Arbitrage Opportunities: Strategies to Capitalize on Your Sports Bets
If you’ve ever heard of someone refer to “risk-free betting” or “sure betting,” they’re referring to one of the sharpest strategies around: arbitrage betting.
While arbitrage betting takes time, dedication, and practice to execute effectively, it’s one of the most rewarding practices in sports betting. If done correctly, you’re assured to have a bigger bankroll!
In this article, we’ll stick to talking about two-way markets, like betting on the moneyline, totals, or against the spread. In each of these bets, there are only two possible outcomes. Read on to find out how arbitrage betting is possible, how to spot opportunities, and the best ways to calculate your stake size to maximize profits.
What Is Arbitrage Betting?
Arbitrage betting is all about spotting inefficiencies in the betting marketplace in order to guarantee profits. When bookmakers assign odds and probabilities to specific events, it’s not an exact science. There is a natural variance between sportsbooks due to the human element which is always present when odds are created.
Successful arbitrage betting is capitalizing on different odds on the same event at two or more different sportsbooks. Once you successfully recognize discrepancies in odds across different sportsbooks, you can wager on every possible outcome of a game in such a way that guarantees you a profit, no matter what!
Arbitrage betting is, technically, a form of hedging. While hedging requires taking an offsetting position later on (to either guarantee a profit or reduce risk), an arbitrage bet is when you bet on all prospective outcomes at the same time.
You’re not just protecting yourself from financial risk: You’re setting yourself up to make a profit no matter what.
How Arbitrage Betting Is Possible
Arbitrage opportunities arise when different sportsbooks assign different odds to the same event. This means that arbitrage betting is impossible without line shopping.
These opportunities arise in three different situations:
- When different bookmakers make errors in their odds, merely assigning the wrong odds to an outcome.
- When bookmakers have different opinions on the probability of an event.
- When sportsbooks adjust lines to attract equal action on both outcomes.
Remember, if sportsbooks make a particularly egregious error (think assigning an outcome +250 odds instead of -250), they reserve the right to void bets on that line. This doesn’t happen that often, but it will occur sporadically. After all, the bookmakers who input the lines are human, too. In the cases where bookmakers rescind their posted odds, arbitrage is no longer possible.
Recognizing Arbitrage Opportunities
Arbitrage opportunities are easy to recognize if you use American odds. If the positive American odds (any odds with a “+”) are higher than the negative American odds (any odds with a “-“), there’s an arbitrage opportunity. This could mean one outcome at one sportsbook is listed at +102, and the opposite result is -101. Of course, if one outcome is +102 and the other is +101, an arbitrage opportunity still exists.
Another way to think about it is to convert American odds into implied probability. If you translate odds into implied probability, add the implied probability of both outcomes together, and come out a number less than 100%, there’s an arbitrage opportunity.
For example, if both outcomes were listed at +110, they’d both convert to an implied probability of 47.6%. Added together, the implied probability would add to 95.2%. Because 95.2% is less than 100%, you’d know for certain that there is an arbitrage opportunity.
This might still sound confusing, so let’s use a practical example.
Arbitrage Betting in Action
In this situation, you could place $100 on both teams. If Pittsburgh wins at Bovada, you’re set to make $110, and lose the $100 you bet on the Capitals. If the Capitals win at BetOnline, you’ll net $110, while losing the $100 you bet on the Penguins. This will leave you with a guaranteed profit of $10.
Our example is a rare one, as it’s difficult to find a guaranteed 10% profit via arbitrage betting. Usually, profit margins are between 1-5%, meaning that bettors have to wager a lot of their bankroll to secure a sizeable profit.
For a seasoned sharp with a larger bankroll, profits will be much higher if they lay a bigger wager. Betting $5,000 on both sides of the event in our example would lock in a guaranteed $500 profit. That’s nothing to sneeze at!
If you can spot positive (+) American odds that are higher than negative odds (-), there’s an opportunity to guarantee yourself a profit.
Calculating Arbitrage Bets: Resources
Identifying arbitrage opportunities and calculating the size of your stakes can be difficult to comprehend. After all, it involves some fairly complex mathematical equations. Thankfully, there are some odds aggregators and arbitrage calculators that we can recommend to determine profit and recognize your best opportunity.
The Best Odds Checkers
Oddsportal.com is a fantastic resource and one that covers a vast amount of sportsbooks. They cover the “big four” American professional leagues (NHL, NFL, MLB, and NBA), but also have extensive odds coverage on niche leagues (eg. water polo). Odds are listed in decimal format.
This site is a great resource to get started with and can alert you of shifting odds on major events. That said, there’s no substitute for doing your own line shopping. Often, these sites can take a few minutes to update. To be successful means to react quickly, as opportunities can disappear in mere minutes—enough to ruin an arbitrage bet.
You might have recognized an arbitrage opportunity here and there, but how should you determine wager amounts on each outcome? The math can be tricky, which is why we recommend arbitrage calculators.
Pinnacle Sports has a great arbitrage calculator for moneyline formated odds.
Arbworld.net offers a useful and straightforward calculator for bettors who prefer to calculate odds in either decimal or fractional formats.
Get Started Today!
Arbitrage betting can be tricky to execute successfully, so make sure you read our guide on avoiding infringement from your sportsbook before you get started. It’s essential to avoid detection and fly under the radar.
Because your profit margins on arbitrage betting are often so slim, make sure you’re well-versed on how to maintain and manage a healthy bankroll before diving into the world of arbitrage betting.