Sports Betting Arbitrage Guide

Having trouble trying to predict the outcome of sporting events?

Almost everyone has placed a wager on a sporting event, but most people have never heard of sports arbitrage. With the right tools, knowledge and bankroll you can start arbing the sports betting markets and carving out a respectable profit with very limited risk.

What is Sports Arbitrage (Sure Bets)?

Rather than betting, sports traders look for arbitrage opportunities in the market everyday. Arbitrage is when a trader can bet on all outcomes of a betting market at different sportsbooks to guarantee a profit after calculating all of the costs (fees) of the wager.

Let’s take a look at an example, as it’ll be easier to understand if you’re confused (Note: I’ll be Rounding Numbers).

• Sportsbook “A” Odds: Lakers +150 (2.50) vs. Heat –200 (1.50)
• Sportsbook “B” Odds: Lakers +121 (2.21) vs. Heat –135 (1.74)

When working with arbitrage bets you should use decimal odds, which I’ve put in brackets above. The best way to imagine an arb is to calculate how much you have to bet to win $1000. To do this you divide the amount you want to win (1000) by the decimal odds.

• Sportsbook A: Lakers = ($1000 / 2.50 = $400) & Heat = ($1000 / 1.50 = $667)
• Sportsbook B: Lakers = ($1000 / 2.21 = $452) & Heat = ($1000 / 1.74 = $575)

As you can see, if you add up the outlay to bet the Lakers at Sportsbook A and the outlay to bet on the Heat at Sportsbook B ($975) you’ll see that it’s less than the winnings ($1000). No matter what team wins the game you would profit $25 on your $975 stake.

How to Calculate Your Return on Investment (ROI)

• Return on Investment (ROI) = Profit ($25) / Total Outlay ($975) x 100 = 2.6%

You may think that a 2.6% risk-free arbitrage bet is small, but when you can place these bets daily it adds up. Most arbitrage bets will be in the 1% to 5% range in terms of ROI. You may find some that exceed 10%, but in most cases expect to earn a 1% – 5% ROI.

How to Calculate Arbitrage Percentages

• Arbitrage Percentage = 1 / Decimal Odds x 100

In our example the calculations for the Lakers are 1 / 2.50 x 100 = 40% and for the Heat 1 / 1.74 x 100 = 57.5%. The total percentage (97.5%) equates to how much of your potential winnings ($1000) you have to outlay ($975) in order to guarantee a profit.

Calculating Profits From an Arbitrage Trade

I showed you above how to calculate the profits of an arbitrage trade when you know how much you want to win on both bets, but in some cases that calculation won’t work. Let’s say you want to trade $3000 on a game and want to know your potential profits.

For this, we need to know how much of our outlay (%) has to be bet on each side of the trade.

To do this we use the following formula (Bet Percentage / Arb Percentage x 100).

• Lakers: 40% / 97.5% x 100 = 41% / Heat: 57.5% / 97.5% x 100 = 59%

Now that you have these two percentages you can find out your potential profits on any type of trade.

Let’s say that you wanted to trade $3000 on this arb opportunity. To find out how much you have to bet on each team you need to multiply our new percentage by the amount you wish to trade.

• Lakers: (41%) 0.41 x $3000 = $1230 / Heat: (59%) 0.59 x $3000 = $1770

If you want to calculate your guaranteed profits you multiply the bet amount by the decimal odds.

• Lakers: $1230 x 2.50 = $3075 / Heat: $1770 x 1.74 = $3080

The calculations above are intended to teach you the formulas, but once you start arbitrage betting you can use online calculators to perform the work. All you do is enter a set of odds and the calculator will do the rest of the work much quicker than you or I can.

Potential Risks When Arbitrage Betting

By definition arbitrage is a risk-free way to profit off differing prices in the markets, but there are still potential risks.

1. Missing the Trade: The most costly mistake is missing the trade at the second bookmaker because you were to slow to act after placing your bet at the first bookmaker. Most trades are available for fewer than 10-20 minutes.
2. Bookmaker Rules: Know the rules at your bookmaker! If SB #1 grades tennis after the 1^st ball is served and SB #2 grades after the full match it isn’t smart to arbitrage between these bookies, as 1 side of the bet could lose and 1 could push.
3. Bookmaker Limits: Soon after you start placing arbitrage bets you’ll experience a bookmaker limiting your account or in some cases closing your account. Don’t worry, you’ll be paid, but you won’t be able to use that sportsbook in the future.

Sports Betting Arbitrage FAQ

I can’t list everything in this guide, but I want to leave everyone with some more information to consider. In order to effectively arb at online sportsbooks you need to be able to have a suitable method to fund your bookmaker accounts that doesn’t incur high fees.

When you’re only making 1% – 5% per arb you can’t afford to have transaction costs that’ll eat up all of your profits. Initially for the first few months’ bookmaker bonuses will increase your profits, but bonuses don’t last too long and you need to remain profitable.

You’ll have noticed that I rounded to whole numbers in this guide. The reason I did this is because you should always round to the nearest whole number when placing these trades. If you don’t the bookmaker will know that you’re an arbitrage trader instantly.

Think of it this way, who would bet $729.56 on a team to win instead of $730? Most bookmakers will still notice that you’re placing arb trades quickly, but you’ll get more shelf life out of your account by round numbers and making them look as normal as you can.

Lastly, make sure that you utilize a few of the arbitrage software providers. They find arbitrage opportunities in real-time and notify members. Once an arb is released you still have to be quick to get down on the trade before other traders move the odds.