Arbitrage Betting Betting Term Meaning
Arbitrage betting on sports is the practice of placing simultaneous bets within a particular betting market on the possible outcomes of a match or event, at odds that will guarantee a profit regardless of the final result.
There are several other names arbitrage bets are known as; they include miraclebets, surebets, surewins or just arbs. In contrast to most forms of sports betting, arbitrage betting, or arbing, does not require any knowledge of the sport, teams or players involved. It is simply a mathematical equation using the bookmakers’ odds.
Arbitrage opportunities arise when two bookmakers have different opinions on what they believe will be the outcome of an event or when a market has been incorrectly marked up.
How to calculate an arbitrage betting opportunity
When a bookmaker prices a market, it totals the odds of all possible outcomes to more than 100%. This extra percentage is known as the bookmaker’s margin. That is the profit it will aim to make if the market has been priced correctly.
An arbitrage bet requires the combined odds to be less than 100%. When this is the case, the bettor (or arber as they are known) has the margin in their favour.
Arbitrage betting is most commonly used on markets that only have two possible outcomes such as the match winner in tennis, over/under goals in football and match result (incl. OT) in basketball.
To find arbitrage opportunities, you must first be able to calculate the margin of the market you want to bet on. This is the formula to use:
(1 ÷ decimal odds A) x 100 + (1 ÷ decimal odds B) x 100
Novak Djokovic (A) | Rafa Nadal (B) | Total Market % | |
---|---|---|---|
Odds at bookmaker 1 | 1.35 | 4.0 | 105% |
Novak Djokovic: (1 ÷ 1.25) x 100 = 80.00%Rafa Nadal: (1 ÷ 4.0) x 100 = 25.00%80.00% + 25.00% = 105%. The bookmaker’s margin is 5%
A second bookmaker has a difference of opinion. The odds it is offering on the same market are:
Novak Djokovic (A) | Rafa Nadal (B) | Total Market % | |
---|---|---|---|
Odds at bookmaker 2 | 1.60 | 2.5 | 102.50% |
Novak Djokovic: (1 ÷ 1.60) x 100 = 62.50%Rafa Nadal: (1 ÷ 2.5) x 100 = 40.00%62.50% + 40.00% = 102.50%
Between these two bookmakers, there is an arbitrage opportunity.
Back Novak Djokovic at bookmaker 2 | Back Rafa Nadal at bookmaker 1 | Total Market % |
---|---|---|
1.60 (62.5%) | 4.0 (25.0%) | 87.50% |
- Bet £100 on Djokovic to win at 1.60 = £160 return (if he wins)
- To find out the stake for Rafa: 160 ÷ odds; so 160 ÷ 4 = 40
- Bet £40 on Rafa to win at 4.0 = £160 return (if he wins)
- The total amount bet is £140. Our return, regardless of who wins, is £160. A profit of £20 from arbitrage betting.
Where to place arbitrage bets?
Arbitrage betting is completely legal. The bettor is not cheating in any way. He/She is simply taking advantage of odds variations in the market. That said, most traditional bookmakers take a dim view of it. They will likely limit or close your account if they suspect you are engaging in arbitrage betting.
Sports betting exchanges, on the other hand, earn money through commissions. These sites, such as Betfair, Smarkets and Betdaq, do not penalise punters for using this method of betting.
Today's Acca Tips
-
Soccer tips
-
Tennis tips