Arbitrage betting, also called arbing, is a concept that has been lifted straight from the stock markets where brokers buy low and sell high to book profits. Similarly, arbitrage entails buying assets in one market and selling it in another simultaneously to make a guaranteed profit. The point now is how this principle can be used in the betting sector.
Arbitrage betting is a process that covers all possible outcomes of a sporting event so that a profit is made regardless of the outcome. Bookmakers have different opinions and odds on the probable result of an event. The rise of betting exchanges has made it possible for people to bet both for and against an outcome, therefore ensuring profits and making arbitrage easy for the general public.
Simply put, you can bet on an exchange at a low price and another at a high price, thereby canceling out the possibility of an adverse result affecting your money. Since profit is assured, arbitrage betting is also called “sure bets” in Europe, but then a bettor must have a very good knowledge and expertise of arbitrage to succeed.
The Flip Side of Arbitrage
Even though, at first glance, arbitrage might look like assured profits and a golden gateway to making your millions, it is not always hunky-dory. Arbitrage betting requires substantial sums of money, but for almost 98% of arbitrage opportunities, the returns are about 1.2% only. Bookmakers in general frown upon this practice and can even cancel an arbitrage bet if detected. There are security concerns, too, as the betting sites are unreliable, with hackers and scammers tricking the bettors to part with confidential private information.
The rise of the Internet, betting exchanges, and odds-comparison websites have made arbitrage betting easier now for the masses, even though it has been prevalent since the beginnings of bookmaking. In recent times, a practice has emerged in Britain where arbitrage bettors employ other people who wager on their behalf. In this way, apart from escaping detection, key financiers can monitor odds and movement via computers to make money and track market movement.
Arbitrage is a complex process and requires unwavering dedication, much time, knowledge and experience, and very deep pockets.
Scope of Profit in Arbitrage Betting
Before going into the scope of profits in arbitrage, a look at how profit is generated will be in order. The most simple is placing bets on a bookmaker and then going for the same bet at an exchange. An arbitrage calculator can be used to estimate the amount to be bet on the exchange against the bookmaker to see the profit from the arb.
Now coming to the scope of profits in arbitrage betting, anybody needing a steady and consistent line of profit can use arbitrage. The pitfall here is that arbitrage is not a get-rich-quick scheme as many people think, and it is rare to find arbitrage opportunities with more than 5% in profits. For example, if you invest $100 and expect to earn $5, it is not common. The way out is not to invest big and earn big as prominent gamblers do (because that is not possible), but to place bets of small lots to earn small and reasonable profits.
You can opt to bet multiple times in one day, but the extent of returns is dependent on several factors, including the amount of your bets, the number of bets you place, the size of the arbs taken by you, and more. On average, though, let’s say you start with a betting arbitrage of $500 plus. It would be best if you made a profit of a few hundred dollars a month. But for this to happen, you should set up betting accounts with different bookmakers as you should not be using the same ones multiple times in a day.
Arbitrage betting opportunities might surface hundreds of times daily. Still, it will benefit you only if you have an account with the bookmaker for placing bets where you see the opportunity. At this juncture, you cannot afford to spend time signing up with that particular bookmaker as, by the time the process is completed, the arb would have disappeared. Also, bookmakers often change the odds when they realize that they haven’t reacted quickly enough to the movement of odds. However, this act is not relevant if they attempt to balance their books after having accepted large sums of money on one side of a bet.
The critical point of a successful arbitrage bet is to react and strike quickly at the first hint of an opportunity.
Risks Associated with Arbitrage Betting
Arbitrage bets are often claimed to be “risk-free,” but this is true only if a round of betting has been completed successfully. In reality, there are several risks in arbitrage betting.
- Arbitrage Disappearance – Generally, online sports betting has a life cycle of approximately 15 minutes, after which the odds differences attached to them disappear through betting activity. If not acted upon quickly in all the facets of arbitrage bets, they vanish and transform into conventional bets.
- Scammers – Arbitrage requires that a large number of accounts be opened with various bookmakers. In each of them, a lot of personal information has to be parted with – name, address, email, e-wallet and credit card information, and even a copy of a driver’s license and passport. Hence, arbitrage traders are always susceptible to hackers and scammers, and bettors’ details are quite at risk.
- Errors by an Arber – Due to the very high number of bets placed and the time constraints of seeing them through in rather hectic betting markets, it is normal to wrongly calculate the odds or place the bets on the incorrect legs of the arb. In such a situation, if there are inadequate funds in one of the accounts to complete the arb you will be locking in a loss. Even for the expert and professional Arbers, matching terms with all the bookmakers at any given point of time is not only complicated but prone to errors too.
- Reviewing Stakes – Some bookmakers do not accept large stakes by default in sports betting. Even if they do, the stakes accepted are reviewed manually. This can take some time, and in the meanwhile, the arbitrage bettor is left in the dark as to whether that particular leg of the bet has been accepted or not till it is too late to go through the bet.
- Discovery – All bookmakers do not welcome bet arbitrage, and different bookmakers sometimes come together to share common servers and software to find people suspected of arbitrage in betting. If arbitrage is detected in sports betting, bookmakers limit the stakes to make betting unprofitable and close accounts instead of honoring a bet. This is one reason why arbitrage bettors often use VPS and VPN services to escape detection.
- Cancelation of Bet – There is always a possibility of one or two bookmakers canceling a bet for reasons explained above. In that case, the bettor is at risk because the bet had been placed first, taking into account all the implied odds and risks. To minimize the risk, the bet can be placed again to make a profit regardless of the amount. Without the same odds, the bettor might even be forced to take a loss.
Professional arbitrage betting is fraught with risks, and it requires considerable time and energy and substantial funds to recover from losses due to the reasons mentioned above.
How to Avoid Getting Caught
It has been seen that arbitrage and sports betting are generally not encouraged by bookmakers or even a betting exchange. But the silver lining is that there is no foolproof way of catching the bettors. Hence you have a reasonable chance of indulging in arbitrage betting and getting away with it. Here are some suggestions that may help you.
- Bet to the Nearest Dollar – Arbitrage bettors often have to place bets in decimal amounts to maximize the possible outcomes. This might come under the scrutiny of the bookmakers, but to throw them off your tracks, round up your bets to the nearest dollar. This might reduce your profit marginally, but it will stop you from getting banned.
- Reduce Deposit and Withdrawal Frequency – Arbers who live off the profits from arbitrage have to make frequent deposits and withdrawals and even place large funds in the accounts to monetize their efforts. The frequency of transactions acts as a red flag and alerts the bookmakers. You will do well to reduce the number of transactions you make in the accounts.
- Bet on an Occasional Loss – By studying the type of bets made, bookmakers can identify arbitrage. If you are betting on profit opportunities only throughout, it sends out a bad signal, and you are more likely to get banned. You can make an occasional parlay sometimes to fool one or two bookmakers that you are a genuine bettor. However, do not intentionally put out many bad bets as you might end up losing a lot of money.
- Bet Through a Betting Exchange – As different from a bookmaker in sports betting, a betting exchange is a platform where gamblers can bet any which way they want to. An exchange will collect a small commission from you, but they do that to the losing side too. An exchange will not bother how you are gambling – whether it is arbitrage or a traditional wager. It will be safe to use two or more exchanges for arbing, or you can use one exchange and bookmaker for your bets.
- Spread Your Bets – Spread your bankroll across several betting sites, and you reduce the possibility of being identified as an Arber. But if two bookmakers and any suspicious activities are noticed, you will not be considered a recreational gambler and might face the ax.
Following these tips is no guarantee of not being caught in arbing, but it reduces the chances.
Disadvantages of Arbitrage Betting
Betting in any form is not a cakewalk, and there are always pros and cons to it. The same goes for arbitrage. Here are some of its disadvantages.
- Guarantee – Guarantee is a word that is frequently used in arbing to denote positive outcomes. But it is never a foolproof way to make a profit. You might place the bet successfully on the first leg only to be late for the second. There might even be a guaranteed loss when the second leg is taken into consideration.
- Low Profit – Profits from arbing are notoriously low and vary between 1 and 2 percent. Let’s say you bet $1000. You will profit only $10. If you want to earn serious money, this is not for you. Or you can bet big and be satisfied with a profit regardless of the amount.
- Complex – To get profitable outcomes, you have to have the professional expertise to find the right and precise arbing situation. This is not easy and getting the odds to bet on is complex even with the most advanced software.
- Account Closure – You have to be very careful if you want to take advantage of arbitrage. Bookmakers shun Arbers, and if you are caught, the odds are that your account will be closed. Luckily, no definite method has yet been created for detecting this form of gambling, so the odds of not being found are in your favor.
These are some of the typical problems that you might run into.
Does arbitrage betting work?
Yes, such betting does work though the margins are low even with the best odds. It functions similarly to the traditional stock markets. You bet on an exchange at a low price and take advantage of the odds of a different result at another exchange or a bookmaker to place a higher bet. Profits are assured, one reason why in Europe, arbitrage is called “safe bets.” But it is complicated, and you have to have the expertise to calculate the odds and book a profit.
How is arbitrage betting calculated?
The arbitrage process in betting in sports covers all the possible outcomes of an event. This ensures that profits are made regardless of the result. Bookmakers have different odds on the various results, and the bettor has to place multiple bets covering all of them. When the high odds are more than the lows, the Arber books profit.
What is the best arbitrage software?
You can either opt for paid software or free arbing software. The best among them are Rebelbetting, Bet Burger, OddsMonkey for basic arbing, and Bet Slayer. Some are for the professional level, and others are good for the beginners.
What is Arbing or Arbitrage Betting?
In Arbing, you bet on an exchange at a low price and place another bet on a different exchange or with a bookmaker at a higher price on another result. Hence, regardless of the event’s outcome, you gain profits because you have all the options covered.