Arbitrage Betting

Arbitrage betting is the method of locking in a profit no matter what the result of an event. This requires placing bets on all outcomes of an event across multiple wagering providers where the sum of all probabilities is less than 100% when Backing and greater than 100% when Laying.

 

How can Arbitrage occur?

  • Differing bookmaker opinions
  • Bookmakers taking a particular position
  • Bookmakers accepting large wagers on one side and then needing to balance their book

This can be particularly difficult to monitor across a range of markets but there are betting software providers which can support sports arbitrage.

 

Bookmaker Promotions

Sign up bonuses and boosted fixed odds promotions can produce arbitrage betting opportunities. Boosted fixed odds with bookmakers allow Betfair users the ability to Back with the bookmaker and Lay the same selection on the exchange to secure a possible profit no matter the result of an event. Bookmaker sign up free bet bonuses can also enable similar arbitrage betting propositions but can often have restrictive turnover conditions required.

 

Arbitrage Betting Example

If we look at this table with multiple odds from two wagering providers we can try and determine an arbitrage opportunity.

Looking at Wagering Provider 1 independently we see the total market percentage is greater than 100% (100.08%). The same applies for Wagering Provider 2 (104.44%).

This means that by looking at these two providers independently there is no opportunity present.

By taking the best prices (highlighted in green) from each Wagering Provider and summing the probabilities we get a percentage less than 100%. Sum of probabilities = 93.47%.

Provider 1 Djokovic Probability – 100 / 2.12 = 47.17%

Provider 2 Nadal Probability – 100 / 2.16 = 46.29%

By betting to pay out the same profit regardless of the outcome, the profit margin achieved is 1 divided by the sum of probabilities (1/.9347) which = 6.98%.

Betfair Arbitrage Betting Table 2

Utilising Multiple Wagering Providers

By taking the best prices (highlighted in green) from each Wagering Provider and summing the probabilities we get a percentage less than 100%. Sum of probabilities = 93.47%.

Provider 1 Djokovic Probability – 100 / 2.12 = 47.17%

Provider 2 Nadal Probability – 100 / 2.16 = 46.29%

By betting to pay out the same profit regardless of the outcome, the profit margin achieved is 1 divided by the sum of probabilities (1/.9347) which = 6.98%. To determine how much to stake on each outcome to return the same amount the calculation below can be implemented:

Firstly determine the total amount you want to invest into this sports arbitrage. For this example we are going to use $200. Now utilise the probabilities available to determine the stake.

Djokovic stake: $200 * .4717 = $94.34

Nadal stake: $200 * .4629 = $92.58

Total outlay: $94.34 + $92.58 = $186.92

Djokovic wins: $200 – $186.92 = $13.08 profit

Nadal wins: $200 – $186.92 = $13.08 profit

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