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The advantages of betting with Intertops
Lazy Sports Betting Tactics
How to beat the bookies in the over-under markets
How to convert between decimal and American odds
How to get an edge in betting
How to test the credibility of a tipster`s record
Kelly criterion method
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How Weather Affects Sports Betting
Increase Your Chances of Winning Long Term Betting on Sports
Intermediate and Advanced Sports Betting
Common sportsbetting myths
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Betting do's and don'ts
Choosing a staking method based on your betting profile
Betting staking plans
Value betting explained
Sports-betting- a game of numbers
Market movement in betting
Types of odds explained
European types of bets explained
American types of bets explained
Martingale Considerations in Sports Betting
In-play betting
Accumulator betting
Mobile betting
A Crash Course in Horse Racing
A Crash Course In Sports Betting
American odds versus decimal odds
Bankroll management
Money management in sportsbetting- odds, edge and variance
Basic bet types explained
Paying for Picks
Betting on winning streaks
Betting psychology- a crash course about aspiring professional bettors
Popular Sports Betting Beliefs
Do you make these 9 sportsbetting mistakes?
Does intuition have a place in sportsbetting?
Exchange betting
Randomness in sportsbetting
Fractional versus decimal odds
Home team advantage analised
How bad at sportsbetting are you?
Reasons to Keep Betting Records
How bookmakers make money
How bookmakers work
How do betting exchanges work
Should You Bet on Multiple Sports or Specialize?
How do free bets work
How does luck influence short term betting
How good are betting tipsters
Sports Betting for Beginners
How loss aversion impacts performance
How many sports to bet on
How Much Should You Bet On a Sporting Event?
Staking-one method to improve your betting
How much you should risk per bet?
How Sports Betting Has Changed Over the Last 20 Years
How To Avoid A Big Sports Betting Loss
The art of multiple betting
The history of lotteries
The value of information in soccer betting
Three careers ideally suited to betting
Tips for Better Sports Betting Results
Types of Online Sports Betting Bonuses
Understanding and managing your risk of ruin
Understanding Horse Racing Bet Types
Understanding Live Betting
Value betting is an essential skill for bettors
Ways to Increase the Percentage of Sports Bets You Win
What are drawdowns and how to manage them
What are the most common mistakes the bettors make
What are the real chances of winning the lottery?
What distinguishes winning from losing betors
What is a handicap soccer betting?
What is the Fibonacci betting system?
What is the Labouchere betting system
What is the Martingale staking system
Why do we gamble? Irrationality and overconfidence
Why patience is an essential trait for any serious bettor
Poisson Distribution: Predict the score in soccer betting
Fixed Staking vs. Variable Staking
Basketball betting: Bet types explained
7 Sure-Fire Baseball Betting Strategies
How Does In-Play Betting Work?
To Parlay, or Not to Parlay?
Wisdom of the Crowds applied to betting
CASINO ARTICLES
A Novice’s Tutorial on Casino Gambling Games
How to Gamble with Dice – Popular Dice Games and Their Variations
How Online Casinos Helped Me Love Roulette Even More
My Top Three Tips for Getting Comps in Casinos
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5 Gambling Tricks You Can Only Use Online
5 LITTLE-KNOWN FACTS THAT AFFECT YOUR AVERAGE HOURLY LOSS IN A CASINO
5 REASONS CASINO GAMES ARE SO ENTERTAINING
5 Things All Casino Gambling Fans Are Sick of Hearing
5 Tips to Managing Your Casino Bankroll Effectively
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5 Rookie Mistakes in Blackjack and How to Avoid Them
7 roulette variations probably you have never heard of
7 THINGS YOU NEVER KNEW ABOUT CASINOS
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How to Tell If You’re About to Make a Mistake with Your Next Casino Bet
The 12 Types of People I Meet in Casinos – Analyzing My Fellow Gamblers
10 SURE-FIRE CASINO GAMBLING STRATEGIES THAT WORK
What I Love Most About My Three Favorite Video Poker Games
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Which Bets on Which Casino Games Offer the Best Odds of Doubling Your Money?
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Using Self-Discipline in the Casino
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Going All-In – When to Bet It All in Poker
10 Things I Wish I’d Known About Roulette Before I Started
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Are No-Deposit Bonuses at Online Casinos a Waste of Your Time or Worth Going For?
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BEATING BACCARAT – WINNING SYSTEMS & STRATEGIES
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GAMBLING GAMES THAT ARE REALLY WORTH TRYING
HOW TO AVOID GOING BROKE AT THE ROULETTE WHEEL
HOW TO GET YOUR FIRST ONLINE CASINO SIGNUP BONUS
How to make a million playing video poker
How to Spend Your Gambling Winnings
HOW TO SURVIVE A BLIZZARD AT THE CRAPS TABLE
HOW TO WIN AT ROULETTE
How to Win Consistently at Casino Gambling
How to Win Consistently at Craps
How to Win Consistently at Roulette
HOW VOLATILITY WORKS IN CASINO GAMBLING
Is It Possible to Play Roulette as a Career (Or Even as a Part Time Gig)?
Is One Blackjack Game Better Than Another?
MONEY MANAGEMENT STRATEGY FOR YOUR NEXT CASINO TRIP
ONLINE CASINO DISPUTES
SKILL BASED CASINO GAMES: PROS AND CONS
The 5 secret joys of casino gambling
The Benefits of an Online Gambling Environment
The Best Long-Term Strategies for Playing Progressive Jackpot Slots
THE BIGGEST JACKPOTS IN ONLINE GAMBLING
THE EASIEST WAY TO LEARN BLACKJACK STRATEGY
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The Surprising Secret to Winning at Casino Gambling
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ARBITRAGE BETTING EXPLAINED

Arbitrage betting promises risk free returns - the Holy Grail of gambling - so is naturally a very popular topic within the betting community, but how does arbitrage betting work? We have laid out everything you need to know; this is arbitrage betting explained.

 

Arbitrage Betting

Arbitrage betting exploits the opportunity to place proportionate bets on each outcome of the same event with differing bookmakers so that a profit is guaranteed regardeless of the outcome.

 

What is Arbitrage betting?

Any type of risk-based activity is a search for price-differential. If you can buy widgets from Factory A for €10 and sell them to Retailer B for €15 you can pocket €5 risk free.

A huge proportion of profit generated by the investment banking industry is based on this simple principle - in much more complex form - across a dizzying array of commodities and assets.

Arbitrage betting by comparison is much closer to the simple widget analogy above - it is used by many gamblers to successfully make risk-free profit.

Example of an arbitrage bet

The best way to explain how arbitrage works is through a simple example. Take the odds on a tennis match between Player A and Player B offered by two hypothetical bookmakers - A & B - as illustrated in the table below.

 

Player 1

Player 2

Margin

Stake

Profit

Odds Bookmaker A (BA)

1.300

3.930

102.4%

26.54

4.30

Odds Bookmaker B (BB)

1.420

2.900

104.9%

73.46

4.31

Arbitrage (Combining Player 1/BB & Player 2/BA)

1.420

3.930

95.9% (4.1% profit margin)

100

 

The margin is indicated for each bookmaker i.e. the edge in their favour. By cross-matching the odds from Player 2 at Bookmaker A (3.930) with those for Player 1 at Bookmaker B, (1.420) the margin is in the bettor's€ favour providing a guaranteed return of 4.1% (100 - 95.9 = 4.1). Importantly, your stake needs to be in proportion to the odds as illustrated, which gives a guaranteed return of €4.30 whether Player 1 or Player 2 wins.

This principle can apply to any betting market, beyond just two selections, including spread betting, while it also has wide application in live betting where arbitrage opportunities are constantly available by Backing and Laying in a constantly shifting market. You can also use free bonuses in an arbitrage bet to lock in a guaranteed profit, but the conditions that apply are restrictive.

Why do arbitrage opportunities occur?

Though you may be simply interested in profiting from arbitrage, it is important for context to understand why arbitrage opportunities occur. These are the main reasons:

  • Bookmakers differing in opinion
  • Bookmakers taking a specific position or running a promotion
  • Bookmakers slow to move their odds or simply making a mistake

 

Potential pitfalls of arbitrage betting

If at this point you are itching to get out there making free money from arbitrage betting, now is time for a reality check, as there is no such thing as a free lunch. Though the mathematical logic of arbitrage is sound there are risks associated with the process of finding and successfully placing the required bets. Here are the most important things to consider before starting out:

Stake limitation & account closure

Some bookmakers dislike arbitrage players as they don't fit their desired player profile.

Bet cancellation

Bookmakers can cancel bets where mistakes have been made, which would leave you exposed on the other side(s). This can easily wipe out your profits accrued over a long period. Take a close look at the Rules for each bookmaker you intend to use for arbitrage.

Complexity

To fully exploit arbitrage betting, you must have a huge number of funded bookmaker accounts, as well as the time to take full advantage. This involves significant organisation and effort. Many practice arbitrage betting for a living (financial arbitrage) in which time invested must also be measured as a cost. There are many services out there that will do the hard work for you of finding arbs, but they will charge a fee which eats into your profit, and do not eliminate all the risks outlined here.

Fleeting Arb Opportunities

Bookmakers are constantly updating their odds, often using their competitors as a benchmark. As a result arbitrage opportunities can last seconds rather than minutes so time of the essence, and when humans are time-pressured errors inevitably occur. Arbitrage software systems can help in this regard, but cannot guarantee that you won't be left with a naked position - in other words, you cannot cover all the bet options so will incurr risk.

Value betting vs Arbitrage betting

Some bettors argue that arbitrage simply exposes where bookmakers have incorrectly priced a market, and therefore the value is in solely betting with the 'wrong odds'. This idea is much more complex that it appears, and we have a dedicated an entire article to the arbitrage vs value betting argument.