Sports Arbitrage Betting System

The sports betting experience can be one that is thoroughly entertaining, if you know what you’re doing. And once you begin gaining experience with betting, you can introduce some new techniques into your strategy. One of those techniques is to involve yourself in sports arbitrage betting, and this particular form of betting benefits from price differentials between two markets. In this respect, it is used for guaranteeing yourself a profit, regardless of the overall outcome.

With this being the case, sports arbitrage betting requires you to utilise a betting exchange, rather than a standard sportsbook. Arbitrage in general is very common as a practice for traders on the stock exchange to take advantage of, by buying stock at a particular price on one exchange and selling the same stock for a higher price on another. That principle works exactly the same for sports betting, working as the makeup of a betting exchange.

How to Proceed with Making an Arbitrage Bet

Generally speaking, there are two different types of arbitrage bets that you can take advantage of at betting exchanges. These are:

• Odds arbitrage

• Bonus arbitrage, which is also known as matched betting

Odds Arbitrage

Any fair market is priced with an implied probability that adds up to 100%, so traditional bookmakers build a margin into their odds in a bid to balance the book. This prices the market over 100%. But arbitrage betting reverses this in your favour, allowing you to exploit the various price discrepancies across bookmakers and a betting exchange. The implied probability of odds on offer in this case is below 100%, operating in favour of the bettor.

The simplest form of arbitrage betting is where the exchange lay odds are lower than the back odds offered by a bookmaker. This is where you can benefit from the back high and lay low trading philosophy. Essentially, you cover all eventualities across the bookmaker and exchange, so that you can guarantee yourself a profit whatever the outcome of the match is.

So, let’s say that you intend to bet on a game of darts. Gary Anderson is set to face off against Dimitri Van den Bergh, and for this event, you look at the odds available on a bookmaker and a betting exchange. The odds to back both of these players on the sportsbook site are as follows:

If you then visit an exchange site, you see that you can law Anderson with odds of 2.1, thereby wagering that he won’t win. This provides a great opportunity for a sports arbitrage bet to take place, as the implied probability for the combined bets stands at 89.29%, as displayed below:

So, if you decide that you want to stake £100 on Anderson to win at the bookmaker with the odds of 2.4, to calculate your lay stake on the exchange, you simply need to utilise the following calculation:

(back price x back stake) / (current lay odds – exchange commission)

(2.4 x £100) / (2.1 – 0.02) = £115.38

So, in this case, you would make a £115.38 lay bet on Anderson to win at odds of 2.1 via the betting exchange.

To calculate the profit that you would make if you won at the bookmaker, you’d need to use the following equation:

(Back odds – 1) x back stake – (lay odds -1) x lay stake

(2.4 – 1) x £100 – (2.1 – 1) x £115.38 = £13.08 in profit

And to calculate the profit if you were to win at the exchange, you need to use the following equation:

(lay stake x (1 – commission)) – bookmaker stake

(£115.38 x (1 – 0.02)) - £100 = £13.07 in profit

Overall Profit from an Odds Arbitrage Bet Like This

So, if you were to proceed with such an arbitrage bet on that darts game, which includes the 2% commission charged by the exchange should your wager win, the outcomes and your profit would be as follows:

Therefore, proceeding with this sort of arbitrage bet, you would be guaranteed to earn a profit of between £13.07 and £13.08, irrespective of the overall result of the darts game.

Bonus Arbitrage

This type of arbitrage bet, which is also known as matched betting, allows the bettors to take advantage of the money bonuses, free bets and incentives that most online bookmakers provide. You can then make a low-risk profit at an online exchange this way.

To utilise a bonus arbitrage betting strategy is quite simple. You place a bet with the sportsbook that offered the overall incentive, and then lay that same outcome on a betting exchange. This then allows you to cover all potential event outcomes, eliminate the risk that comes with such, and overall, lock in a guaranteed profit.

Risks Associated with Arbitrage Betting

Due to the fact that betting markets can be quite volatile frequently, arbitrage betting opportunities can occur fairly regularly, too. However, you need to consider a number of risks if you’re intending to participate in an arbitrage bet. These include:

- Bankroll Risk. It can require you to have a large bankroll in both the sportsbook and on the betting exchange, in order to ideally cover your liability requirements.

- Liquidity Risk. If there is a lack of liquidity (how much money is active in that particular market, which determines how much you can bet), this can also be a problem for anyone wanting to engage in arbitrage betting. If there isn’t sufficient liquidity, you won’t be able to complete your arbitrage bet, and this could result in you losing money.

- Speed Risk. Sportsbooks often monitor their competitors to ensure they’re not falling out of line. Yet the consequence of this is that arbitrage betting opportunities may not be available to take advantage of for a long time period. Such bets must therefore be completed swiftly before a market is corrected.

- Small Returns Risk. Profits are generally quite low when it comes to arbitrage betting, despite the mathematics behind the process being ideal. While it’s possible to make larger profits, it’s more often the case that making an arbitrage bet will return a maximum of 5% of your original wager.

- Limitations Risk. Bookmakers aren’t interested in having arbitrage bettors, so in response to this, they can opt to close or limit the stakes if you’re identified as such. Betting exchanges, on the other hand, do frequently welcome such gamblers.