Arbitrage is trading that profits from different prices for the same commodity in different markets. In sports betting we find that there are many different bookmakers and exchanges online all offering odds on various forthcoming sporting events. Not surprisingly I think, is the fact that the prices quoted are not all the same across the board. Most bookmakers employ people to check out the sporting events and try to determine what the odds for each and every contender and market in each and every event should be. Obviously this is a massive undertaking and the betting exchanges employ technology to see where the money is going at certain odds and so build up an overall picture.
| Rank | Name | Notation | Details | Discover |
 |
The number one Betting Exchange. 5% fees on winning trades. The highest liquidity. | Visit | ||
 |
Access to Betfair liquidity with a 3% fees on winning trades. Not all markets. | Visit |
It is likely that bookmakers also take notice of Betfair prices when fixing their own odds, and certainly if you watch the odds for horses during a day then you find that if odds on a horse at Betfair shorten significantly then the bookmakers soon all follow suit. However there is often a disparity between many bookmakers odds for a particular event at any given time and this can be exploited by means of arbitrage.
Traditionally arbitrage betting was done by being signed up to many different bookmakers and then trawling through all the odds on offer at each one to find a worthwhile difference in odds that could be exploited.
If, for example, you could find odds on a forthcoming tennis match for one player of £100 to win at odds of 1.42 then you would receive £142 back if the bet was successful. If another bookie was offering good enough odds on the same match for the opponent, say 3.9 then you would have a potential “arb” situation since you could also place a £36.40 bet at those odds to receive a similar win amount. So you would profit by £5.6 whichever player won! This is because your total stake is less than the guaranteed win amount whichever player won.
Unfortunately bookmakers do monitor their customers carefully these days and are somewhat averse to “arbers” who cost them money, so they are likely to quite quickly limit or ban such an account. This means that you would soon have to switch bookmakers and eventually run out of places to take your bets. Being limited or banned is called being “gubbed” in betting circles.
Having your account limited or banned is a problem with arbitrage betting or “arbing”. There are however, some ways around this. You can of course open another bookmaker account in the name of your spouse or close relative who does not need it themselves. Bookmakers do however, use tracking on the internet these days and are likely to spot another account from the same IP address as well as the same home address.
A useful way around the problem is to use a betting exchange as well as bookmakers. You then use a bookmaker for your back bets and lay back the bet at an exchange for a lower price. This can only be achieved though if the Betfair exchange odds are lower than the bookies and usually they are higher. However with horse racing it is not uncommon for horse odds to drop significantly on occasions through the day as certain horses are seen as potential winners by more and more punters putting their money on. In order to find these situations though you probably need a suitable software which constantly surveys the bookies and exchange markets to throw up discrepancies. There is the Oddstrawler as such a service and one or two other types of apps that you can use for this.
Another clever way of utilising the arbitrage phenomenon is by backing all the runners in a race where there are only a few runners, where the over round is low, and using “best odds guaranteed” or BOG bookmakers because they will pay out at higher odds if a horse should drift in the market and then go on to win. This does happen and as long as the over round is not too high, i.e. less than 105% then it can be profitable. The over round is the percentage skimmed off by the bookies and you are going to forfeit this anyway so you do not want to lose more than £5 for every £100 staked since this is an expense which needs to be covered by your winning profits. It can be somewhat tedious getting all your bets on at suitable odds at different bookies with this method but there is an online service called Oddscatcher to simplify things. Whether it is worth the monthly subscription I am not sure. If you restrict your bets to say only four runners or less then your work load is considerably lessened but of course, there are fewer such races available each day.
It is possible to make money with arbitrage betting and increase an initial bank but although it is perfectly legal it is difficult to avoid being repeatedly limited by bookmakers. Also, you do need a fair sized initial bank in order to make reasonable profits, of say up to 15% per month, and you need to avoid making mistakes when placing bets. Sometimes the odds will change before you can complete an arb so you have to be ready for this, and occasionally a bookie can avoid paying out on a palpable error when their odds posted were so out of order that there was obviously a mistake and therefore the bet is voided.
There is no doubt that you need to be the patient type of personality to really exploit the arbitrage betting scene. It is not quite as easy as some would make it out to be...
If you have more questions, contact me [email protected]
