Arbitrage betting (“Arb” betting) is a system for exploiting differentials in odds for a specific market at two or more bookmakers. It guarantees the bettor a profit, as the combined odds produce a negative margin – a margin in the bettor’s favour. This can occur when bookmakers make mistakes, but generally results from differences in opinion or variations in margins that produce a wide spectrum of odds.
Arb situations commonly occur because bookmakers differ in opinion on a particular market. This increasingly happens with more obscure events, where the variation in margins offered across a range of bookmakers is greater.
An Arbitrage Betting Example
The best way to illustrate Arbitrage betting is through a simple example. Take the odds on a tennis match between Player A and Player B offered by two hypothetical bookmakers. The market percentage is indicated for each bookmaker i.e. the edge in their favour. By cross-matching the odds from Outcome 1 at Bookmaker A with Outcome 2 at Bookmaker B, the market percentage turns in the bettors’ favour providing a guaranteed return of 4.1% (100-95.9=4.1). This principal can apply to any betting market, beyond just two selections, including spread betting, while it has wide application in live betting where Arbitrage opportunities are constantly available by Backing and Laying in a constantly shifting market. You can also arb free bonuses to lock in a guaranteed profit, but the conditions that apply are restrictive.
Arbitrage Betting – The Potential Pitfalls
As with any scheme that promises great riches for no risk, there is some small print. Watch out for these situations:
Stake Limitation and Account Closure
Limits vary at different bookmakers, which may hinder your ability to properly exploit an arb. Some bookmakers also close accounts of consistently winning players.
Where a mistake has been made, bookmakers are at liberty to retrospectively cancel a bet, leaving you fully exposed on the other side(s). This can easily wipe out all of your small profits accrued over a long period.
To fully exploit arbs, you must have a huge number of funded bookmaker accounts, as well as the time to take full advantage. This involves significant organization and effort. Many practice arbing for a living (aping financial arbitrage) in which time invested must also be measured as a cost.
Bookmakers are constantly changing their odds and assessing risk, so the average life-span of an arb can be as little as 15 minutes. This makes time of the essence, and when humans are time-pressured errors inevitably occur. Arb software systems can help in this regard, but their cost will eat into your profit margin. Make sure you have plenty of payment options, including e-wallets which often offer the fastest deposit methods.
By William Lewis
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