Arbitrage Betting Explained

by online betting
Updated: 25/08/2021 09:13

A Complete Guide to Arbitrage Betting

Arbitrage betting is one of the hottest trends in the industry right now. There is one big reason why this is the case: when done properly arbitrage betting can result in a guaranteed profit.

Usually, when it comes to gambling, the golden rule is that people should never bet more than they can afford to lose. But this does not necessarily have to be the case for arbitrage betting.

This is due to the way arbitrage betting works. People can take advantage of the difference in the odds offered by various bookmakers in order to lock in a guaranteed profit.

The good news is arbitrage betting does not even require any knowledge of the sport at all. What this means is that anyone can pick up arbitrage betting and start making money quickly.

For those who are brand new to arbitrage betting, here is our ultimate guide to how it works.

What Is Arbitrage Betting?

Most of the time, bookmakers are quite closely aligned with the odds that they offer.

When browsing a variety of bookmakers for a particular bet, there might be a small difference in the price but nothing that will stand out from the crowd as being particularly good or bad value.

However, sometimes there is a big difference in the prices offered, which creates an opportunity to bank a guaranteed profit through the method that is known as arbitrage betting.

In arbitrage betting, users essentially cover all of the possible outcomes of a sporting event. This means that in horse racing, for example, it does not matter which horse actually wins the race. Profit will be made as a result of the difference in the odds that were offered by bookmakers.

Arbitrage betting typically involves using a bookmaker and a betting exchange, so it is important to have a range of different accounts that can be used to place the necessary wagers.

Opportunities for arbitrage betting do not tend to last long. This is because bookmakers will rapidly spot when their prices are not in line with either rival bookies or betting exchanges.

What this means is that users who want to do arbitrage betting to lock in a guaranteed profit need to be alert, with their eyes open, at all times in order to spot a chance to win cash.

Some people have even been able to make a regular income through arbitrage wagers, which are a big part of how the practice known as matched betting works. Arbitrage wagers are typically known as an ‘arb’ for short, so look out for this term being used as well.

Next up, let’s take a look at how arbitrage betting works out for players in practice.

How it Works

Those who have never placed arbitrage bets may still be unsure about how this all works out. There are two main ways to calculate arbitrage bets: through software and through maths.

Most people will find arbitrage betting software to be the best way to get up and running. By entering the relevant odds into the system, it will automatically calculate the right stakes to use in order to secure the most guaranteed profit.

Working this out is also possible manually, but it requires a good head for numbers. A bad calculation can be costly in arbitrage betting, so software might prove to be a safer option.

At its most basic method, arbitrage betting can be used for football matches in competitions such as the Premier League. Let’s use the example of a Premier League game between Manchester United and Arsenal, which is taking place at Old Trafford.

For a big game like this, most bookmakers would likely be broadly in line with each other when it comes to the prices on offer for each of the three-match odds options: a win for Manchester United, a draw, or a win for Arsenal.

But perhaps one bookmaker has been tipped off that United are going to be without a key player due to injury. This could mean they decide to make Arsenal the favourites to win the game, whereas all of their rivals are still backing United to come out on top and claim the points.

While there is a difference in the betting odds for the game, this creates an opportunity for arbitrage betting. People with betting accounts would be able to bet on Arsenal as the favourites to win with the bookmaker who is out on their own, then cover the other options to make a profit.

The disadvantage of manually calculating arbitrage betting prices is that it can be quite slow. This means that the opportunity to lock in the most guarantees profit can be lost while the calculations are being made. It is for this reason that a lot of people instead prefer to use arbitrage betting software, due to the fact that the maths is all done automatically instead.

Essentially, software for arbitrage betting crawls the internet and tracks the changing prices for a wide range of sporting events. When a price changes, the software will know about it. This means the odds can be immediately compared to the other prices that are widely available.

Of course, there is a downside to using arbitrage betting software too. It might cost money in order to use the software, but most people will find that this cost can be balanced out as a result of the profits that can be earned through arbitrage betting overall.

Using betting exchanges is usually a popular way to get the most out of arbitrage betting. Let’s go deeper into how to do arbitrage betting with exchanges in the next part of our guide.

How to Do Arbitrage Betting With Exchanges

There are a few betting exchanges that can be used for arbitrage betting, but by far the most popular of this type of site is the Betfair Exchange. Smarkets is a commonly used alternative as well.

What this means is that anyone who plans to learn about how to do arbitrage betting with exchanges will likely need to make sure they have a Betfair account, as otherwise their opportunities to make a profit might become more limited.

When using a betting exchange for arbitrage wagers, users will need to understand about backing and laying. When backing a bet on an exchange like Betfair, this means betting that a certain event will happen. It is the same as a typical wager on a sports betting site.

Laying, though, is a bit more complicated. Essentially, laying is the opposite of backing. This means laying is betting against an event happening.

Let’s go back to our example earlier, of a Premier League game between Manchester United and Arsenal. Arbitrage betting for this match would mean betting on – or backing – one of the teams to win the game, then covering the other options by laying the same bet on an exchange.

It might sound complicated but after a short while, arbitrage betting can become second nature.

The good thing about using Betfair is that it has a sports betting site, as well as the exchange, which can make it even easier to spot any discrepancies in the odds offered on a game.

Another benefit of using an exchange for arbitrage betting is it clearly shows the potential profit and loss in real-time as the odds change. This can be particularly useful for those who are new to arbitrage betting who want to be able to see how quickly all the prices can be amended.

Betting exchanges also usually have better value odds than the bookmakers, meaning a bigger potential profit is up for grabs. This is because, on a betting exchange, users are gambling against each other rather than against a traditional bookmaker.

While a commission needs to be taken into account as betting exchanges take a cut of the winnings, this is typically a smaller amount than what is known as the bookmaker’s margin.

When calculating arbs it is crucial to include the commission as this will have an impact on the size of the bets that need to be placed to make the most guaranteed profit. Usually, there is a section for the commission percentage when using arbitrage betting software options.

Most people find it easier to learn how to do arbitrage betting with exchanges but the alternative is to do arbitrage betting without exchanges instead – so how does that work? Let’s have a look.

How to Do Arbitrage Betting Without Exchanges

Making money through arbitrage betting without exchanges is also possible, though for a lot of people utilising a site such as Betfair will be an easier route to guaranteed profits.

After all, betting exchanges are not available in every country in the world, so a lot of people will instead have to learn how to do arbitrage betting without exchanges instead.

Instead of backing and laying, arbitrage betting involves a process that is known as dutching. This works in a similar way, but users instead back on all of the available selections, ensuring that it does not matter what happens in the event, they are going to make a profit in the end.

Dutching is possible for a range of sports, but most people who take up arbitrage betting without exchanges will use it for either football or horse racing as these are two of the easiest options.

However, it is worth keeping in mind that the best arbs can often be available on minority sports. This is due to the fact the bookmakers will typically have less of expertise for these sports, which means they are not as accurate with their odds and prices as they are with elite sports.

When using arbitrage betting software, it is of vital importance to make sure all of the odds are entered correctly when dutching. If a mistake is made, this will put the ability of the wagers to pay out a guaranteed profit in serious jeopardy.

Spotting opportunities for arbs works in much the same way whether or not people are using an exchange. It is possible to do this manually, but it can take a lot of time and effort to keep track of the vast array of different sports and markets that are available to bet on these days.

Arbitrage Betting: Things to Keep in Mind

Gambling winnings are tax-free in the UK, which is one of the reasons why arbitrage betting is seeing such a big spike in popularity right now. Users who lock in guaranteed profit as a result of arbitrage betting on sport can keep 100 per cent of the cash that they earn in their pockets.

Keeping bookmaker accounts active is also crucial for anyone who wants to start arbitrage betting, either with or without an exchange. Using arbs is not illegal, but it might be against the terms and conditions of sports betting sites, who try to clamp down on the practice.

Bookies who suspect users of placing arbs can ban their accounts, which restricts the options for those trying to find opportunities for locking in guaranteed profit in the future.

A good way to avoid having accounts locked when placing arbs is to make them look as active as possible by placing some small regular bets as well. This will ensure that the account looks as normal as possible, rather than one that is being used to try to squeeze cash out of bookies.

Arbitrage FAQs

What is arbitrage betting?

Arbitrage betting refers to the practice of using discrepancies in odds to cover all of the possible options with bets, with the result being that this locks in a guaranteed profit.

Sometimes known as arbs, this type of bet is not against the law, though bookmakers do not approve of the practice for obvious reasons – it costs them money!

Arbitrage betting can be done with or without the use of a betting exchange such as Betfair, although this kind of site can make it quicker and easier.

Users may also find it helpful to make the most of arbitrage betting software, which will help them to calculate exactly how much money to place on each wager for the most profits.

How to find arbitrage bets?

Finding arbitrage bets is not always easy, with bookmakers working harder than ever before to restrict opportunities in this area. But it is still possible to lock in profits on a regular basis.

Some companies do this for you through a process known as matched betting. This often costs money, but the price of a subscription can be offset by the overall profits that are being made.

One of the best ways to learn how to find arbitrage bets is to use aggregator websites. These sites, of which Oddschecker is the most popular, collate all the prices from top bookmakers so they can be seen in the same place, making it a lot faster to spot opportunities for arbs.

Steven is the product manager on BettingLounge and is an experienced iGaming writer who has been working in the industry since 2018.


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