## Table of Contents

## What is Arbitrage Betting?

Arbitrage betting is a mathematical sports betting strategy often referred to as a foolproof method of making guaranteed profits by placing a bet on both sides of a betting market. In this article, we’ll look at how the arbitrage strategy claims to guarantee a profit no matter which team wins.

However, we’ll also be looking at whether arbitrage can really be considered risk-free and if there are some hidden risks you should be aware of?

Finally, we will break down how much money you can realistically make and if arbitrage betting is worth it?

## How does Arbitrage Betting Work?

Arbitrage betting involves **placing bets on all possible outcomes** of a betting market.

This means that no matter who wins the game one bet should always win and cover all the money lost on the losing bets.

We profit by taking advantage of discrepancies in the odds offered between two or more sportsbooks.

The business of sports betting is highly competitive and sportsbooks are regularly trying to offer better odds than their competitors. Sometimes this can create a discrepancy between the odds at different sportsbooks where the winnings from one bet would cover the losses made from betting on all other outcomes whilst still returning a profit.

These are called **arbitrage opportunities** or ‘**Arbs**‘ for short.

### Arbitrage Betting Example

A simple example of an arbitrage bet would be an NBA moneyline market for the game **Boston Celtics vs Brooklyn Nets**. This season these teams are fairly evenly matched.**BetMGM** is offering **+105** on **Boston Celtics** and -110 on Brooklyn Nets.**Ceasars** is offering -115 on Boston Celtics and **+105** on **Brooklyn** **Nets**.

If we bet $100 on Boston Celtics at +105 with BetMGM this means we’ll win $105 if Boston Celtics win the game.

If we bet $100 on Brooklyn Nets at +105 with Ceasars this means we’ll win $105 if Brooklyn Nets win the game.

Using the arbitrage strategy we would bet on the Boston Celtics at BetMGM whilst simultaneously betting on Brooklyn Nets with Ceasars.

This would guarantee yourself a profit of $5. As our winning bet will win $105 whilst our losing bet will only lose $100.

Now this example is the simplest arbitrage bet we’ll find in the sports betting markets. In most cases, we will have to bet different wager sizes on each team/outcome depending on the odds of each outcome.

If we have more than two potential outcomes (i.e. Soccer) it can get a little more complex, but we can use some simple maths to work out if a combination of odds are profitable.

### Arbitrage Betting Explained: Maths and Formula

Ok, so we now understand the basic concept of arbitrage betting and how odds discrepancies can create potential profit. Let’s get a little more technical and look at the mathematics of bookmaking followed by the mathematics of arbitrage betting.

How do sportsbooks make money? This is a common question that people ask about sportsbooks. I’ll give a quick explanation.

Sportsbooks make their money by applying a hidden fee to their odds. This ‘fee’ is called a vigorish or ‘Vig’ for short.

Sportsbook apply this vig by offering customers a lower payout than they mathematically should get from the true odds for the bet they won.

We can calculate this hidden fee by converting the odds of each potential team or outcome of a betting market to what’s called an implied probability.

**Negative Moneyline Odds**:

Implied Probability = Negative Moneyline odds / (Negative Moneyline odds + 100) * 100**Positive Moneyline Odds**:

Implied Probability = 100 / (Positive Moneyline odds + 100) * 100

Once we have converted all the odds to implied probabilities we just take the sum of all the probabilities. The Vig is the percentage probability is above 100% of the total implied probabilities.

This makes sense as there can only ever be a 100% chance that one of the outcomes will win. If the total of the implied probabilities is 105% then the vig for that market is 5%. The sportsbook will profit 5% of all the money wagered on the market.

Let’s go through an example. We have an MLB game of **New York Yankees vs. Boston Red Soxs** with Fanduel is offering a moneyline market with the following odds:

- New York Yankees: +120
- Boston Red Sox: -142

What is the Vig for this market? let’s convert these odds into implied probabilities:

**New York Yankees:**

Implied Probability = (100 / (Positive Moneyline odds + 100)) * 100

Implied Probability = (100 / (120 + 100)) * 100

Implied Probability = (100 / 220) * 100

Implied Probability = 0.45454545454 * 100

Implied Probability = 45.45%**Boston Red Sox:**Implied Probability = (Negative Moneyline odds / (Negative Moneyline odds + 100)) * 100

Implied Probability = (142 / (142 + 100)) * 100

Implied Probability = (142 / 242) * 100

Implied Probability = 0.5867768595 * 100

Implied Probability = 58.68%

The total implied probability for the market is 45.45% + 58.68% which equates to 104.13%. Meaning the **vig is 4.13**%

This means every $104.13 wagered on this market would return $100 to players making a $4.13 profit for the sportsbook

For example, If $45.45 is wagered on the New York Yankees at +120 and $58.68 is wagered on the Boston Red Sox at -142**If New York Yankees win the game:**

- The sportsbook collects $58.68 from losing bets on the Boston Red Sox.
- The sportsbook pays out $54.54 ( $45.45 x (+120/$100) ) for winning bets on New York Yankees.
- The sportsbook keeps $4.13-4.14

**If Boston Red Sox win the game:**

- The sportsbook collects $45.45 from losing bets on the New York Yankees.
- The sportsbook pays out $41.32 ( $58.68 x ($100/142) ) for winning bets on Boston Red Sox.
- The sportsbook keeps $4.13-4.14

As you can see no matter which team wins the online sportsbooks can guarantee profits.

Arbitrage betting uses the same concept. However, we want to **bet when the total implied probability of all outcomes is below 100%**. A sportsbook will never intentionally set their odds with an implied probability below 100% as this would lose them money.

However, we can find potential arbitrage betting opportunities where the total implied probability is below 100% by comparing odds between different online sportsbooks.

You can use an odds screen or an odds comparison site to find arbitrage bets for free or you can pay for arbitrage betting software to find these arbitrage opportunities for you.

Tip: If we’re looking for an arb in a betting market with only 2 options. As long as the positive odds for a team are larger than the negative odds for the opposing team then we have an arb!

You may be wondering how we can work out our bet sizes once we have found an arb. Well, we can calculate the stake we need for each betting outcome using the following formula:

- Bet Stake = (Overall Bet Stake * Implied Probability of Outcome) / Combined Implied Probability of All Outcomes

Alternatively, we can use an arbitrage bet calculator to calculate the required bet sizes.

Let’s calculate our bet sizes for an example arbitrage bet.

We find a discrepancy in the odds for the **Florida Panthers vs. St. Louis Blues NHL** game. Circa Sports is offering -164 on the Florida Panthers whilst Wynnbet is offering +168 on the St. Louis Blues creating an arb.

I have a bankroll of $1000 to place on this arb. Let’s work out how much I would need to place on each team and how much profit I would make.

First, let’s convert these odds into implied probabilities. You can use an odds converter to do this, but for the sake of this example, we’ll calculate both manually.

**Florida Panthers Implied Probability**:

Implied Probability = (Negative Moneyline odds / (Negative Moneyline odds + 100)) * 100

Implied Probability = (164 / (164 + 100)) * 100

Implied Probability = (164 / 264) * 100

Implied Probability = 0.62121212121 * 100

Implied Probability = 62.12%**St. Louis Blues Implied Probability**:

Implied Probability = 100 / (Positive Moneyline odds + 100) * 100

Implied Probability = 100 / (168 + 100) * 100

Implied Probability = 100 / (268) * 100

Implied Probability = 0.37313432835 * 100

Implied Probability = 37.31%

Now that we have the Implied Probabilities of both teams we can work out the bet sizes required to make the same profit regardless of the winning team. We’ll use the bet stake forumla for each team.

**Florida Panthers Bet Stake:**

Bet Stake = (Overall Bet Stake * Implied Probability of Outcome) / Combined Implied Probability of All Outcomes

Bet Stake = ($1000 * 62.12) / (62.12+37.31)

Bet Stake = ($62120) / (99.43)

Bet Stake = $624.76**St. Loius Blues Bet Stake:**

Bet Stake = (Overall Bet Stake * Implied Probability of Outcome) / Combined Implied Probability of All Outcomes

Bet Stake = ($1000 * 37.31) / (62.12+37.31)

Bet Stake = ($37310) / (99.43)

Bet Stake = $375.24

We now have everything we need to calculate our profit from the arbitrage bet. Let go ahead and do this.

**Florida Panthers Win:**

Profit = Florida Panthers Bet Winnings – St. Loius Blues Bet loss

Profit = ($624.76 * (100/164)) – $375.24

Profit = $380.95 – $375.24

Profit = $5.71**St. Louis Blues Win:**

Profit = St. Loius Blues Bet Winnings – Florida Panthers Bet Loss

Profit = ($375.24 * (168/100)) – $624.76

Profit = $630.40 – $624.76

Profit = $5.64

## Does Arbitrage Betting get you banned?

Does sports betting arbitrage provide unlimited risk-free profit for arbitrage bettors? Is this the holy grail of online money-making?

Sorry to burst a few bubbles but eventually you will get limited or banned from most sportsbooks that we call ‘Soft Books’ or ‘Retail Books’. These sportsbooks only want to take bets from a recreational bettor (Losing bettor).

Once they have determined that you are an arbitrage bettor they **WILL ban or limit your account**.

The reality of profitable sports betting is that you will eventually get limited from the ‘Soft Books’. However, we can still make very good money from these accounts before we get the chop. You should be looking to extend the lifetime of your soft book accounts to get the maximum profit from them before getting limited.

It’s not all doom and gloom. There are some sportsbooks that allow arbitrage bettors such as Circa Sports and Betting Exchanges such as Sporttrade, Prophet Exchange and Betfair. These are referred to as ‘Sharp Books’.

There are also strategies such as market making and value betting that you can do without the risk of limits.

Think of arbitrage betting as the first step in your sharp sports betting career. Use it to build a nice bankroll and get to grips with some basic sports betting concepts you’ll need for the future.

## How Much Can I Make From Arbitrage Betting?

There are several factors that will affect the amount you can earn from arbitrage betting

The biggest factor determining how much you can make depends on the country and state you live in.

If you’re based in a state with many different sportsbooks such as Colorado or New Jersey, then you’ll be able to make much more than someone in Delaware who has access to fewer sportsbooks.

Each arbitrage bet will make you a return of about 1-4% ROI. This might sound like a minimal profit. However, the beauty of arbitrage is that we can cycle through placing your whole bankroll in a few days or even in a single day. Rather than getting a couple % return each year in the stock market, arbitrage returns the same amount in a few days.

Due to this the compounding effect is through the roof for arbitrage. A realistic profit per month from arbitrage is $1000-2000. Although full-time sports bettors utilising arbitrage can return $15’000 per month. Alex Monahan of Oddsjam Profited $200’000 using arbitrage and positive ev betting in 2021.

## Are there any risks when Arbitrage Betting?

Sports betting arbitrage is often described as a risk-free foolproof method that guarantees a profit, but Is this a responsible way to describe arbitrage betting?

Although the strategy guarantees a profit when viewed through the lens of simple mathematical equations and probability theory. When you move from theory to the practical application in the real world some risks do a rise that you should be aware of. I’ve listed the most common below:

- Human Error:

This can come in the form of Typo’s when using an arb calculator or putting in the wrong dollar amounts when placing your bets with a sportsbook. Another common mistake is betting in the wrong market. For example betting in the full-time market for one team and then betting in the half time market for the other team. - House Rules:

Some sportsbooks have slightly different rules for handling unusual events in a sports game (for example retirements in tennis). This can mean one sportsbook will void your bet whilst the other sportsbook settles your opposing bet as a loser. - Platform Risk:

Another potential risk arises from a sportsbook website going down whilst you are trying to place your second bet. This will leave your initial bet exposed to losing. Another aspect to consider is that your bank may decline a deposit when you need to top up your account to place a bet.

Fortunately, most people that will fall foul of these situations are people that aren’t aware that these potential risks exist. Once you know that these situations are possible you can plan for them.

- Always have a spare funds sportsbook account.
- Deposit the required funds before placing any bets.
- Double-check your bets both before and after placing them.
- Familiarize yourself with different sportsbook rules
- Check arbitrage communities for house rules to be aware of

## Is Arbitrage Betting Legal?

Yes, arbitrage betting is completely legal. Even though some sportsbooks may not particularly like the practice or would rather they didn’t have arbitrage bettors on their website.

Taking advantage of arbitrage opportunities is fair game as we’re not manipulating or altering the odds, we’re simply taking the odds offered to us by the sportsbooks. If and when a sportsbook decides they no longer want to offer you their odds they can stop offering their service.

## How do I find Arbitrage Bets?

Now that we understand the basic theory behind arbitrage betting. We just need to learn how to find arbitrage betting opportunities.

You can find arbitrage bets for free using an odds comparison website or a free oddsscreen such as Unabated’s oddsscreen. This can be time-consuming and you will find less arbs with a lower profit margin. Ultimately, you’ll make less money

Alternatively, you can use an arbitrage finder tool that will find arbitrage bets 24/7 across all sports and bettting markets. There are a couple of websites that provide subscription services for their tools.

If you’re in the USA I would recommend Oddsjam. Their arbitrage tool has the widest coverage in the USA.

Their arbitrage tool is part of the Positive EV package which is $199 a month which can be pricey. However, they have a 7-day free trial to test out the software for yourself.

If you’re based in Europe or Australia I would recommend Rebelbetting. They’re the arbitrage software OG’s. They were the first arbitrage software on the web back some 20 years ago.

They have a free trail and a starter package at €99 per month. Their pro package is €199 per month.

## Is Arbitrage Betting Worth it?

Arbitrage Betting is often described as a risk-free method to make a guaranteed profit from sportsbooks. However, there are some risks to be aware of along with the reality that most of your sportsbook accounts will eventually get limited.

Despite this arbitrage betting is one of the most profitable side hustle and money-making methods on the web. Until every sportsbook in your country has politely (or not!) told you to get the hell out of their sportsbook. There is easy money on the table up for grabs!

If you want to get started with arbitrage I would recommend signing up to either the Oddsjam or RebelBetting Free Trials

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