If you mention arbitrage betting to any bettor, it will likely create a commotion. In reality, arbitrage betting is much simpler than its origins in financial trading.
In sports, arbing is considered to be a risk-free way to make profits while betting. By using arbitrage, you can win every bet you place by wagering on all possible odds of an event. You can do it by using a mix of odds offered by different bookmakers.
Arbitrage betting is often considered as a secret and Holy Grail of sports betting.
Players can make huge profits and some take it as a full-time employment. Yes, it can be extremely profitable but it’s also a technique that requires a lot of time, patience, experience and discipline. Not to mention a healthy bank account and liquidity.
TeamAlpha is going to dissect the details of sports arbitrage betting and we will explore some of the common risks. Are you ready?
What Is Sports Arbitrage Betting?
Arbitrage betting is an activity where you can place simultaneous bets on all possible outcomes of the event. The first thing that comes to your mind is probably that placing random bets is almost a recipe for a disaster and loss.
But not if you use a mixture of different bookmakers and take an advantage of the difference in odds. This way you can make almost a guaranteed profit or at least a return on investment.
These bets are called miraclebets, surebets or arbs. The basic principle is to make a long-term profit without a risk.
As you can imagine, bookies are not the biggest fans of arbitrage betting. Which is understandable, as they want to achieve the highest profit. It’s still completely legal and doesn’t interfere with the bookmakers’ terms and conditions. Some bookmakers welcome arbitrage betting and partner up with particular software that helps you track the best odds.
A great example is RebelBetting that works with some of the biggest sportsbooks on the market and specialises in arbitrage betting. With a help from this kind of software, you can quickly check the appearing possibility of an arbitrage. It will also help you calculate how much you should stake on each outcome. So, all you have to do is agree to place the bet.
So, should you even bother if a bookmaker can block you? The answer is, yes. It’s true some bookmakers will block you but some take much longer, so you can use it while you can. Most importantly, there are bookies that will never limit you, eg. Bet365 or Pinnacle. You just have to know which one to pick.
The only exception is the US players who are limited to several bookmakers that allow players from States. Before you decide to make arbitraging a career, check the gaming legislation policy in your country!
How Does It Work?
The crucial part of arbitrage betting is placing bets with different bookmakers. This is the only way you will be able to choose the best odds for a particular event and compare them.
Arbitrage betting requires you to constantly compare the odds being offered at different bookmakers in order to find arbitrage opportunities on the market as they happen.
Then you have to quickly calculate the stakes to make a profit, and wager your bets before the opportunity vanishes. Long-term professionals even go as far as hiring people to track the odds on their behalf so they don’t risk missing out.
Most sporting events have two possible outcomes (tennis, sailing, etc.) or three possible outcomes, eg. football. The easiest way is to bet on the event with just two possible outcomes, and this is also an example we are going to show, based on Pinnacle and Bet365.
|Tennis Match||Novak Djokovic||Roger Federer|
|Outcome 1||Outcome 2||Profit|
This is just an example of a tennis match that could happen between Novak Djokovic and Roger Federer. Here, the difference in odds is much more significant than the one that could happen in real life.
The player has €1,000 in stake and wants to make a profit. If a player bets €472 on Djokovic with Pinnacle with odds @3.360, the person will win €1,585.92. Simultaneously, if a player bets €528 on Federer with Bet365, can also win €1584.
By correctly placed stake of €1,000, a player had a guaranteed profit of €584.90.
How Much Money Can You Make?
So, there is a common misconception that you can become a millionaire overnight from arbitrage betting. You would have to be very lucky to achieve that and we all know how far you can get with just luck.
Firstly, it depends on how much you are willing to invest. If you’re planning to take arbitrage betting seriously, you have to be prepared for a hefty expense at the beginning. It is recommended to open an account with, at least, 5 different bookmakers.
Just by doing that, you will broaden the spectrum of possible arbs. You can also multiply your deposit by collecting bookmakers’ bonuses. Needless to say, the more you deposit, the more you will gain with a bonus.
A good starting amount would be approximately €3,000 and you can get away with such a small amount thanks to the sign-up bonuses. Experts recommend even up to €10,000 at the beginning, so you can cover all the major sportsbooks and ensure the constant cash flow.
In terms of profit, here it gets more difficult. Experienced arb traders can make up to an average of about 10% of their trading capital per month. It can vary depending on your skills, experience, time, and money you have to spend.
Some traders were able to make arbing their full-time job, but I definitely wouldn’t suggest it to anybody who’s just starting.
What Are The Risks?
There’s a common misconception that arbitrage trading is completely risk-free. Betting can be as risky as money trading or investment banking. And, arbing is no different.
The most important lesson for rookies is to start with small stakes. This way, you can learn from your mistakes and prepare for any possible risks.
Here are some of the common risks you might encounter:
- The disappearance of arbitrage – the lifetime of an arbitrage is approximately 15 minutes, afterwards, it vanishes. Unless it’s a high-street bookmaker, whose odds will be around for few hours, you have to hurry up. It might sound odd in 2017, but you need a fast internet connection that won’t disconnect. This and a mobile app can speed up the process and will limit the possibility of losing an arb.
- Placing the wrong bet – just like trading money on the financial market, you can make a wrong move in arbing. Imagine placing a large amount of money on a particular bet, just to realise you calculated the odds and the stake in a wrong way. You can lose a large amount of money. Rushing can lead to potential mistakes for which you would have to pay.
- Betting odds change – a bookmaker has a right to change the odds as well as cancel them if they were wrong. This can happen in a span of few seconds, so you have to be carefully tracking them across different bookmakers.
Is Sports Arbitrage Betting For Me?
Let’s put it this way – there’s no harm in trying. If you’re a complete rookie, at the beginning of your sports betting journey, take some time to familiarise yourself with the market before you jump ship.
Once you settle in sports betting, pick one that you’re the most comfortable with and take it from there. There isn't one good recipe for everyone and each trader could tell you their own story.
Your intentions are one of the most crucial factors in arbing success, don’t hope to make an ample amount of money in a week. Try it and slowly explore different possibilities and risks.
That way you’re less likely to make a mistake and you’ll make sure you’re ready for a bigger investment.
Remember, sports betting arbitrage is just like trading money. So, think, would you jump into in without taking a learning curve first?
Let us know if you feel convinced and if you’re willing to try arbing yourself. Don’t forget to sign up to our newsletter, so you don’t miss out on any major sporting events and free guides!