Arbitrage betting is one of the ways of ensuring the odds are in your favor when placing your bet. Also referred to as Arbs betting, SureWins, MiracleBets, or SureBets, it is a technique that mitigates your risk exposure by spreading your chances across multiple betting platforms. The outcome is a guaranteed’ profit. What’s not to love about that?
In this piece, we will be taking a deep dive into the world of arbitrage sports betting, or SureBets. We’ll take a closer look at all the mechanics that go into successfully navigating the industry and factoring in all the surrounding probabilities and odds to evolve a viable arbitrage bet calculator. Don’t worry about any of the figures and formulas in here – they’re just to give you a more concise picture of the ideas we cover than some type of homework.
Anyway, let’s get right into it.
How do we Define Arbitrage Betting?
Arbitrage will be a familiar term for those with any experience in the financial world. For bankers and traders, especially those in the currency trading field, arbitrage is the practice of making profits by taking advantage of relative price differences between currencies. That’s putting it simply.
In the world of sports betting, a similar model has been adopted as a way of identifying and profiting from windows’ presented by the different projections made by betting companies concerning the outcome of a sporting event, even though bets can be made on all sorts of things including elections, votes, or other phenomena where the result is considered uncertain.
These are some of the core terms we’ll be referring to here:
This refers to the chances that a particular outcome is likely to occur, typically represented as a percentage. The probability of a flipped coin landing on heads, for example, will be 50%
This is closely related to probability but brings in a higher level of utility in betting due to its greater accuracy or range. It’s a ratio of the chances of something happening against the chances of it failing to occur. A good example is a loaded die, which will have different probabilities of landing on any of its six sides.
A bettor’s stake is the amount of money they place on their bet, whose amount will determine how much they win or lose.
Also known as vigorish or the vig, this refers to the bookmaker’s practice of setting their betting odds in such a way that they never lose, all factors being equal. They give themselves this edge by setting their odds to go beyond 100%, the true odds. If, for instance, you place an equal amount of money with them that a coin will either land on heads or tails, you won’t come away with all your money – the house will make money from the bets.
These terms are critical for any bettor because they determine how much you stand to win should your bet be the correct one or in the money.’
Now, betting companies, otherwise known as bookmakers, will typically set their betting odds according to what they think the outcome will be. An arbitrage opportunity will present in situations where two bookies have sufficiently disparate odds offered to the betting public.
Note: That we can calculate implied probability from the betting odds we’re presented with using the following simple formula: (1/odds) X 100
No bookie can be perfectly sure about the outcome of any event unless it’s rigged in some way and therefore unlawful. This means that different bookies will have different estimates about the odds of specific outcomes. While these differences might not be very vast, the sharp bettor can spot these differences and set up their bets so that their odds come down to below 100%, giving them, rather than the house, better chances of winning.
Let’s move on and see just how this works.
How do we Identify Arbitrage Bets?
Let’s take an imagined example to illustrate how a punter would go about identifying an arbitrage betting opportunity and take advantage of it.
Let’s say that there’s a tennis matchup coming up between Rafael Nadal and Novak Djokovic. When looking up the odds for this matchup, you find that Bookmaker A gives Djokovic odds of 1.48 to win the match. On the other hand, Bookmaker B places his chances of victory even higher, giving him odds of 1.36.
This will mean that backing Nadal for the win will present you with odds of 2.75 and 3.25 between the two bookies, respectively. What does this mean to us, the betting public? It means that should a punter place one bet with bookie A for Djokovic to win and another one with bookie B for Nadal to win, they will come away with a profit, no matter the outcome of the match is. That’s where the Sure’ part of SureBets comes in – done well; you literally can’t lose.
Flipside of arbitrage bets
The flipside of these guaranteed winnings is that the margins are typically very slim – you’ll rarely find discrepancies between bookie predictions that run to more than a couple of percentage points. You’ll be very lucky or skilled to identify an arbitrage opportunity offering you winnings approaching 10%. For many potential punters, this makes arbing seem like too much work for too little profit, as an investment of $1,000 might net you anywhere from $1 to $10, on average.
Remember that the bookies themselves always have an eye out for such opportunities because they recognize them as indicators of mistakes on their part. The last thing they want is for you to get a shot at a SureBet opportunity since their business model relies on the odds being in their favor – what if everyone was arbitrage betting?
Anyway, the reality of arbitrage betting is that large amounts of money will need to be invested for it to be truly profitable for a punter. The same is apparent in the financial currency markets we mentioned earlier – vast sums of money need to be involved in the transactions to be profitable due to the slim margins on offer. As an individual, Forex arbitrage will probably not be viable for you, as the transaction fees alone might overshoot whatever arbitrage gains you manage to identify and take advantage of.
Understanding the Math Behind Arbitrage Betting
A certain amount of precision is required for bettors to find their way to profitability in arbitrage betting successfully. Remember that you’re pitting your wits against the bookies, who aren’t known for their sloppiness when it comes to money matters. Still, the playing field is evened out somewhat by the sheer number of betting events and the variety of bookies in the market today.
The process of calculating the profitability or viability of an arbitrage opportunity is one that anyone can carry out on their own. You can find a helpful free arbitrage betting calculator download right here to help you figure out where good bets lie. There are three main avenues via which punters might delve into arbitrage betting, Bookmaker-Exchange, Bookmaker-Bookmaker, and 3-Way. We’ll expound below.
This is a common strategy for arbitrage betting, involving placing one bet with a bookmaker and placing similar stakes with a betting exchange on the opposite outcome for the same event. Let’s stick with our Djokovic – Nadal example from earlier on to explore this further.
Let’s say Bookie A has Odds of 2.20(45.45%) for a Djokovic Win and 1.68(59.52%) for a Nadal win. The combined market margin will be:
45.45% + 59.52% = 105%
As we noted earlier, this favors the bookmakers who compile these odds by design.
Now, let’s say you visit a Betting Exchange where you’re offered odds of 50.51% for a Djokovic Loss. If you combine this with the odds of a Nadal win as offered by Bookie A, you’ll arrive at a combined market margin of:
50.51% + 45.45% = 95.96%
A margin below 100% favors you, the punter. Congratulations, you have yourself an arbing opportunity!
Let’s say you have $400 to bet on Djokovic with bookie A. How much should you bet on him to lose at the exchange to realize a profit at the end of the day? Here’s the calculation:
(Win odds X Betting amount) / (loss odds – exchange commission)
(2.2*400) / (1.98-0.02) = $448.98
NB. The exchange commission is the charge exchanges place on all bets.
Once you’ve figured out what you need to bet on the exchange (losing odds), you’ll essentially know what to expect should either outcome come to pass. Whether Djokovic or Nadal loses in this matchup, you will stand to make a relatively risk-free profit of $48.98.
This type of arbitrage relies on the same fundamentals as above. The only difference is that you will be making your calculations with the odds offered by two separate bookies rather than between a bookie and a betting exchange. One advantage of doing things this way is that you will avoid the exchange commission levied by exchanges.
There are certain sporting events where the outcome will not be one of two but one of three. The prime example is soccer, where either one of the two teams will emerge the winner or see the game end in a tie. The tie is considered a third possible outcome, which will necessitate placing a tie bet with a third bookie to cover all your bases.
Automated Arbitrage Identification
There are automated services online you can subscribe to, where algorithms search for arbitration opportunities for you. These are known as arbitrage hunters and will do the work of scanning thousands of events to identify arbitrage opportunities. There are also plenty of forums and websites where arbing opportunities are posted and discussed by the community. So, why go through the process of making these calculations on your own, you might wonder?
Well, the fact that thousands of subscribers and members on these forums will have access to these insights means that they tend to dry up pretty quickly as soon as bookies notice the uptick in activity surrounding the events involved. In fact, now’s a good time to look closely at where the downsides of arbitrage betting are to be encountered.
Formulating an Arbitrage Bet Calculator
With some programming knowledge and familiarity with the formulas involved in calculating arbitrage opportunities, developing your own arbitrage calculator is not out of anyone’s reach. It’s not, however, a simple exercise. We’ve built Sure Bet Calculator in Google Spreadsheets that is available to download for free.
What are the Downsides of Arbitrage Betting?
While arbitrage betting might seem like a foolproof solution for the punter hoping to maximize their chances of success, there are a couple of downsides to it as well. Keep the following in mind as you decide whether or not arbing is for you:
Arb Opportunities are Hard to Identify
As we’ve mentioned earlier in this piece, bookies are always on the lookout for potential arbitration opportunities themselves so that they can rectify or patch them up. Aside from this, there will be countless other punters just like yourself searching for the same arb opportunities, which are typically few and far between. You’ll need to be pretty quick on the draw not only to identify an arbitrage opportunity before it is closed up but to do it before fellow sports bettors spot it as well.
Profit Margins are Relatively small.
You won’t have the opportunity to double your money with a single bet should this be your strategy. Arbitrage betting involves placing large stakes for minimal, although low-risk, gains. If you’re hoping to make serious money here, your bankroll will need to be an exceptionally sizable one.
Bookies Really Hate this Betting Strategy
As you might imagine, no bookie will take a kind view to bettors who find a way to beat their carefully designed system. The House always wins, as they say, so who are you to say otherwise? In many instances, bookies that realize you’re using this strategy might restrict or suspend your account or even go so far as to ban it outright. Caution is the keyword here. Step lightly.
What is Sports Betting?
The above reasons have caused many people to shy away from arbitrage betting or use it in conjunction with other strategies, especially if they don’t have the betting capital to make it worthwhile. So, what other options are there? One great option for punters is the use of Sports Betting Models. These are systems designed to identify unbiased picks based on the calculated probable outcomes of the sporting events.
These models make use of dedicated algorithms that take in information such as performance history, home/away performance, player form (where possible), weather, and any other information the model’s designer considers pertinent to the outcome of the encounter.
Advantages of sports betting models
Such models, as you might have deduced, will deliver different results depending on the savviness of the model designer. While individuals can develop their own predictive models, especially with the statistics and records regarding individual player and team performances available thanks to the internet, many bettors prefer to pick a sports betting model among the options available online.
Sports betting models offer similar advantages to arbitrage betting strategies, in that a model designed by someone with a keener insight than any particular bookie may consistently beat their odds by predicting outcomes more accurately. Bookmakers are not as averse to this type of strategy as it is considered more in the line of a fair and square’ defeat than arbitrage.
At the end of the day, Sports betting models rely more on the skill of the sports handicapper and their ability to interpret information than arbitrage calculation methods, which are more or less purely mathematical exercises. You can find some spectacularly accurate sports betting models out there or enroll in free courses such as what is offered here.
The world of betting can be a fickle one, which is where all the excitement comes in. When making bets on any events, be they sporting or otherwise, there’s always be a risk of losing your stake. While arbitrage betting strategies might offer low-risk winnings, there are downsides to this system that every punter should be mindful of. Its high-speed action, high stakes, market saturation, and potential for account suspension make it an option to approach carefully. Sports betting models offer up a viable alternative for the betting public.
Should you be interested in arbitrage betting, the most prudent course of action would be to use it in tandem with other strategies. Whatever approach suits you best, here’s wishing you luck on your next wager!