Guide to Arbitrage Betting (April 2024)

Arbitrage is an advanced betting strategy where you place multiple bets on the same sporting event, but the bets are with different sportsbooks. The bets will only work if there are discrepancies between the odds of the bets, so you can place your multiple bets on the same game and whatever the outcome, ideally you will not suffer losses. It is not easy to find opportunities for arbitrage, but if you are up for hunting the betting markets and can make the necessary calculations, you can make arbitrage bets.

Betting Odds Explained

The key to making arbitrage bets is understanding how betting odds work. The simplest example is with a two-way game-winner bet. The sportsbook will generate odds for either team to win the game representing the chances of either team winning. There will always be a house edge, so if you take the ratio between the two odds and make bets on them with different stakes, you will not win. This is because the implied probability of the bets always adds up to over 100% and the surplus goes to the house.

Implied Probability (IP)

Betting odds can be displayed in three different ways: American, fractional, or decimal. To make the calculations easier, they will be displayed using decimal odds. Here is an example of a game between the New York Giants and the Philadelphia Eagles:

• NY Giants 2.05
• Philadelphia Eagles 1.8

If you take the ratio between the bets and calculate that for a $100 bet on the Giants you would need to place a $113.8 bet on the Eagles, you would win $205 or $204.84. This means you will be spending $2113.8 to win either $205 or $204.84. So where did the rest of the money go? Well, that is where the house has to make its profit. Using implied probability, you can calculate the house edge. When using the decimal odds format, the way to calculate the implied probability is to divide 1 by the odds and then multiply it by 100, simply put: (1 / odds) x 100:

• NY Giants 2.05, this has an implied probability of 48.78%
• Philadelphia Eagles 1.8, this has an implied probability of 55.55%

The probabilities add up to 104.33% which means that the house has an advantage of 4.33%. Of course, this is not an advantage against a single bet, but a general advantage that can turn a profit for the house after multiple bets. It also means that you cannot make any arbitrage bets using these two given bets.

Arbitrage Betting Maths

Each sportsbook will offer its own odds on the game, but these are usually extremely close and only marginally different. Some sportsbooks may favour one of the teams slightly more, and therefore the odds will be a bit different. To find an arbitrage betting opportunity, you will need to find a discrepancy in the odds that is large enough to make the combined implied probability of both odds fall under 100%. For example, using the bet from above, you may find a bet from another sportsbook that favours the Eagles even more:

First sportsbook:

• NY Giants 2.05
• Philadelphia Eagles 1.8

Second sportsbook:

• NY Giants 2.3
• Philadelphia Eagles 1.64

The first sportsbook has a house edge of 4.33%. The second sportsbook has a house edge of 4.45%. Both sportsbooks have house edges but you can take advantage of the large discrepancy between the odds to create an arbitrage bet. If you pick the second sportsbook's odds on the Giant and the first sportsbook's odds on the Eagles, you can make your bet. You will need to find the ratio between the bets first, as you cannot simply place $100 on each one. If you want to place $100 on the Giants at odds 2.3, then you will need to bet $127.77 on the Eagles at odds 1.8. This is taken by dividing the odds 1.8/2.3.

If the Giants win, your $100 will make $230. If the Eagles win, your $128 will make $230.4. In both cases, you will have spent $228 and so if the Giants win your profit will be $2. If the Eagles win your profit will be $0.40. In this case, you will root for the Giants, but if the Eagles win you will still make a small profit.

How to Find Bets

With arbitrage betting, you will realistically only make small profits. Of course, these can be multiplied but you would need to use far larger sums of money. In truth, you will probably have to do quite a bit of hunting to find odds that give you a chance to make arbitrage bets. You should look for two-way bets in which the odds have a difference that is at least 0.01 but preferably closer to 0.1 or higher. The next step is to make a quick calculation between the optimum odds for both chosen bets.

Remember, (1/odds)x100 to calculate the IP, and then add the odds. If they are lower than 100 then you can use them.

Conclusion

Arbitrage may not be popular among most punters but there is no denying that it guarantees a profit. The profits are quite lean, and the amount of time that is spent finding odds is tremendous. The difference between odds at each sportsbook is marginal. In fact, there may be some sportsbooks that offer two-way bets where both bets have shorter odds than other sportsbooks. Those sportsbooks have a larger house edge, shortening the odds on both bets to create a larger advantage.

If you want to use arbitrage betting, then you will need to be highly dedicated to finding the optimum bets. This may mean betting on sports you do not know. You should also be prepared to register accounts with different sportsbooks and to make sizable deposits into each one.

Two-way betting is always preferred, as it is far easier to calculate than using three-way bets.  Sports to look out for include NFL, basketball, tennis, table tennis, NHL, and all sorts of esports. Avoid sports where there are three or more possible outcomes such as football, racing, golf, and others.