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What is arbitrage betting? An approach to punting that exploits differences in bookmaker odds for a certain profit. Learn how it can help your gambling balance in the long run through our team‘s complete guide.
What is Arbitrage Betting?
Arb betting is a staking strategy that requires you to place wagers on opposing outcomes with odds chosen so that their implicit probabilities sum up to less than 100%.
When using betting arbitrage, you essentially place wagers on all possible outcomes of (sporting) events. Tennis matches are especially desirable for players using the modern betting strategy. Thus, no matter the final result, you receive a guaranteed return. However, the secret behind profiting from betting arbitrage hinges on the odds discrepancy between different bookies.
Arb Betting Example
You fix your sights on a tennis game between Djokovic and Zverev. Once you browse the market, you find two betting exchanges with the following odds:
Compared Odds
| Events | Odds at Bookmaker 1 | Odds at Bookmaker 2 |
|---|---|---|
| Djokovic Wins | 1.450 (68.97%) | 1.303 (76.76%) |
| Zverev Wins | 2.750 (36.36%) | 3.951 (25.31%) |
| Total | 105.33% | 102.07% |
Now, you must decide on which bet to place at which exchange, as well as what value your stake should be.
Picked Odds for Arbitrage Betting
| Bets, Odds & Profit Margin | Odd Values |
|---|---|
| Djokovic Bet | 1.450 |
| Zverev Bet | 3.951 |
| Odds Total | 94.28% |
| Profit Margin | 5.72% |
The first staking odds of 1.450 translate to 68.97% true probability, while 3.951 amounts to 25.31%. The sum of the event probabilities is less than 100%. This fact signals that you can make a profit.
You Place the Bets
- If you place £100 on Djokovic at the first exchange (1.450), you receive a £145 payout.
- To complete the arbitrage betting algorithm, you match the payout with the other stake.
- Thus, you should bet around £36.7 on Zverev at the second exchange (3.951).
What Happened?
You staked £136.7 in total. No matter the result of the match, your payout will be £145. That translates to £8.3 in guaranteed profit.
The Idea Behind Arbitrage Betting
All sports bookies will have a house edge. The advantage will manifest as a small percentage over the 100% objective odds sum.
Fact
The probabilities of all outcomes of an event should amount to 100% when expressed in percentages. The house edge in sports punting manifests as the percentage that goes over 100%.
The advantage results both from the diverging opinions of online bookmakers regarding the odds, as well as the exchange’s effort to bring in a potential profit.
Important
Arb betting hinges on picking two exchanges whose complementary odds sum up to less than 100%.
In our example, we chose to stake on Djokovic at the first exchange. The odds translated to the 68.97% implied probability. We further chose to place the complementary bet on Zverev at the second exchange. Its implicit odds were 25.31%.
Thus, the odds amount to 94.28%. The 5.72% difference between it and the 100% objective probability total is your profit.
Fact
We presented the simplest type of the staking strategy: matched betting arbitrage. This version applies to events with two outcomes. Your objective is to match the two opposing stakes.
The End Goals of Arb Betting
- We wish to cover all outcomes of an event.
- The implicit odds of our multiple stakes should sum up to less than 100%.
- We then want to match the two bets.
How to Use Arbitrage Betting?
-
Browse the Punting Exchange Market
You should first start to scour the wide range of gambling sites, such as NZ online casino sites or online bookies, that provide sports punting activities to NZ customers.
See what events you can place stakes on. The best option for betting arbitrage is when bookies do not have a consensus regarding the odds.
The bigger the discrepancy between comparative odds, the higher your profit margin will be.
Be aware
You will be required to use several platforms for betting arbitrage. We urge you only to pick sites that hold a license from trusted authorities like the UKGC or MGA. Such accreditation will guarantee service fairness.
-
Pick the Event and the Odds
Find an event where the odd discrepancies between bookies are considerable. When choosing where to bet, consider that your implicit outcome probabilities should sum up to less than 100%.
You will need to convert staking odds into probability percentages and calculate the payouts and stake matches. Given the breadth of required computations, you may find that an arbitrage calculator comes in handy.
However, we will provide a cheat sheet to complete the required calculations.
30.9 = 100 * (1/x) → 0.309 = 1/x → x = 1/ 0.309
Arb Betting Cheat Sheet: From Odds to Percentages
| Odds Formulation | Conversion to Percentage Formula |
|---|---|
| Decimal | (1/Odds) × 100 |
| Fractional | 1/(1/Odds + 1 ) × 100 |
| American Positive | 100/(Odds + 100) × 100 |
| American Negative | –Odds/(–Odds + 100) × 100 |
Arb Betting Cheat Sheet: From Odds to Odds
| Convert from Axis to Column | Decimal | Fractional | American Pos. | American Neg. |
|---|---|---|---|---|
| Decimal | Equal | Odds – 1 | (Odds – 1) × 100 | –100/(Odds – 1) |
| Fractional | Odds + 1 | Equal | Odds × 100 | – 100/Odds |
| American Pos. | 1 + (Odds/100) | Odds/100 | Equal | –1/Odds |
| American Neg. | 1 – (100/Odds) | –Odds/100 | –1/Odds | Equal |
Betting Arbitrage Cheat Sheet: Examples
| Notable Percentages | Fractional | Decimal | American Pos. / Neg. |
|---|---|---|---|
| 100% | 0/1 | 1 | 100 |
| 80% | 1/4 | 1.25 | -400 |
| 75% | 333/1000 | 1.333 | -300.3003 |
| 66.667% | 1/2 | 1.5 | -200 |
| 50% | 1/1 | 2 | 100 |
| 25% | 3/1 | 4 | 300 |
| 10% | 9/1 | 10 | 900 |
| 1% | 99 | 100 | 9900 |
| 0.1% | 1000/1 | 1000 | 100000 |
-
Place Your Matching Bets
Choose one outcome and place a stake on it. For the sake of computational ease of betting arbitrage, choose a round value, like £100.
Follow up on your wager by calculating the total payout you may receive on a successful guess. Say you place a £100 stake on an outcome with 1.56 for decimal odds. Thus, you receive £156 in total on a successful run.
Tips
Decimal formulations will be the easiest to use when calculating the payout. You simply need to multiply your monetary stake by the decimal value. The result will not describe the profit but the payout, i.e., your initial wager plus the profit.
Match Betting Arbitrage
Arb betting will require you to match the resulting payout value of your original stake. This action is not equivalent to wagering the same amount of money on the other side.
Say, the opposite outcome decimal odds are 3.24. You must compute the correct stake to place so that the resulting payout is £156. The simplest way to calculate the correct value is by dividing the first payout by the second decimal odds: £156/3.24 ≈ £48.15.
The formula for Match Betting Arbitrage
You found a sporting event with two outcomes and the corresponding odds: Odds1 and Odds2. You place your Bet1 on the first outcome. To figure out the second stake amount, you can use a simple formula:
Bet2 = ( Odds1 × Bet1 )/Odds2
-
Sit Back and Wait of Arb Betting to Commence
As long as you chose the sports punting exchanges and calculated the complementary stakes correctly, arbitrage betting will work. You will cover your staked total, plus generate marginal profit.
Recap of Our Example
In the case of our second example, we have chosen the decimal odds to be 1.56 and 3.24. The probability percentages are 64.102% and 30.864%. The total sums up to 94.966%, leaving 5.034% as the profit margin. Thus, we have chosen our odds correctly.
Results of Our Example
A £100 stake on the first outcome would result in a £156 payout. We match it with a £48.15 wager on the second outcome. The corresponding payout would be a little over £156.
We used £148.15 for the best, while the guaranteed return will be £156. This fact translates to £7.85 in guaranteed net profits.
Profit Breakdown (£100 First Bet)
| Outcome Possibilities | Profit on Event 1 | Profit on Event 2 | Net Profit |
|---|---|---|---|
| Event 1 Occurs | +£56 | -£48.15 | +£7.85 |
| Event 2 Occurs | -£100 | +£107.85 | +£7.85 |
Arb Betting: Pros & Cons
You have learned what is arbitrage betting and how it produces marginal profits. We will provide an expert breakdown of pros and cons of betting arbitrage on the current NZ market.
Pro: Sports Betting Arbitrage Leads to Sure Profits
Several wagering practices are said to produce real money excess. The roulette martingale system is one such mathematically backed popular type of approach. The strategy applies to several table games, like blackjack and baccarat.
The main differentiating factor for arbitrage is that its effectiveness is not only theoretical. The approach does not require a virtually infinite bankroll, nor does it imply risking an exponentially increasing amount of real cash.
The practicality of arbitrage betting makes it a reasonable and sure way of attracting additional funds. When asking what is arbitrage betting, we can claim that it is not gambling as such but a system that utilises games of chance.
Con: But Arbitrage Betting Profits Come Slow
The derived profit margin is described by the discrepancies between type of odds offered by bookies and the added house edge for each exchange.
While these differences will appear on the NZ market, their breadth will not be wide enough for large and sudden profits.
Be aware
On average, you will be able to produce between 4% and 5% of your stake in profits for each of the betting arbitrage opportunities.
This fact turns arbitrage betting into an activity that requires incremental and maintained efforts to manifest into a viable punting strategy.
Arb Betting Tips for Balance Administration
Given that you will require to engage in several arb betting protocols, many times at once, over several platforms and exchanges, you will need to keep tabs on your stakes.
Consider devising a chart that contains all the arb betting related bets and corresponding amounts. The greatest risk with betting arbitrage is represented by placing erroneous punts and failing to cover your loss, let alone generate excess funds.
You should also consider utilising the wide array of mathematical tools available for free online for NZ gamblers.
Pro: You Do Not Risk Losing Funds with Arb Betting
Another edge that arbitrage sports betting has over systems like the blackjack double down procedure is that the system will always account for and cover any losses. You will lose a part of your punted funds every time, given that you place wagers on all possible event outcomes.
Nonetheless, the return on the rest of your wagers will cover your losses. When employed correctly, arb betting is not only viable but also risk-free profit system for the NZ punter.
Con: Arbitrage Sports Betting Can Be Time Consuming
Arb betting requires you to consult several punting services, open accounts and wager your money on each.
The research and effort presupposed by betting arbitrage turn it away from gambling as mere entertainment.
You will spend considerable time, especially before having a set routine or system.
Arb Betting Tips for Time Management
Considering that you have to consider several aspects for each exchange, you should use a database of NZ online casinos that also comes with independent reviews and specifications.
Once you have a portfolio of worthwhile platforms, you should start treating this strategy the same as any other monetary occupation.
Generate a routine and use devised charts to administrate your matched punts.
You will generate profits following each set of stakes. So, you should also find the instant withdrawal online casinos that will allow you to request and receive generated amount as soon as possible.
Pro: Sports Betting Arbitrage is Applicable
Once you manage to find a series of worthwhile platforms and generate a schema, you will be able to perform it without outlying issues.
There is no practical limitation on using the system. Arbitrage betting is not subject to stake limitations. The safety of the system also protects you from tapping out due to a series of unfortunate events.
It also falls within the bounds of NZ gambling legislation. Punting exchanges also have difficulty prohibiting the practice, as your activity will span across several platforms. You are not damaging any singular service enough for it to punish your arb betting.
The bottom line is that betting arbitrage is applicable, and many professional NZ profitable bettors use it for regular returns.
Con: Betting Arbitrage May Get You Gubbed
Gubbed is the act of a bookmaker limiting or closing your account following certain assured and arbitrage profit patterns.
Is arbitrage betting legal?
Although there are no legal grounds that would warrant your exclusion from a website, service operators will often reserve the right to close NZ accounts when suspecting the use of betting arbitrage.
However, you have one edge over bookies in this situation. Betting arbitrage is difficult to track since it uses the services of more sports punting exchanges.
When tracking your activity, each service will only observe you placing standard wagers on one of the outcomes.
Arb Betting Tips for Gubbing
- Read the terms for the services that you are using. If it does not specify any limitations on staking practices, you are safe.
- Suppose a website excludes you due to betting arbitrage without having the prohibition specified in its terms. In that case, you can appeal for an overturn to authoritative bodies, such as eCOGRA.
- Additionally, learn the rights and obligations of New Zealand’s gamblers, to know when the bookie that gubbed you is in the wrong.
- Pick platforms from different gambling operating companies. This approach will make it more difficult for site regulators to detect arbitrage betting users.
- Place mug bets to conceal your betting arbitrage. These wagers should not be costly, but you may want to place them constantly.
Fact
Mug bets refer to wagers that make your account resemble the activity of a standard punter. Their role is discouraging the bookie’s scrutiny upon examining your punting history.
Is It Worth It?
Arbitrage betting is one of the few practically viable approaches to gambling that is sure to return a small profit. While it will take you some time and attention, you will accrue funds at each set of placed stakes.
Important
The reminder, often sitting between 4% and 5%, represents your net profit. This case will only be true if you match your punt payouts.
Its biggest drawback is the risk of being gubbed by bookies. However, you can minimise detection chances by choosing sports punting exchanges from different operators and placing mug bets.
What’s your perspective?
This wagering approach has some interesting advantages but also some drawbacks. What’s your personal experience when applying this strategy? Go to the comment section below and tell us your experience!
