Everything You Need To Know About Arbitrage Betting
Arbitrage betting, or ‘arbing’ for short, is something you may have heard mentioned in the gambling industry. Here, you can learn all about arb betting, what it is, how it works, whether it’s legal or not and the risks involved.
What Is Arb Betting?
Arbing is where you back and lay the same outcome on a sports event, exploiting any mathematical differences in the odds available. The margin between these is called an ‘arb’.
If done correctly, arbitrage betting guarantees you a profit regardless of whether the back or lay wager wins.
When arb betting, the back wager must be at higher odds than the lay.
You don’t even have to be knowledgeable about sports in order to become a successful arber. It is all about finding opportunities.
The wager where you back a sporting outcome should be placed on a regular fixed-odds bookmaker, either online through sportsbooks or offline at retail outlets.
When putting on the lay bet while arbing, however, you can only make this on a sports betting exchange.
Arbitrage betting is a borrowed term from the world of financial trading for buying and selling commodities in different markets. It has the same linguistic roots in French as arbiter, as in the Court of Arbitration for Sport.
Bettors engage with arbing because they cannot lose, even if the profit margin is small.
How Arb Betting Works
We’ve included some practical examples of arbitrage betting to help illustrate how it works.
In a hypothetical horse race in the UK, Red Rum is the 9/4 (3.25 in decimal odds) favorite with the bookmakers to win. That works out as £9 in profit for every £4 gambled.
On the exchanges, meanwhile, this horse can be laid at 15/8 (2.88), which means £15 profit for every £8 wagered.
You will probably have to pay commission on the lay wager when arbing. This is typically 2 percent, so also factor this into your calculations.
Backing Red Rum when betting £100 through a fixed odds bookmaker then requires a lay stake of £113.64.
Your exchange betting balance will need to be £213.64 to cover paying out to whoever matches you in the event he wins the race.
An arbing calculator helps you figure out how much you need to bet in order to guarantee profit. These are readily available online.
Should the back bet win, you make £225 of profit on that minus the £213.64 of losses from the exchanges.
If the lay wager is successful, then there is £227.28 in winnings, with the 2 percent commission to pay and losing fixed-odds bookmaker bet to deduct.
Either way, you make £11.36 of profit whether Red Rum wins the race or not. It’s all thanks to arbitrage betting done properly.
That isn’t a massive margin on its own but, if done several times a day, what you stand to gain soon adds up.
Another Arb Betting Example
Let’s now look at a football example of arbitrage betting. New England Patriots are at Tampa Bay Buccaneers in the NFL.
You back the Patriots at +175 for the win on the road with the bookies, staking $50. For every $4 bet, you receive $7 in profit.
At the same time, you can lay New England to lose at Tampa Bay at 2.63 (or +163 in American odds) on the exchanges. For every $8 gambled, there are $13 in winnings if successful.
Again, with 2 percent commission to pay on your exchange wager, a lay stake of $52.68 making sure your balance is $85.87 to cover the loss would be enough to guarantee $1.63 in profit either way through arb betting.
Just remember, you must subtract the losing wager – either the back or lay part of arbing – from your winnings.
If the back bet is successful, there is also commission costs to pay as well as settling the losing exchange wager with whoever matched your bet.
Arbing Is Legal But Risky
There are no laws against arb betting, so you can’t be prosecuted for doing it.
However, be aware that bookmakers do not take kindly to arb bettors.
This is because you are profiting from a pastime that is supposed to incur losses.
Any bettor who wins often, through fixed-odds wagers and/or sports exchange betting, has their gambling activities monitored by the bookies. If you’re caught arbing, then there will be consequences.
It’s important that you are aware of the risks involved.
Bettors can have their accounts with bookmakers restricted, such as limited maximum stakes, or even closed.
Arbitrage betting may even lead to you being blacklisted, so you can never bet on some sportsbooks again.
For some experienced bettors, the irony of bookies being upset by arbing isn’t lost on them. Successful gambling is all about placing wagers when the odds are in your favor.
Bookmakers and their traders are usually pretty good and sharp at shutting down value, especially when reacting to market support for certain outcomes.
Avoiding detection and being exposed as an arber is part of the process, so we’ve got some tips later on that can help you with your arb betting.
Popular Arbitrage Betting Events
Arbing is something you can do on any sport of your choice, but be warned.
The more niche or obscure the event that you back and lay outcomes on, then the more it will stand out to the bookies.
It makes more sense, then, if you keep arbitrage betting to the most popular gambling sports. We’re talking about soccer and horse racing.
These two more than any other attract huge volumes of bets worldwide, because of their global appeal.
With soccer, there are so many different markets offered by fixed-odds bookmakers that traders are up against in their bid to keep on top of the odds.
On the downside, the margins of guaranteed profit through arb betting are pretty small here. This is because in many markets there are only two or three possible outcomes.
Arbitrage betting is associated with horse racing more than any other sport, because of the multiple runners in races leading to a much wider variety of potential results.
Price fluctuations of the odds for horses is a lot more common too.
That naturally lends itself to arbing, especially if there are significant market moves that happen in the build-up to a race.
In order to help spot opportunities for arbitrage betting, there is software available to assist you.
Various providers have simple tools that crawl both fixed-odds sportsbooks and the betting exchanges, which identify where arbing is possible.
These are completely safe and legal to use.
Tips For Successful Arb Betting
As promised, we’ve got some helpful hints and advice for any budding arbers out there.
Just follow these tips when doing arbitrage betting and you’ll beat the bookies at their own game!
1. Place Your Back Arbing Wagers In Betting Shops
Offline retail betting may not be as quick or convenient as online gambling, but placing wagers over the counter gives you a certain anonymity.
While you can’t do lay arbing in a betting shop, there is nothing stopping you from putting the back bet on in person.
It makes it much more difficult for the bookies to track you down.
A key thing to remember with arbitrage betting that uses shop arbing (or ‘sharbing’ for short) is to keep your accounts separate.
Do not link your online accounts to retail.
If you link them, it’s much easier for bookmakers to see what you’re up to.
2. Avoid Large Stakes – They Look Suspicious
Arb betting can involve significant sums of money, both across the back and lay wagers, in order to make decent margins.
The trouble with that is, the bigger your stakes are, the more they will stand out to the bookies, especially if you normally bet on a smaller scale.
Everyone wants a big profit from their gambling, but with arbing you have to tread very carefully.
Little and often can also be flagged up, yet requires more investigation from bookmakers.
If you find an arbitrage betting opportunity on a major event like a soccer cup final or Group/Grade 1 horse race, where the volume of wagers will be high, that may be a better place to take a bigger punt than usual.
3. Use Multiple Betting Accounts
If you always bet with the same bookmaker, then it won’t be difficult for them to see if you’ve been arbing or not.
Staying loyal to the same sportsbook only gives you access to a small portion of the market.
Arbitrage betting is about getting best odds possible for the back bet, so to do that you may need to wager with other bookies.
Holding multiple accounts across different firms will make it even tougher for your bookmakers to know whether you are arb betting.
Like betting in person over the counter, this helps to obscure your activities.
4. Look Like A Mug Punter
One sure-fire way to cover your tracks from any arbing is to place mug bets.
That means deliberately lose some of the profits you’ve made through arbitrage betting.
Back your favorite football team or short-price favorites in horse races as an accumulator.
Make these losses discreet and subtle, so that you aren’t throwing too much away and bookmakers never suspect what you’re really up to.
The idea is to look like a mug – a naïve, inexperienced bettor reinvesting some of your winnings on wagers that don’t pay off.
When the bookies come to profile you, these losses will show up and confuse the situation. That way, your arb betting may go on for much longer undetected.
Final Thoughts On Arbitrage Betting
Arbing is a win-win situation for bettors until you’re rumbled by bookmakers.
You may then face sanctions, including account closure, so you must be prepared for the consequences of discovery.
The key to successful arbitrage betting is locating margins between backing and laying the same outcome in a sports event.
It’s completely legal to do so, but annoys the bookies.
Software can help you with arb betting and, although the margins may be modest, the lure of guaranteed profits is very attractive.
For more helpful guides, check out our post on prop betting.