage of it. For most bettors,

though, we would suggest that it’s not worth spending too much

time actively looking for arbs. The same time could be better

spent on learning and developing other strategies that may be

more profitable in the long run.

## Tips & Advice for Arbitrage Betting

If you do decide to use the arbitrage betting strategy then

the following tips and advice will help you to maximize your

returns.

### Stick to events with two possible outcomes

Arbitrage betting gets a lot more complicated when you use

the strategy on events that have more than two possible

outcomes. You’ll miss out on some opportunities if you only look

at events that have just two possible outcomes, but you’ll make

things a lot easier for yourself.

### Find your own arbs

Finding arbs can be significantly less time consuming if you

use alert services, tracking software or arbitrage websites and

forums. There is always going to be lots of other people using

them too though, and this means that the arbs that they do

identify are going to disappear very quickly. If you have the

time to spend identifying your own opportunities then you will

probably make more money in the long run.

### Always check your calculations

Getting your calculations wrong is the easiest way to lose

money when arbitrage betting. Although you need to move quickly

when you have spotted an arb, taking an extra moment or two to

check your calculations will definitely prove to be time well

spent.

### Use a betting exchange were possible

Using betting exchanges can open up a lot more opportunities

for arbitrage betting, due to the fact that you can lay outcomes

as well as back them. Laying and backing makes the strategy a

little more complicated, but can be very profitable.

### Keep your betting accounts funded

You’ll need accounts with several bookmakers if you want to

make money out of arbitrage betting, and it’s a very good idea

to keep all your accounts funded. This way you’ll be able to

place any bets required as soon as you highlight an arb, without

having to spend time making deposits.

### Form an arbing team

There are a number of advantages to arbing as part of a team.

Collectively you will have more time to spend looking for arbs,

and also more money to maximize your potential profits. You will

benefit from having more betting accounts with bookmakers too,

as each member of the team can open accounts in their name. This

should help you to make accounts last longer before they are

limited or closed.

## Arbitrage Betting FAQ

### Is arbitrage betting legal?

In some parts of the world it is illegal to bet on sports,

which by extension would make arbitrage betting illegal. There

are no specific laws making arbitrage betting illegal though, so

if sports betting is legal where you live then so is arbing.

Bookmakers don’t like it, and take measures to prevent it, but

you’re not breaking the law.

### Why don’t bookmakers like arbers?

Bookmakers don’t like arbers because they represent bad

business for them. An arber will always lose a certain

percentage of his bets with a bookmaker, because of betting on

all the possible outcomes, but should make an overall profit in

the long run. The bookmakers are aware of this, and they don’t

want long term winners as customers. If they suspect a customer

of arbing they will limit their account or even close it in

order to protect their own profit margins.

### How much money do I need?

There is no fixed amount of money required to use the

arbitrage betting strategy. You can start with just a few

dollars if you want, or you can start with thousands. A bigger

bankroll will mean bigger potential profits, but please only

ever bet with money that you can afford to lose. Arbitrage

betting is a relatively safe way to bet when done properly, but

things can go wrong and you can still lose money.

### How much money can I make?

There is no way to accurately answer this question as it

depends on a number of factors. The size of your bankroll, the

number of arbs you can find, and the arbitrage percentage of

those arbs will all affect your overall profitability. As a

general rule you can expect to make returns of between 15% and

25% of your bankroll on a monthly basis, but this assumes that

you have the time and ability to find arbs on a reasonably

regular basis.

### What sports can I bet on?

Technically you can bet on any sports using this strategy,

but you’ll find the most arbs on sports where there are only two

possible outcomes. Our opinion is that tennis is the best sport

for arbitrage betting, but others may think differently. You can

find arbing opportunities on US football, darts, snooker,

basketball, and many other sports too.

### Can I arb from the United States?

Arbitrage betting is certainly possible from the United

States, but it’s more challenging than it is in many other parts

of the world. This is because US bettors are somewhat limited in

terms of the bookmakers that they have access to, and the

difference in odds between US friendly bookmakers is not

typically that great. This makes it a lot harder to find arbs,

but it’s by no means impossible.