Every gambler is looking for an edge to make that bet that will pay off in the hundreds of thousands of dollars. But where does the gambler get the edge? Most times, it comes from information in the form of a tip, inside information, or public information that is used as an advantage. At MyTopSportsbooks, we want to share all the information you need for sports betting based on qualified bets on your favorite sports based on the knowledge that leads to cashing winning betting slips. Today’s subject is arb betting or arbitrage betting for the uninitiated in gambling parlance. We will break arb betting down and provide an education of sorts for the betting strategy that is dicey at best. First, we will define the term arbitrage and then connect it to a gambling strategy.
What is Arbitrage?
For the clinical definition, we go to the Harvard Business School to enlighten us as to the meaning. “In the world of alternative investments, you can employ several strategies and tactics. These strategies often differ from the typical “buy and hold” tactics leveraged by most long-term stock and bond investors—and are usually more complicated.”
Arbitrage is an investment strategy that sees investors buy and sell assets in different markets to take advantage of the price differences in the different markets to turn a profit. Price differentials are generally small and don’t last long, but the payoffs can be astronomical when volume purchases are made.
Is arbitrage betting a Guaranteed Profit?
Arbitrage betting, or to the sharps ‘arbbing’, is a strategy employed to pick winning bets. The betting sequence works because the gambler places bets on all the possible outcomes of a sporting event, which guarantees a profit or a payout on the outcomes chosen. If you bet on a tennis match, you bet on both players winning the match or NFL teams in betting markets with bookies.
This is an example of arbitrage. If you lay bets on soccer, you must place three different bets for sports arbitrage. One bet on each team to win (two bets) and one bet to tie (the most likely outcome for evenly matched teams). To find the opportunity, gamblers will often use their bankrolls at different online books where they can find favorable odds and lines that will return a profit margin when they bet both sides of the wager. For the NFL betting markets and NBA betting, or even the NHL, it is a binary bet on different outcomes that will yield the payout that all arbitrage bettors thirst for. The profit on the bet is calculated through what the gambler believes is the right combination of different odds that lead to the calculated risk known as the bet. In the betting industry, this is known as arbitrage opportunities.
When do Arbitrage Opportunities Occur, and How do I Take Advantage of Them?
Bookmakers/oddsmakers calculate the probabilities of winning and losing bets. When they err and incorrectly calculate the balance of probabilities, an arber finds the best odds on betting sites to make bets that they believe will turn a profit in their investment strategy. There are two circumstances where bookmakers/oddsmakers may whiff on the balance of probabilities. Many casinos handle arber bets, Fanduel, BetMGM offer promo codes to get arbers in the game.
When the bookmaker misses changes that happen in real time, that can change the balance of probabilities. In some sports, like the NBA or tennis, the odds change by the second, so the reaction time of the oddsmaker must keep up with the changes in the different lines on offer. When the oddsmaker doesn’t, the book takes a beating.
Setting the Odds
The first thing to understand about online sports gambling is it very competitive for retaining current bettors and attracting new bettors to the sportsbook. To get a gambler’s attention, the odds must be higher than they usually would to get them to make bets. The theory is to lose one to the bettor and get them on the many other bets they will make down the line. Fighting for market share means the odds are ratcheted up to control the betting herd at a specific sportsbook.
The opportunity for an arbitrage bet can occur when one oddsmaker sets the odds differently, or a group of bookmakers at different sportsbooks make the same mistake.
How do I Calculate Arbitrage Odds? Arbitrage Calculator
Arbitrage % = (1 / decimal odds for outcome A) x 100) + (1 / decimal odds for outcome B) x 100).
Arbitrage Betting and Moneylines, How it Works
Arbitrage betting is considered risk-free because you are taking both sides of a bet, and it is generally used in conjunction with the Moneyline. On the Moneyline, you contrast your winners against your losers, and you can identify potential profit when you break down the numbers. It starts by shopping around different sportsbooks to find gaps in the odds to place your arb bets. You need the best favorite and underdog odds from two sportsbooks to hedge your bets.
Formula Positive Odds
Multiply the answer by 100 to make it a percentage.
Formula Negative Odds
The double-negatives change the formula to 115/115+100=0.534