Get 125% / $2,500 on 1st deposit!
New players only. Exclusive Welcome Bonus of up to $2,500
In the classic movie The Sting, two con men set up a sting operation to cash in on a fixed horse race. In their plan, they bet using the money from one betting syndicate against the other. This way they could profit from both winning and losing their bets. Essentially, they were taking an arbitrage bet.
An arbitrage bet is a gamble on the outcome of a future event. For example, a person can place an arbitrage bet on the winner of a horse race. However, an arbitrage bet can also be on any other future outcome such as a political election or sporting match result.
Arbitrage betting is essentially exploiting pricing inefficiencies in order to make money. By taking advantage of discrepancies in betting odds between bookmakers, anyone can make a profit through arbitrage betting. Although it requires some skill and knowledge, it’s another way to enjoy your favorite sports while making money. Arbitrage bets are also called sure bets because if you play it right you are guaranteed to make a return on investment. Popular forms of arbitrage betting are betting on the outcome of a match or which team will score first during a soccer match.
Arbitrage betting is exploitation of pricing inefficiencies by wagering on different outcomes of the same event with two or more bookmakers. This way, the gambler can profit from differences in odds offered by bookmakers. For example, if two bookmakers have different odds for particular outcome, the arbitrageur can exploit this to make money by placing bets with both bookmakers. Arbitrage betting is legal in many countries but requires strict licensing and monitoring. A person can also take an arbitrage bet online at a gambling site that offers these services. It also helps if you are using the best surebetting software that is available.
For a successful arbitrage bet you will have to find discrepancies in odds for all outcomes of a bet between bookmakers. You will then place multiple bets on the most favorable odds that these different outcomes of the event have. If done correctly you will make small profits. The best odds that you need to arbitrage can often be found on betting exchanges such as the Betfair exchange. Here you can compare odds and practice your arbitrage strategy. In arbitrage betting you select the best odds for each outcome of the market you bet on.
An arbitrage bet is all about spotting the right opportunity. In arbitrage betting you always look for different odds at multiple bookmakers.
It is important to note that sportsbooks are always looking to make a profit and their profit margin is included in the odds. Margins can range from 1.05 (105%) to 1.10 (110%) depending on where you place your bets. An opportunity for an arbitrage bet is there when the sportsbooks profit margin is below 100%.
To explain how to spot an arbitrage bet opportunity, let’s use the simple example of FIFA World Cup Semi Finals match between the Netherlands and Brazil with two outcomes, and Brazil as favorites to advance to the Finals.
As you can see in the above table, sportsbook A and sportsbook B are offering this market, but with varying odds. It looks like sportsbook A’s odds for a Netherlands win are quoted a bit high.
Once we have the odds lined up and picked the best odds, which are sportsbook A for a Netherlands win and Sportsbook B for a Brazil win, we calculate the profit margin for the bookmakers:
The profit margin for the bookmaker with these bets is: 1 / 2.62 + 1 / 1.68 = 0.9769 = 97.69%. However, for the bettor making this arbitrage bet, his or her profit margin is 1 / 0.09769 – 1 = 0.0236 = 2.36%.
If you are looking to spot an opportunity for an arbitrage, be sure to check out sportsbooks and see if there are some significantly different odds among them and start calculating your profit margin.
Although perhaps not as common as it used to, sportsbook can also completely misprice their odds and this is what you want to be capitalizing on. However, sportsbooks reserve the right to void any bets where there have been obvious pricing errors involved. This is something stated in their terms & conditions. Nevertheless, mispriced odds are not always caught.
A final spot to place an arbitrage bet is actually the use of a free bet. Free bets are offered upon signing up or making a deposit. Since you are not risking your own stake your profit margin when placing a bet on different outcomes in a match is guaranteed. Keep in mind that there are often wagering requirements associated with free bets.
An unwritten rule in sports betting is to have a handful of accounts at multiple betting sites, where you can compare and play the best odds on any market including first goal scorer. An excellent online bookmaker is award-winning Stake.com, which accepts regular currencies like EUR and USD, but also cryptocurrencies like Bitcoin or Ethereum. Another Crypto Sportsbook is Sportbet.ONE, where you get risk-free bet of $50 when registering which you can use for your first arbitrage bet! For a top US Bookie, sign up with BetUS.
Arbitrage betting is not illegal and there is not much that bookmakers can do other than making sure they have the right odds displayed at all times. Bookies do not catch arbitrage bets, however they reserve the right to void certain bets that were subject to obvious pricing errors, as stated in their terms & conditions. You will then get your stake back but be warned. Even though you will get your stake bet, it can very much hurt your arbitrage bet if the other bet is a losing bet.
If you are going to engage in arbitrage betting, make sure that you do not catch yourself making the mistake of miscalculating your profit margin.
Also, it helps to keep a tight administration of all your bets in an excel sheet for example, including profit margin calculation formulas ready at hand.
Arbitrage in trading is basically the same as in betting. It takes advantage of small differences of assets in markets. When doing an arbitrage trade, you buy the asset in one market while selling the asset in another market.
Arbitrage can be a good way to make money if you know what you’re doing.
When someone can make money from both winning and losing bets, these are sometimes called “hedge bets” since they protect against losses from other bets. Hedge bets are not to be confused with arbitrage bets as hedge bets can be made at one sportsbook and with bets on the same outcome or event. Arbitrage bets always involve multiple sportsbooks.
With this new information about arbitrage betting and knowing how to spot a great opportunity, go out and enjoy placing your bets. Remember to do it in a responsible way and to research the market before placing your bets.
At iGaming.org we recommend award-winning Stake.com, which accepts regular currencies like EUR and USD, but also cryptocurrencies like Bitcoin and Ethereum. Another Crypto Sportsbook is Sportbet.ONE, where you get risk-free bet of $50 when registering. For a top US Bookie, you can sign up with BetUS.