What is Arbitrage Betting?
Stone cold lock. Can’t miss. Guaranteed winners. If you spend enough time in sports betting circles, there’s a good chance you’ll hear phrases like that thrown around with abandon. More often than not, they amount to little more than noise or the proverbial hot take.
What if there was really a legitimate way to lock in some small profits? Doing so would take some effort while paying careful attention to the numbers to hunt for appealing opportunities. Would you do it?
You can answer that question later on. For now, just know that what we’ve described is a real thing. It’s known as arbitrage betting. While it’s extremely difficult to do, we’ll explain how it all works and what you need to know about it right here.
What is arbitrage?
Arbitrage revolves around spotting inefficiencies in pricing. The phrase ‘buy low, sell high’ applies here. The general concept is the ability to buy something at one price and then quickly turn around and sell it for a better price.
It’s viewed as a quick way to turn a profit. Arbitrage is a term most commonly used in the worlds of economics and finance. Those who engage in the practice are often referred to as arbitrageurs.
In the financial markets, the practice of arbitrage is deployed when price differences are spotted between two markets. For a quick example, an asset may be priced low in one spot and higher in another. An arbitrageur could swoop in to buy low and sell high to lock in a profit.
How to use arbitrage in sports betting
For each game or contest listed at online and mobile sportsbooks, there will be odds attached. The odds for many events may be in range at multiple operators, but they won’t necessarily be the same in each and every spot.
That’s where arbitrage comes in from a sports betting perspective. The concept behind it says you can lock in profits by taking advantage of inefficiencies in the odds market. We’ll walk through some detailed examples on how it works in a bit.
Arbitrage can seem confusing at first glance, but it becomes less so when you focus on the basic concept from the financial world: you’re looking to lock in a profit by simply jumping on opportunities as they arise in the market.
Is arbitrage betting worth it?
First and foremost, finding profitable arbitrage opportunities can be time consuming. It’ll require scanning the lines from multiple operators in order to find the discrepancies that can be exploited for profit.
Additionally, you have to be ready to act right then and there. If you don’t strike soon after locating an arbitrage play, it can disappear once the lines start to move in response to additional betting action that comes in.
Lastly, sportsbook operators aren’t big fans of arbitrage. In fact, it’s possible an account could be flagged in extreme cases where arbitrage is suspected. Of course, if you’re using multiple books while playing this strategy, that problem can be avoided.
Line shopping for sports betting arbitrage opportunities
Whenever you plan to bet on sports, it’s always a good idea to shop the lines. This simply means that you are checking the latest odds from several operators to find the best ones. Our live odds feed can be quite handy on that front.
For arbitrage, line shopping is an absolute must. In order for the strategy to work, you need to find small differences on the lines that you can use to your advantage. If the numbers are exactly the same in each spot, then you would be out of luck.
The market isn’t that efficient. While many of the top operators are in close proximity on the biggest events, betting action will lead to some differences here and there. Sports bettors can sometimes find better deals by simply shopping around, as can arbitrageurs.
How to calculate arbitrage betting profit
For an arbitrage play, the idea is to find differences on the odds being offered for the same contest. As a quick example, let’s say sportsbook A is offering up the following line on an upcoming MLB game.
- Tampa Bay Rays +115
- Los Angeles Dodgers -105
Meanwhile, sportsbook B is offering up a line for the same game. However, the numbers have moved in the opposite direction at this spot.
- Tampa Bay Rays -105
- Los Angeles Dodgers +115
This is a perfect opportunity for the arbitrage player to pounce. They place a $100 bet on the Rays at the first book, and the same wager at the second book on the Dodgers. Regardless of who wins, they’ve locked in a profit.
- Winning $100 bet on Rays at +115 returns $215: the stake plus a profit of $115.
- Winning $100 bet on Dodgers at +115 returns $215: the stake plus a profit of $115
The total initial outlay for the bettor is $200. The guaranteed return is $215 regardless of which side wins. That’s a total profit of $15 or 7.5% on the initial bet. While not a huge score, it’s a solid return for a wager in which there’s simply no risk.
Actual returns for arbitrage scores will be based on the odds for the wagers you place. There are times when it can be extremely slight and maybe just a couple of points, while other times returns can be a bit more fruitful.
Arbitrage sports betting examples
In our simple example up above, the odds for our fictitious matchup were completely flipped around. One book had a side at +115, while the other offered the same on the opposite side. It would be great if arbitrage always worked so cleanly.
Unfortunately, it doesn’t. You won’t always be betting the same exact amount on both sides either. You have to be on point with your calculations to guarantee profits. Let’s walk through some examples using different sports to see it in action.
MLB arbitrage betting
During the MLB season, there are a lot of days that are jam-packed with games. That opens up even more chances for arbitrage, but you’ll have to do your homework. Let’s consider this average game in which there’s a slight favorite on the moneyline.
- Minnesota Twins -175
- Chicago White Sox +155
After you shop around a little, you find that another book is offering much more favorable MLB odds on the White Sox.
- Minnesota Twins -195
- Chicago White Sox +185
Could this be an arbitrage play? It certainly can be. In this case, you’d want to bet the two sides at opposite books. You’d take the Twins at -175 at the first operator and the White Sox at +185 at the other. To lock in a profit, you’ll have to use different wagering amounts.
- Winning $100 bet on Twins at -175 returns $157.10: $100 stake plus $57.10.
- Winning $55 bet on White Sox at +185 returns $156.75: $55 stake plus $106.75.
The total outlay for this bet is $155. If the Twins win, you’ll be ahead $2.10. For a White Sox win, you’d be up $1.75. While these aren’t huge returns at this stake, the profit potential rises right along with the wager amount.
NFL arbitrage betting
Since there’s a break in between weekly slates of NFL games, there’s plenty of time to hunt for arbitrage opportunities. Each contest will see a ton of NFL betting action, so the numbers are frequently shifting around at online and mobile sportsbooks.
Let’s consider this game in which there’s a slight home favorite on the moneyline.
- Detroit Lions +110
- Chicago Bears -130
Upon release, the odds are in close range at most books. As the week moves along, one operator gets hit with a good amount of Bears money while the other spots stay in line.
- Detroit Lions +140
- Chicago Bears -160
If another book is still at -130 for the Bears, you’re golden for arbitrage purposes. You’d place the following wagers to lock in a return regardless of which way the game breaks.
- Winning $100 bet on Bears at -130 returns $176.90: $100 stake plus $76.90.
- Winning $73 bet on Lions at +140 returns $175.20: $73 stake plus $102.20.
In total, you’ll have bet $173 on this game. If the Bears come out on top, you’ll be booking a profit of $3.90. In a case in which the Lions pull out the upset, the return will be $2.20. On their own, the returns are nothing to dance about, but it can certainly add up over the long run.
NHL arbitrage betting
As a moneyline-driven sport for betting, line shopping comes with the territory for the NHL. Those little ticks of difference may seem minor, but they can sure add up on the bottom line over the course of a season.
For arbitrage, you’re relying on those points of difference to rear their head. Let’s say that one book has the following lines:
- New York Rangers +135
- Chicago Blackhawks -155
Meanwhile, another book has a slightly different perspective on the game.
- New York Rangers +165
- Chicago Blackhawks -185
If you’re an arbitrage hunter, this is one of the games which will make the antennae go off. You can see a return on this game no matter which side wins with the following NHL bets.
- Winning $100 bet on the Blackhawks at -155 returns $164.50: $100 stake plus $64.50.
- Winning $62 bet on the Rangers at odds of +165 returns $164.30: $62 stake plus $102.30.
You’ve put a total of $162 in play on this NHL game. If the Blackhawks win, the net return will be $2.50. For a Rangers upset, the total profit coming back your way is $2.30. That’s a profit you wouldn’t be guaranteed to have in the absence of arbitrage.
Other sports you can use for arbitrage betting
When there are two sides of the coin to consider betting on, there’s a chance that an arbitrage play will be out there. In addition to the sports we have covered, arbitrage could work for:
It could also work on individual sports for head-to-head matchups, such as:
For arbitrage to work successfully, it all comes down to the numbers. When you scan the odds at multiple books, make note of the contests in which there are some pretty decent discrepancies between operators. These are the ones that are worth investigating further as potential arbitrage plays.
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The math behind arbitrage betting
To be successful with arbitrage betting, you need to be on point with your numbers. There are no shortcuts around this. If the math doesn’t work, then you’ll lose money. Period.
Before pulling the trigger on an arbitrage play, you have to make sure that the potential profit is greater than the stake amount you are using on the two sides.
To calculate the potential return on standard moneyline wagers, remember this simple rule.
- Negative odds tell you how much you have to risk to win $100 – i.e. bet $110 at odds of -110 for a potential profit of $100.
- Positive odds tell you what the return will be on winning $100 wagers – i.e. bet $100 at odds of +115 for a potential profit of $115.
There are also two formulas you can work through to determine what the return would be on bets that break in your favor.
- Negative odds: Amount of wager/(Odds/100) = Return
- Positive odds: Amount of wager * (Odds/100) = Return
For both formulas, you begin inside of the parentheses and work your way out. In formula one, it’s the odds divided by 100. Once you have that result, divide the stake amount by that number. For formula two, you do the same on the first part, but then multiply the result by the wager amount.
There are also plenty of online betting calculators that are completely free to use. Several of the better ones will also help you out with calculations for arbitrage scenarios.
The pros and cons of arbitrage betting
Arbitrage betting is an interesting concept, as you can basically scrape out some profits by simply zeroing in on market inefficiencies. Here are a few of the top positives:
- Lock in profits regardless of result
- Line shopping can point out potential profit spots
- Can be a solid tool to generate returns while boosting bankroll
Naturally, there are also some potential downsides to arbitrage betting:
- Can be time consuming
- Math has to be on point or you’ll lose money
- Sportsbooks frown on the practice
In short, for those who have the time to hunt for opportunities, arbitrage could be a welcome addition to an overall betting strategy. If you don’t fall into this camp, then keep arbitrage betting in mind as something that may be worth exploring down the road.