Arbitrage betting involves taking advantage of differences between the "odds" offered by bookmakers and betting exchanges on selected sport events.
Arbitrage betting is similar to the concept of Matched Betting.
Before you start arbitrage betting, make sure you have read and fully understand this arbitrage betting guide. Arbitrage betting can involve placing large bets online – so it can be a costly experience if you don’t fully understand the process.
Step By Step Guide To Arbitrage Betting
Join a betting exchange and fund your account sufficiently (perhaps £200) which is used to cover your liabities. You can always add/remove money from the account as and when required.
Now you will need to find an arbitrage betting opportunity. This can be done either by manually searching through the odds available at bookmakers, comparing them against the odds available to lay at the betting exchanges, or you can also join an arbitrage betting service website.
Back the arbitrage bet at the bookmaker that you found the arbitrage opportunity bet (should have higher odds than those offered at the betting exchange).
Lay the exact same bet at the betting exchange. Use our Matched Betting Calculator to work out the exact stakes required and expected profit/loss.
All steps completed means you'll have performed your first arbitrage bet. Repeat steps 2 thru 4 with alternative arbitrage betting opportunities.
Remember, if you struggle finding arbitrage betting opportunities, you should consider joining an arbitrage betting subscription site where you'll be regularly supplied with excellent arbitrage betting opportunities as and when they occur.
Important: The more money you are able to stake when placing arbitrage bets, the higher your profits will be. However, some bookmakers will start to limit you if you start winning lots of money at their firms. You need to be aware of these limits, and will have to move on to other bookmakers when you do become highly limited. You won’t ever get limited at the betting exchanges, but at times you will need to deposit large amounts of money to cover your liabilities. Be careful when performing arbitrage bets as a simple mistake can cost you a lot of money. Read the arbitrage betting guide before you start attempting arbitrage betting.
Explanation Of Arbitrage Betting
Arbitrage betting opportunities occur when a bookmaker sets their odds on an event higher than they should. Money can be made when this happens by using a betting exchange. By betting against that event on a betting exchange (called laying a bet) and backing the event at the bookmaker with the high odds, you can lock-in a profit no matter what happens in the event. Although the difference in odds with the back and lay may only be very small, this value can be greatly increased by multiplying the stakes used when placing the bets.
Arbitrage Betting Guide Part 1
Definition Of Arbitrage Betting
In betting terms, arbitrage involves covering all possible outcomes of a specific event to earn a profit, no matter the outcome. An arbitrage betting opportunity comes about when the odds to back an event are higher than the odds to lay that same event, thus enabling a profit to be gained from the event.
Using Arbitrage Betting Methods
As mentioned previously, an Arb is formed when the odds to lay a bet are lower than the odds to back a bet (after taking any percentages of commissions into account).*
This means that you can back an event to happen at the Bookmakers, and by entering the correct Lay stake at the Exchange, then no matter what happens you will have made a profit. If the event wins at the Bookmakers, you will have won (Bookmaker will have higher odds than the Exchange in the arb) so you will have won the largest amount. You would also have to pay out at the Exchange, because of the Lay which you made (you made a bet that the above event wouldn’t happen) but due to the difference in odds, you will pay out a smaller amount at the Exchange compared to what was won at the Bookmakers.
*There are other ways to form an arb, without using an Exchange to lay a bet. This involves backing an outcome at one Bookmaker, and backing the other outcome at another, and is a lot more complicated then using an Exchange to lay, as there are more outcomes to cover (the draw is normally another possibility).
Though arbing does involve moving large amounts of money into the Exchange to cover the liability, it will not be gaining any interest here so you must be actively arbing or using the liability to match-bets to gain the Bookmakers bonuses (as mentioned on the previous page). There will be no point in transferring large amounts of cash from your perfectly good bank account with its %5 interest rate, unless you are actively going after arbs. In which case you will be able to beat any kind of interest rates set by the banks, depending on the amount of time you spend arbing with your funds. Arbing can be an excellent way to multiply your money, but ultimately the amount you earn depends on the amount of time you are willing to spend searching for and performing arbs.
Please note: Arbitrage betting will involve placing bets with large amounts of money – easily a few hundred pounds each time, so you will obviously need a fair amount of money to start arbitrage betting. Obviously if you are placing large money bets, mistakes can happen – and at this level they are very costly. Be careful that you fully understand what you are doing before you start placing big money bets on any arbs that you find.
Overview Of The Arbitrage Betting Process
Arbitrage betting can be a quite hard subject to get your head around, especially if you haven’t read the past section about matched betting, so I would highly recommend that you read these pages several times or even print these pages off. Arbitrage betting will involve placing large money bets, and so it is important that you fully understand what it is that you are doing. If you would like to print off the pages that describe the process of arbtrage betting, click the printer icon below to load up a printer-friendly version of the arbitrage betting section of the site.
Arbitrage Betting Guide Part 2
Example Of An Arbitrage Bet
The odds on Tottenham to win the league are 9 at the Bookmakers. The odds to lay Tottenham to win the league are 8.5 at the Exchange.
You make a £10 bet on Tottenham to win the league at the Bookmakers. From your matcher spreadsheet calculations, you then put down a Lay Stake of £10.65 at the Exchange.
If Tottenham win the league, you will have £90 returned to you at the Bookmakers (odds of 9 x £10 stake = £90). Therefore you have £80 profit here.
You also have to pay out at the Exchange, because Tottenham won the league. You pay out £79.88 (odds of 8.5 x £10.65 stake – %5 commission = £79.88). Therefore you have a loss of £79.88 here.
From the Bookmakers you had £80 profit, minus the £79.88 payout at the Exchange which leaves you with 12p profit.
To round things off, if Tottenham hadn’t won the league, you would have lost your £10 stake at the Bookmakers. You would have won your stake at the Exchange though, of £10.12 (£10.65 minus %5 commission). Therefore you would have made a profit of 12pence at the Bookmakers. As you can see, both values are exactly the same (as both the bets were matched exactly).
Tottenham hotspur arb
A screenshot of the matcher.exe programme, showing the arb mentioned above. Note the Closeness % value has turned green, signalling that this is an arb.
The real money is made when you place a stake of more than £10, for example £1000. You would need to lay £1,065.09, but by the end of it you would earn £11.83, just for making two bets. However for this you would need a high Liability – you would need to have a lot of spare cash, incase you needed to pay out at the Exchange (£7,988.17 to be exact).
Important: When you place a large bet on an arbitrage opportunity at a bookmakers website, you will also need to lay this exact same bet, at the betting exchange. If the bet wins, you win a very large amount of money at the bookmakers, but you will also have to pay out a very large amount of money at the betting exchange – which isn’t ideal. Therefore you will need a lot of spare money in your betting exchange account, just incase you have to pay out a large amount of money for a bet that wins.
Another Example Of An Arbitrage Bet
The odds on Man City to beat Arsenal are 4 at the Bookmakers. The odds to lay Man City to beat Arsenal are 3.5 at the Exchange.
You make a £100 bet on Man City to beat Arsenal at the odds of 4 at the Bookmakers. From your matcher spreadsheet calculations, you then put down a Lay Stake of £115.94 at the Exchange.
If Man City beat Arsenal, you will have £400 returned to you at the Bookmakers (odds of 4 x £100 stake = £400). Therefore you have £300 profit here.
You also have to pay out at the Exchange, because Man City won the match. You pay out £289.86 (odds of 3.5 x £115.94 stake – %5 commission = £289.86). Therefore you have a loss of £289.86 here.
From the Bookmakers you had £300 profit, minus the £289.86 payout at the Exchange which leaves you with £10.14 profit.
Again, if Man City had lost the match you would have lost your £100 stake at the Bookmakers. You would have won your stake at the Exchange though, which was £110.14 (£115.94 minus %5 commission). Lay stake of £110.14 minus the bookies loss of £100 = £10.14 profit. You can see this is exactly the same figure as the outcome above, where Man City won the match.
The value of £100 is quite large to use in a bet, some people may think, but when you are trying to earn money by arbing then the more you put into an arb, the more you will get out of it. The profits are multiplied by the size of the original stake in the matched bet, and although some people may shudder at the thought of placing so much on a bet, its perfectly safe aslong as you go about it the correct way. Read the Danger section below for more warnings…
You can see from the table below that for the above arb (4 and 3.5) the more money you are willing to use in an arb, the more you are going to earn.
Bet Amount Liability Profit
£10 £28.99 £1.04
£100 £289.86 £15.94
£1000 £2,898.55 £159.42Arbitrage Betting Guide Part 3
Dangers And Pitfalls Of Arbitrage Betting
Of course there are going to be a few points to watch out for when arbing, especially as it involves using a lot of money so you must be extra careful and follow all of the advice given throughout this article. Arbing can be perfectly safe and can be a guaranteed way to get a good return on your money, so don’t be put off by the possible pitfalls – just make sure you are aware of them.
Obviously when going after arbs one of the main drawbacks is the liability. You will need a lot of spare money incase you win at the bookies, and have to pay out at the Exchange. Because of the way Exchanges works, they won’t allow you to lay an event until you have the money ready in the account (the full amount which you may have to pay out). This is because it prevents people trying to not pay up and cheat the system. When going about arbing, you tend to pile in with a lot of money at the bookies and you then have to lay an even larger amount at the Exchange to equal this. It may be hard for some people to go straight into the world of arbing unless they have a fair amount of money behind them, that they are able and willing to put in an Exchange.
An arb is formed from a difference of opinion in the market, and it can be quite a rare occurance. Usually when one does occur, bundles of people pile in with their money, and the arb soon disappears. This can be extremely dangerous, considering some people tend to back an event at the Bookmakers before laying the event at the Exchange. If you saw an arb and placed a £300 bet at the bookies only to find that all of the available money at the Exchange had been taken, you’ll be stuck. You might have to settle for a lower price at the Exchange, and make a loss on the bet. You could try and cancel the bet at the Bookmaker, but this is very unlikely to happen.
The best way to avoid this sort of scenario is to be quick when spotting an arb, but make sure you are confident with what you are doing. You don’t have the time to make any mistakes, or you’ll lose your money. Probably the best way around losing out on a good price at the Exchange is to take the price you need as soon as you notice the arb. Then you can go to the bookies, and place the bet safe in knowing that the lay has already been made.
Please Note: Though there are a few dangers involved with arbitrage betting, these are all easily noticed and avoided, and it is well worth performing arbitrage betting if you know exactly what you are doing. By pointing out the dangers on this page, hopefully you will understand arbitrage betting better, and will know what to watch out for when you are doing your own arbitrage bets. The advantages of arbing highly outweigh the disadvantages, and so it is well worth having a go when you know how it all works.
Bookmakers limitations can be a very annoying problem, and all arbers will probably meet this problem one day in their arbing career. As previously mentioned, if someone becomes too ‘successful’ at the bookies and has been winning large amounts after placing large bets for their arbs, it is highly likely they will be limited to the amount they can place on any one bet. This could mean that the amazing arb you notice at one particular bookies is beyond your reach – they wouldn’t take your money for the bet. You must be aware of any limiations set upon you by the bookies if, when matching/laying a bet, you lay at the Exchange first. It would be a disaster if you were to lay a large amount at the bookies before being refused to make the equal bet at the bookies. Of course the way around this could be to make the bet at the Bookmaker first before laying at the Exchange, but this means that the lay price you wanted has been taken up already.
Usually the limitations opposed will depend on the bookmaker that you are using. Some will not mind the fact that you are winning three or four thousand pounds in bets, and will continue to allow you to place high money bets. Some bookmakers on the other hand will get annoyed when you win a three or four hundred pounds bet, and will limit you to placing £5 or £10 bets. Though this is incredibly annoying, it is just something you will have to put up with as their is not much you can do about it. Try and find arbs which involve betting on an event which wont happen, but this is still hard to do.
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