Sports betting arbitrage

While some bettors love it, most sportsbooks try to eliminate it. Of course, we’re talking about sports betting arbitrage. It’s a controversial betting strategy that often has rival sportsbooks working in conjunction to make it stop. Read on to learn more about sports betting arbitrage, including what it means and how it’s calculated by sports bettors.

What is sports betting arbitrage?

Sports betting arbitrage is a betting strategy that guarantees a profit regardless of the outcome of a match, game or contest. Simply put, in a sport like Football, betting arbitrage (or arbing) is a way of betting on Team A to either win, lose or draw at odds that ensure an overall profit across all three bets regardless of the result.

How does sports betting arbitrage work?

It’s rare to be able to perform betting arbitrage using the same sportsbook. For sports betting arbitrage to work, there need to be specific odds across at least two sportsbooks for the same event. These odds also have to factor in every possible outcome (win, loss or draw), such as in a regular season Football (Soccer) match or both possible results (win or loss) like in a Tennis match.

Let’s consider the differing odds of a match-up between the favoured Daniil Medvedev and the underdog Grigor Dimitrov at Wimbledon below:

Sportsbook X: Daniil Medvedev 1.20 (-500) versus Grigor Dimitrov 4.70 (+370)

Sportsbook Y: Daniil Medvedev 1.29 (-345) versus Grigor Dimitrov 4.00 (+300).

The challenge for bettors is to quickly identify variations like these and work out if they can make a profit. So imagine a bettor called Jack wants to “arb” his bets using a €100 stake.

To do this, he’ll need to bet at the highest odds on Dimitrov to win (4.70) and wager at the highest odds on Medvedev to win (1.29).

An example of a betting arbitrage would be:

1 x €21.5 bet on Dimitrov @4.70 potentially returning €101.05

1 x €78.5 bet on Medvedev @1.29 potentially returning €101.27.

Either way, regardless of the outcome, Jack will make a profit of either €1.05 or €1.27. A dollar here or there might not seem like much but spread across multiple bets, sports betting arbing can be extremely lucrative.

However, sports betting arbitrage is more complex than betting at the highest odds on each outcome. For betting arbitrage to yield a guaranteed profit, bettors like Jack need to follow a tried-and-true formula.

How to calculate sports arbitrage bets

To calculate arbing opportunities, a bettor must calculate the implied probabilities of both or every outcome at their highest odds. So, in our Medvedev versus Dimitrov example, where no tie or draw is possible, they need to work out the probabilities of both players winning.

To do this, divide 1 by the decimal odds of each outcome.

Therefore:

Implied probability = 1 / decimal odds.

So for the highest odds on Dimitrov to win, that would be 1 / 4.70 = an implied probability of 0.212 or 21.2%.

For the highest odds on Medvedev to win, that would be 1 / 1.29 = an implied probability of 0.775 or 77.5%.

Secondly, add both implied probabilities together.

21.2 + 77.5 = 98.7%.

As a rule of thumb, any combined probability less than 100% represents an arbitrage opportunity. Additionally, any combined probabilities exceeding 100% does not.

That’s because, on the opposite side of the equation, sportsbooks guarantee a profit by ensuring that the total implied probability for conflicting bets adds up to more than 100%. To counter this, arbitrage bettors use several sportsbooks for each bet outcome to take advantage of the odds variations.

Let’s imagine that a second bettor called Jane calculates this betting arbitrage opportunity and wants to win roughly €20 on each potential outcome.

Now divide that €20 by each set of odds:

€20/4.70 = €4.25

€20/1.29 = €15.5

Added together gives a combined stake of €19.75.

So a €4.25 bet on Dimitrov winning at odds of 4.70 would potentially return €19.98, while a €15.5 bet on Medvedev to win at odds of 1.29 would potentially return approximately €20.

Again, regardless of the result, Jane would be guaranteed a profit of either €0.23 or €0.25. In real-life scenarios, however, arbitrage bettors usually make large bets to ensure a worthwhile profit, as the average percentage margin tends to be quite low.

How to spot sports betting arbitrage opportunities

Professional arbitrage sports bettors, or arbitrageurs as they’re in the finance world, are always on the lookout. While it’s possible to find arbitrage bets with the aid of computer software, some can be discovered with the naked eye. Some of the features of arbitrage sports betting opportunities include:

Simultaneously differing odds

An example of this would be the Cleveland Cavaliers against the Boston Celtics in an NBA game. On one sportsbook, the Cavaliers are 2.10 (+110) to win, while on another, the Celtics are also 2.10 (+110).

Although unlikely in reality, finding opposite odds like these would be ideal for sports betting arbitrage. That’s because a simple €10 bet on the Cavaliers at the first sportsbook and another €10 bet on the Celtics at the other sportsbook guarantees a dollar in profit.

Monitoring for betting odds movements

As mentioned above, finding favourable simultaneous betting odds across different sportsbooks is rare. Instead, many professional arbitrage bettors look for and predict odds movement to seek out arbitrage bets. But this is a complete shot in the dark. Despite this, many experienced bettors still arb their bets using this method.

Predicting odds or line movements usually involves second-guessing how the betting public will react to new information that could affect the game, such as team selection and weather updates.

Coinciding player props

Finding favourable player propositions (or props) is another method of arbing bets. Let’s consider an Over/Under 6.5 line on Jayson Tatum made three-pointers in our NBA match-up.

Say one sportsbook has the Over on Tatum made three-pointers at 2.25 (+125), and another sportsbook has the Under at 2.30 (+130). Again, a simple €10 wager on both the Over and Under at each sportsbook would return a guaranteed profit of either €2.50 or €2.30, respectively.

Is sports betting arbitrage legal?

Yes. Even though most sportsbooks want to remove betting arbitrage opportunities, it remains a legal betting strategy.

Essentially, “arbing” is simply placing bets with multiple sportsbooks which isn’t illegal. The only time that sports betting arbitrage might be illegal is if a certain country or territory prohibits online sports betting altogether.

How sportsbooks monitor for betting arbitrage

Like most betting strategies, arbing has become much more advanced. Rather than using multiple devices and tabs, experienced sports bettors harness technology like automation and machine learning to monitor sportsbook betting odds variations.

At the same time, sportsbooks like Wildz Sports work hard to close such gaps in odds, in an attempt to stop or limit arbing opportunities. But how do sports betting companies identify betting arbitrage opportunities?

Some of the ways of spotting betting arbitrage patterns include:

Frequent bonus abuse - spotting bettors that employ betting patterns like arbitrage that minimise risk while maximising the benefit of sign-up bonuses.

Unusual bet sizing - bettors usually bet in whole numbers. Wagers rooted in decimals such as €150.83 and €2,139.19 are sometimes a telltale sign that betting arbitrage is in play.

Strange betting patterns - wagers that don’t match typical users or past betting history can be a strong indication of arbing.

What can sportsbooks do if they discover sports betting arbitrage?

As mentioned previously, sports betting arbitrage isn’t illegal. However, it doesn’t mean that bettors can perform it unchallenged. The most common consequence of a sports betting arbitrageur is having their account limited, suspended or even closed by the sportsbooks in question.

According to most standard Terms and Conditions policies, sportsbooks are usually within their right to take such action. Despite this, there are still active methods of placing arbitrage bets, including collaborating with other bettors.