How To Arbitrage Bet

Arbitrage betting (also known as a "surebet" or “arb”) is a risk-free opportunity to make a guaranteed profit on a particular sporting event or betting market. When arbing, you are essentially exploiting differences in odds being offered between a number of bookmakers, typically two. The difference in the odds being offered is so pronounced, that you have the opportunity to make a profit no matter what the outcome.

What Is Arbitrage Betting: Examples Of Surebets

Let's take a look at two arbitrage betting examples. Example one, we encounter the following scenario:

Balanced Odds

Andy Murray is playing Novak Djokovic in a Wimbledon Final.

Here we find a perfect arbitrage opportunity. If we simply place £100 on Murray to win and £100 on Djokovic to win, we are guaranteed a profit, in this case a profit of £10.

Let's say that Djokovic wins. Our returns would be:

Unbalanced Odds

The above example was simple. But arbitrage opportunities are not always easy to identify. In the example below, the Chicago Bulls are facing the Cleveland Cavs in a NBA game:

This situation is a bit trickier. How can we calculate an arbitrage bet?

How To Calculate A Surebet

Calculating an arb with an arbitrage betting calculator is easy. But let's look at the calculations involved to help us develop a deeper understanding of the dynamics involved in an arbitrage betting opportunity.

There are two key questions when it comes to arbitrage betting:

#1 - How do you know if you have identified an arbitrage opportunity?

#2 – How much should you stake in order to secure your guaranteed profit?

Finding An Arbitrage Bet Opportunity

Similar tocalculating the bookmaker's margin (or commission) on a given betting market, we identify an arbitrage opportunity by adding the implied probabilities of the best betting odds available for each outcome. To calculate the implied probability for each outcome, we simply divide the odds for that outcome in decimal format by 1.

So let's then look at our simple example of Murray vs Djokovic from earlier in this article.

implied probability = 1 / 2.10

= 0,476 = 47.6%

So the implied probability of Murray's odds of 2.10 is 47.6%.

Let's now consider Djokovic.

implied probability = 1 / 2.10

= 0.476 = 47.6% 

To determine if we have identified an arbitrage betting opportunity and a guaranteed profit, we simply add the two implied probabilities together.

Total: 47.6% + 47.6% = 95.2%

When the implied probability for a given betting market adds up to less than 100%, it is an opportunity to make a sure profit. The lower the value below 100%, the more worthwhile the arbitrage bet is and the greater the profit we can make. In this example the market is well below 100%. 

So lets then take a look at Cleveland vs Chicago in our NBA example. Have we identified an opportunity to arb?

implied probability = 1 / 1.20

= 0.833 = 83.3%

implied probability = 1 / 8.00

= 0.125 = 12.5% 

= 83.3% + 12.5% = 95.8% 

Again, we have identified the chance to make a sure profit as the market is again well below 100%.

How To Calculate Stakes For A Guaranteed Profit

This question was easy to answer in our Murray vs Djokovic example. As both have the same odds, we simply bet the same amount on each outcome to guarantee our profit no matter who wins the match.

But more often than not, arbitrage bets are not this simplistic. Typically we will need to weight our staking according to the odds of each outcome. How do we do this?

#1 - Calculate the implied probabilities of all possible market outcomes

#2 - Calculate the sum of the probabilities of all possible market outcomes

#3 – Divide the implied probability of each individual outcome by the sum of all probabilities

In this way we can determine the correct amount to bet to achieve our profit.

Example: Cleveland vs Chicago

We calculate the implied probability of each outcome and add them together just as we previously did.

implied probability = 1 / 1.20

= 0.833 = 83.3%

implied probability = 1 / 8.00

= 0.125 = 12.5% 

= 83.3% + 12.5% = 95.8%

Now we calculate how much to bet on each outcome by dividing the implied probability of each outcome by the total market probability.

= 83.3% / 95.8%

= 86.952%

= 12.5% / 95.8%

= 13.048%

So in this example, if we wanted to arb a total of £1,000, we would place 86.952% of our £1,000 on Cleveland at odds of 1.20 and 13.048% of our £1,000 on Chicago at odds of 8.00. Now we will win the same amount no matter who wins the game, Cleveland or Chicago. 

Let's walk it through:

We want to stake £1,000 in our arbitrage bet.

£1,000 * 86.95% = £869.52 on Cleveland at odds of 1.20

£1,000 * 13.05% = £130.48 on Chicago at odds of 8.00 

So now, no matter who wins, we are guaranteed a profit of roughly £44.

Applying Our Calculation To Other Markets

We have only considered betting markets with just two outcomes, team A wins or team B wins. But what about a football 1X2 market or even a horse race featuring 12 runners? Well the principles remain the same.

#1 - Calculate the implied probabilities of all possible market outcomes

#2 - Calculate the sum of the probabilities of all possible market outcomes

#3 – Divide the implied probability of each individual outcome by the sum of all probabilitie

Let's say we have an upcoming Premier League match between Manchester City and Arsenal. We are looking here at the 1X2 betting market. We have three possible outcomes:

Let's see if we have an arbitrage opportunity. As we did in our previous examples, we calculate the implied probability for each individual outcome.

implied probability = 1 / 2.80

= 0.3571 = 35.71%

implied probability = 1 / 3.60

= 0.2778 = 27.78%

implied probability = 1 / 3.20

= 0.3125 = 31.25%

We then add each probability to come up with our market total.

= 35.71% + 27.78% + 31.25%

= 94.74% 

Great news! As the market total is below 100%, we have identified an opportunity to make a guaranteed profit. We now need to work out how much to stake on each outcome to guarantee the same profit no matter the outcome. Let's say we want to stake a total of £500.

= 35.71% / 94.74%

= 37.693%

So we will stake 37.693% of £500, a total of £188.47 on Manchester City to win. 

= 27.78% / 94.74%

= 29.323%

So we will stake 29.323% of £500, a total of £146.62 on the Drawn match. 

= 31.25% / 94.74%

= 32.984%

So we will stake 32.984% of £500, a total of £164.91 on Arsenal to win.

If we bet each of these amounts, we will be guaranteed a profit on the match of roughly £28 no matter what happens.

 Arbitrage Excel Surebet Calculator

We've made calculating arbitrage bets all the easier with our arbitrage excel calculator. The bettingexpert arbitrage calculator in Excel will not only tell you if a certain betting market is offering you the chance to make a guaranteed profit, but will likewise tell you exactly how much to bet on each outcome to guarantee yourself that profit. Here's how:

Download the bettingexpert Arbitrage Excel Calculator now.

Step 1 - Choose your preferred odds format by clicking on one of the tabs at the bottom of the sheet. Sheet 1 calculates decimal odds, sheet 2 calculates American odds (also known as 'Moneyline' odds) and sheet 3 calculates Fractional odds.

Step 2 - In the Amount To Arb With cell, enter the amount of money that you wish to invest in your “Arb”. As you are looking to earn a guaranteed profit, there really is no risk. However you likewise don't want to tie up your entire betting bank in a single Arb.

Arbitrage Excel Spreadsheet

Step 3 – Enter the best odds available for each possible outcome into Outcome cells. The bettingexpert Arbitrage Calculator allows you to enter odds for events with up to 12 outcomes.

Arbitrage Excel Spreadsheet

Step 4 – Have you identified an arbitrage opportunity? The percentage figure in the Market cell tells you. If the Market is above 100%, then no, there is not an opportunity to earn a guaranteed profit. If the Market is below 100%, boom, you've found yourself an opportunity to make a risk free profit.

Arbitrage Excel Spreadsheet

Step 5 – Once you have done so, the Amount To Bet column will tell you the exact amount to bet to earn your guaranteed profit, while the Guaranteed Profit cell will tell you exact what that profit will be. Want a higher profit? Simply increase the amount you wish to arb with.

Arbitrage Excel Spreadsheet

Practical Problems In Arbitrage Betting

#1 – Limited Opportunity In Limited Time

In the Internet age, in most cases, it only takes up to 15 minutes until an arbitrage opportunity disappears. Spatial distance has no meaning on the Internet. This is of course an issue if you are hoping to make regular profits from arbitrage betting.

#2 - High turnover, low profits

Another issue is the diminutive size of typical returns. In almost every arbitrage betting opportunity you will earn a relatively small profit from each transaction, a return of more than 3% on your investment will be a rare event. So while this gain is almost certain, you have to consider the rare nature of Surebets. This means you need a lot of capital to invest in each opportunity, to justify even the high expenditure of time.

#3 - Be careful with high stakes

Even if you have a large amount of money to invest, another problem soon arises. Few bookmakers are as transparent as Pinnacle are regarding their bet limits. Almost all other bookmakers accept large bets only when they are checked and waved through by a manager. So there is a real risk that one of your bets will not be accepted.

Is it worth arbitrage betting?

If you see the opportunity for arbitrage bet, then you should take it. But the competition is very tough these days. A few years ago it was quite possible to earn a livelihood with surebets, but it's become much more difficult in recent times.