Looking for a sure-fire bet? Arbitrage betting is exactly that.
Much like what we do here at Profit Rush, arbitrage betting is another way to secure a profit in betting. The downside being; you’re likely to get restricted quicker in some cases.
Restrictions depend entirely on what you’re doing though. In this article, we’re going to take you through arbitrage betting, start-to-finish without leaving any stone unturned…
What is Arbitrage Betting?
To start, let’s look at the basics because this is where most confusion arises.
The idea of arbitrage betting is to guarantee a profit by placing bets, at multiple sources, based on existing value. You have to do this across multiple outlets, such as bookmaker and exchange to exploit the value on offer, usually presented by the bookmaker.
With this in mind, you’ll only see results when the odds from the bookmaker are higher than the market price; ‘market price’ means the prices on exchanges and, sometimes, other bookmakers.
Typically, bookmakers make money by offering prices below the market value.
For example, if we were to look at a football match, the combined betting percentages will typically add up to around 115%. This percentage is known as the overround, the 15% extra is the margin that goes into the bookmakers pocket.
Now, arbitrage opportunities arise when one of their prices is below market value. Effectively you would be betting at one price and then selling it on cheaper. Keeping the profit (value) for yourself in the process.
When looking online, arbitrage opportunities usually disappear within a few minutes. As soon as the bookmaker spots the lower odds elsewhere, they’ll act to keep the money in their pocket. However, a sneaky way around this is to keep under the radar and matched bet instead, like we show users here at profit rush. See the education section here.
How Do YOU Arb?
Every single day, hundreds of arbitrage opportunities arise. You just need to know what to do with them…
Rather than try to explain, let’s just show you how it works, from the example screenshot below:
- Back bet (William Hill) £100 @ 7/4 (2.75)
- Lay bet (Betfair Exchange) £130 @ 2.06
That’s a pretty big price difference…
Software shown in the example is Geeks Toy for Betfair
The odds continued to tumble after our lay bet was matched too. A little bit of last value on our behalf.
So what did this mean?
If the selection should win, we would have won £175 with William Hill but lost £136 with Betfair Exchange. A total profit of £39.
If the selection should lose, we would have lost £100 with William Hill but won £130 with Betfair Exchange. A total profit of £30.
Cool eh? This is exactly how arbitrage works. We could have balanced it a little more if we were to use the Profit Rush calculator.
Can I Make Money With Arbing?
Despite the many positives, arbitrage opportunities aren’t exactly endless. Arbitrage betting strategy relies upon a misstep from the bookmaker. Unfortunately, you won’t find arbitrage opportunities every five minutes, so you’re limited by the mistakes made by the bookmakers.
On the plus side, tools like our price matcher will help you find potential arbitrage opportunities a lot quicker.
The ‘max bet’ limit some bookmakers impose can also be quite restrictive. Particularly when trying to guarantee a hefty profit. However, on the day of large events, with a new account, there’s nothing from stopping you from getting a £100-£200 bet away with no problems. Maximum bet limits are usually applied to accounts the bookmakers suspect are winning. You’ll need to be careful to prevent attention being drawn to your account.
If you’re betting big, we always recommend doing it on the day of the event. Placing very large stakes the day before, on a random horse race sticks out like a sore thumb. Considering the value of each bookmaker and exchange account is also something you’ll want to incorporate with your arbitrage betting strategy. In some cases it’s possible to get a value bet struck with a bookmaker, but then there isn’t enough liquidity on the exchange. A small problem, but still it can be frustrating.
If the liquidity is small in your chosen market, it’s not advisable to lay so much. If you can’t get the lay matched, the whole arbitrage strategy falls apart. Suddenly, you’re relying on one horse to win the race otherwise. This is not what arbing is all about. Check the bookmaker and exchange before placing any bets to prevent this from happening…
How to Find Arbitrage Bets:
Whenever this topic arises, we hear people say ‘it’s pointless because bookmakers don’t make mistakes’. Not true.
Bookmakers are actually a group of people like you and me, mistakes are regular for them. Typically, the bigger they are, the slower they are to move. The majority of their profits coming from huge events such as the Grand National and Premier League. It’s rare to find errors here so people who do this for a living tend to spend their time in the unusual markets.
Remember, it doesn’t have to be on an event winner. Over 2.5 Goals in some Dutch Second Division game is just as helpful. From our experience, it’s best to be there in the early stages of the market opening. One or two days before the event, the attention of the bookmaker isn’t always as sharp. Not like the final minutes anyway.
This being said, there’s an exception to this rule; fast-moving markets. Especially horse and greyhound races. If you’ve experienced a horse racing market, the last five minutes are the most important so you could find an arbitrage opportunity late.
Typically, in low-grade races bookmakers struggle to adjust their prices to the market.
To us, the biggest danger is not having enough time to back and lay before the race goes off. If you’re caught out, over a 5-furlong race, it could get messy. Whatever you do, don’t take an arbitrage bet in-play. It’s a recipe for disaster.
The legality of Arb Betting?
A common question posed; is arbitrage betting is illegal?
Since you’re not actually hacking the system, or manipulating odds for yourself, the process is 100% legal. This being said, all bookmakers reserve the right to close your account. At any time, and without giving much or a reason either. ‘Traders decision’ is the textbook line.
They know that smart bettors are capable of or beating them. So, in order to stop you from taking advantage, and emptying their pockets, they apply restrictions. It’s part of the game though, there’s no point in getting upset.
If you were to open several accounts (under different names) as seen commonly within matched betting, this is where the legality starts to come into question. It’s somewhat of a grey area, mainly because nobody has been prosecuted for it. But using accounts of friends and family to take advantage of free bets is frowned upon. The same applies to arbing under multiple aliases. We don’t doubt though, it’s just one way around the restriction problem for some. Regardless of who’s account you use, arbitrage betting isn’t illegal.
Arbitrage Betting Strategy:
To start, you’ll need to get in some practice. We recommend starting with small stakes until you get used to the process. There’s no point in losing money when you don’t have to.
Early days are all about learning how to spot the opportunities and react appropriately. To prevent digging deeper into a hole, we also recommend setting aside an amount you’re comfortable with losing. In the past, we’ve seen plenty of people bet without a limit. Until you’ve nailed it, it’s not a wise thing to do.
Assuming you have £1,000 to start, place around half in the betting exchange and £300 across a number of different bookmakers. From here, you have the remaining £200 sitting comfortably in case you need to deposit. This is a good idea as you never know if variance is going to side with the bookie or exchange. Many leave this out of their arbitrage betting strategy, then get stuck when they need to top up fast. Removing money from some accounts can take a few days.
The ideal arbitrage strategy is to spot volatile moves within the market, as or before they happen. Sticking to obscure betting markets are often the easiest to find these kinds of situations.
As the price tumbles you want to be ready, both back with the bookie and lay with the exchange. A little more advanced but, having a staking plan around the arb size is a good shout! Why? because the bigger the arb, the bigger your edge is. Thus, the more profit potential.
Keep Track of Your Progress…
Where are we going?
“I don’t know”.
…so how will you know when we’re there? Exactly our point.
Open a spreadsheet on your desktop and have every single arb listed so you see all progress over time. Although the information you include is up to you, we advise recording much as possible. If you’re a Profit Rush member there are some pre-prepared spreadsheets for you inside.
Furthermore, noting the bookmaker could be important too. You may even notice a trend. If a particular bookmaker makes mistakes within a common market, you’ll know to spend more of your time here. There’s rarely any value in ‘hoping for the best’. With all your results easily accessible, you’ll see how much money you’ve earned and where to improve.
Summary:
With this, it brings an end to our guide. You should have everything you need to get cracking with arbitrage betting for now. Moving forward, we’d recommend checking out the price matcher tool to make life easier. Additionally, as one last arbitrage betting tip; remember to stay away from the biggest betting markets. Arbitrage opportunities are rare, you’re likely to find easier arbs withing quieter, more obscure betting markets.
Thanks for reading, feel free to join the discussion on the community forum here.
