Arbitrage Betting in Sports
Excitement and profit. Two driving engines behind the betting industry’s success and popularity. Except excitement is short-lived without a profit. It is the possibility of winning itself that creates a sense of thrill, which is why smart bettors invest themselves in developing profit-oriented sports betting strategies. Arbitrage betting is one potentially gainful method of betting worth exploring.
What arbitrage betting is, how arbitrage betting works and examples of an arbitrage bet will be a few of the subjects covered in this quick-start guide.
Arbitrage Betting Definition
In the world of finance and investment, arbitrage is a dynamic strategy of buying and selling stocks, equities, currencies, or other financial assets to leverage price oscillations in different markets to make a profit. It is the same principle with arbitrage sports betting.
Plainly, arbitrage betting involves placing multiple bets on the same game or event in order to take advantage of odds shifts. In most cases, arbitrage bets are placed on different sportsbooks. This way, arbitrage bettors can avoid bumping into betting disputes with betting companies that prohibit this practice. We’ll expand more on the legal aspects of arbitrage betting later.
Arbitrage in sports betting is comparable to hedging. Hedging is a strategy that involves placing bets on different outcomes of the same event to lower the risk of losing. However, while hedging can often only counterbalance your initial bet and may reduce the risk of losing, arbitrage betting often results in a profit regardless of the outcome.
When I started out betting, I often found myself in situations where I couldn’t shake the feeling my single-outcome bet would lose. Especially when the probability of one or two other possible outcomes was high.
Thinking about how to reduce the risk of losing, I often thought: what if I staked money on the remaining outcome(s)?
Yes, I’d risk more money with one or two additional bets, but one outcome is guaranteed to win. So I thought, before learning the hard way, that this betting strategy, while viable, required far more groundwork and research. The idea here is to ensure that the amount of the payout of the winning outcome will top the cumulative amount of the two losing bets, leaving you with a small profit but a profit nonetheless.
To recap, arbitrage betting requires investing the right amount of money in two or more outcomes of the same event, usually on different betting exchanges. The variations of odds prices across betting companies will allow you to profit regardless of the outcome of the event. One or two bets are guaranteed to lose, and one will always win.
Arbitrage Betting Examples
It’s not unusual to find arbitrage betting a bit confusing if you’re a beginner. But nothing explains better than an example.
Bettors favor arbitrage betting because it offers a guaranteed profit. However, an arbitrage bet will guarantee a win but won’t necessarily guarantee a profit if you invest in unviable odds or miscalculate the bet sizes. Sports bettors must be extra careful to conduct precise estimates using an arbitrage calculator beforehand.
You can use a conventional calculator to estimate a profitable opportunity as well. However, an arbitrage betting calculator may be more helpful since it’s fine-tuned to compute this type of betting.
The method of betting can involve two or more bets, depending on the sport and betting market. For example, in hockey and tennis, you will place two bets on either team/player to win/lose. In basketball, a draw is one of the possible outcomes but is unlikely due to the number of points scored. In football, a draw is quite common and involves placing bets on either team to win, plus an additional bet on the game to finish tied. Arbitrage betting is also possible with other markets, such as point spread or totals.
Let us, for the sake of argument, take an imaginary football game with the following odds:
- Team 1 to win: 2.50
- Draw: 4.00
- Team 2 to win: 4.70
Normally, odds for a single sporting event would not be this close, but this is what arbitrage betting opportunities present: taking advantage of unexpectedly favorable odds. Note that the aforementioned odds would be available at three different sportsbooks.
If, for instance, you place $90 on Team 1 to win, $50 on a draw, and $45 on Team 2 to win, your total investment comes to $185. Regardless of which outcome wins, your payout will amount to over $185. It would be a minimal profit, but a profit no matter how the game ends.
Is it Possible to Arbitrage Your Bets?
The short answer is yes. However, arbitrage opportunities won’t come knocking on your door. You have to detect an opportunity by constantly monitoring odds prices at multiple sportsbooks. It can take hours of close research and patience before a gainful opportunity presents itself.
The betting lines often move between sportsbooks, and it’s quite common to see the odds shift at one or more betting sites. But even if a line moves across markets, it stays within about half a point difference, which is not enough for arbitrage bettors to rack up a profit.
One way to arbitrage your bets is to spot when different betting companies calculate the projected odds for a certain outcome differently. Another is to monitor the opening lines between multiple sportsbooks and act quickly before the lines are adjusted.
Here’s one example of a small odds discrepancy for the mid-season derby between Man. United and Aston Villa, where the odds for a draw and Aston Villa to win differ between Betway and Bet365.
Small odds inconsistencies can be seen in the moneyline market for Liverpool F.C. to win. But the difference is minimal – from 0.2 to 0.5 points – which is not enough for a profit. Having an arb calculator on hand will help you quickly estimate your potential winnings based on the size of your bets. This way, you can lock onto the given odds before they drop and avoid miscalculations to ensure a profit no matter the outcome.
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Some sportsbooks deliberately set higher odds to stay competitive. Others do so due to an unintentional error. Live odds tend to change multiple times during an event based on the probability of different outcomes, and sportsbooks can be slow to adjust them accordingly. This gives you a small window to lock onto the higher odds in order to achieve a profit.
Arbitrage Betting Legal Aspects
If you’re wondering if you can arbitrage bets from a legal standpoint, you ought to know the legality can vary based on your country’s laws. If online betting is legal in your region, you should check the arbitrage betting policy, if any, with the relevant regulator.
Generally speaking, you needn’t avoid arbitrage betting as the practice is rarely prohibited outright. But while there may be no legal implications, you may run into issues with your betting provider if you arbitrage your bets at one sportsbook.
As we noted, odds discrepancies occur due to miscalculations or untimely reactions of sportsbooks to adjust prices. Some bookmakers would deliberately raise the odds as a marketing tactic, but this is rare. This means betting companies can sustain financial loss from arbitrage betting and may penalize such activity.
To avoid such disputes, you should create multiple accounts at different betting sites and consistently monitor prices across multiple markets.