Arbitrage Betting Explained

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Arbitrage betting is a betting strategy that goes against most of what we know about betting, promising risk-free returns, which explains why it’s considered the Holy Grail of gambling. Naturally, it’s a hot topic of discussion among bettors, and anyone who is serious about betting on sports or esports should know about it.

But how arbitrage betting works, what is it, and how can you use it? We’ll lay out everything you need to know in this guide, where we take a closer look at how you can beat bookmakers and make extra money without any risk.

What Is Arbitrage Esports Betting?

Arbitrage betting is a form of betting that allows you to place multiple bets with a guaranteed profit. It might sound too good to be true, as there is no such thing as a risk-free bet, but if you understand how esports betting odds work, what they mean, and ultimately, how you can use betting odds in your favor, then arbitrage bets will start making a lot more sense.

Arbitrage Esports Betting

As with any risk-based activity, you must first consider the price difference. A simple example is – if you can buy an item from Shop A for €10 and sell it to Shop B for €15, then you can pocket 5€ without any risk. This simple principle is used by investment banking and other industries, granted in a much more complex form.

Arbitrage betting follows the same logic and is used by many bettors seeking risk-free profit by taking advantage of price (odds) differences across sportsbooks and betting exchanges.

Example Of An Arbitrage Bet

Although the explanation of which principle arbitrage betting follows is fairly simple, the best way to understand how arbitrage betting strategy works in practice is by looking at an example.

Let’s look at an example of the betting market offer on a match between G2 Esports and Fnatic on two bookmakers who offer different odds on the game.

Bookmaker G2 Esports Fnatic Margin Stake Profit
Bookmaker 1 1.300 3.930 102.4% 26.54 4.30
Bookmaker 2 1.42 2.900 104.9% 73.46 4.31
Arbitrage 1.42 3.939 95.9% (+4.1%) 100

To understand how arbing works, you must first understand margins, which is essentially a number representing the edge in the bookmaker’s favor. You don’t have to memorize how to calculate the profit margin since there are many online calculators that will do the job for you, but it’s wise to understand how we get the number and what it means.

Margin = (1/decimal odds Option A) x 100 + (1/decimal odds Option B) *100

If we wanted to calculate the margin of Bookmaker X, we would insert the offered odds on G2 Esports (Option A) and Bookmaker 2 (Option B) into the formula:

Margin Bookmaker 1 = (1/1.300) x 100 + (1/3.930) x 100 = 76.92 + 25.445 = 102.4%

Margin Bookmaker 2 = (1/1.42) x 100 + (1/2.90) x 100 = 70.422 + 30.48 = 104.9%

Total arbitrage percentage = (1/1.42) x 100 + (1/3.93) 70.422 + 25.445 = 95.867%

A positive margin represents the edge a bookmaker has over you (2.04% and 104.9%), whereas a negative margin represents the edge in the bettor’s favor.

By cross-matching the odds of G2 Esports at Bookmaker 2 and Fnatic at Bookmaker 1, the margin (or total arbitrage percentage) shows 95.9% or +4.1% in our favor, showing an arbitrage opportunity. But importantly, your stake needs to be proportional to the odds.

Arbitrage Esports Betting

To calculate the stake needed, you need to multiply the total amount you intend to bet with the individual arbitrage percentage and divide the result by the total arbitrage percentage. For this example, we’ll assume that you’re ready to stake 100€.

Stake = (Total stake x individual arbitrage percentage) / total arbitrage percentage

Stake on G2 Esports = (100 x (1/1.42) / 95.9% = 73.46

Stake on Fnatic = (100 x (1/3.93) / 95.9% = 26.54 = 26.54

Now that we know how large our stake in each selection should be, we can calculate how much money we can earn – by multiplying the stake by the odds.

Return = stake x odds

Return on G2 Esports = 73.46 x 1.42 = 104.3

Return on Fnatic = 26.54 x 3.93 = 104.31

The idea behind arbitrage betting is to place bets on both possible outcomes with favorable odds, where you will make a profit no matter the outcome. In this example, we saw that a bet on G2 Esports will earn us 104.3, while a bet on Fnatic can earn us 104.31.

So if G2 Esports end up winning, the bookmaker will pay us 104.3. So to get the total profit, we have to deduct the amount of money we’ve stakes, which will include 73.46€ on G2 and 26.54€ on Fnatic, leaving us with 4.3€ of profit.

Profit = total return – total stake

Profit = 104.3€ – (73.46€ + 26.54€) = 4.3€

If Fnatic wins, we use the same formula:

104.31€ – (73.46€ + 26.54€) = 4.31€

All those calculations might seem very complex, but once you understand the idea behind it, it becomes far simpler. Moreover, you can easily find an arbitrage calculator for free online, which will speed up the process of figuring out the best

How Do You Find Arbitrage Opportunities?

To know how to find arbitrage opportunities and how to use esports arbitrage betting, you first need to understand how these opportunities occur. And there are three key reasons why arbitrage betting is possible:

  • Betting sites are slow to adjust the odds.
  • Betting sites make a mistake when setting the odds.
  • Betting sites have different opinions on which odds to offer.
  • Bookmakers are running promotions.

As we’ve established, arbing is all about finding odds discrepancies across several bookmakers and using them to our advantage. Since there are countless betting markets and many esports titles you can bet on, finding arbing opportunities can be difficult, but that’s where odds comparison sites come in.

Even though you can find esports arbitrage betting opportunities on your own, most arbitrage bettors use an odds comparison site, making the process much easier and smoother. The sites will compare offered esports or sports betting odds across different bookmakers (and even compare the odds on a betting exchange) to find the gaps and arbitrage betting opportunities.

Drawbacks Of Arbitrage Betting

By now, you should understand how arbitrage betting works – at least the part that guarantees profit with no risk involved, no matter the possible outcome – so you must be itching to try it out. But not everything is as straightforward as it may seem, as there is no such thing as free money.

Although arbitrage betting will mathematically guarantee a profit, there are some drawbacks every bettor should know about.

Bet Cancellation

One of the main reasons you’ll be able to find a chance to place an arbitrage bet is that esports betting sites will sometimes make a mistake when setting the odds. Although the mistake is on the bookmaker and not on the bettor, the betting sites can easily cancel the bet, which would leave you exposed on the other side of the bet.

If you place an arbitrage bet (or sure bet) on G2 Esports at Bet365 and Fnatic at William Hill, but then Bet365 cancels the bet because it has offered the wrong odds, you better hope that Fnatic wins, else you will lose money.

The best way to battle this situation is to check the rules of the bookmakers you have betting accounts with and intend to use for arbitrage betting.

Account Limits And Closure

If you’re wondering whether arbitrage betting is legal, the answer is yes, but bookmakers don’t like you doing it. Any bookmaker that catches you arbing can close down or limit your betting account, preventing you from placing a sure bet.

Account Limits And Closure

Notably, some betting sites won’t close or limit accounts for people who use arbitrage to win money, but the vast majority will. So while arbitrage betting can help you earn some “free money,” there’s a good possibility that you’ll get limited or have your account closed down, meaning no more guaranteed profits for you.

Complex Strategy

Arbing, as we’ve learned, is a fairly straightforward process, but to fully exploit it and earn more money, you’ll have to own betting accounts with more than a single bookmaker. Moreover, you’ll need a fairly large bankroll and enough time to find arbing opportunities, which is not too convenient for casual bettors.

Arbitrage Betting Explained

The potential profit arbing promises is tempting, but arbing also requires a lot of effort and organization. Admittedly, there are online services that will help you find arbing opportunities faster, but they all charge a fee, so you’ll have to ask yourself whether the time investment is worth it or not.

Time Sensitive

Arbing is all about exploiting the odds discrepancies and bookmakers’ mistakes, but since different sportsbooks constantly change odds, some opportunities to place a sure bet will only last for a few seconds.

Account Limits And Closure

So unless you’re very fast when placing bets and can do so without any errors, you’re bound to run in situations where an arb opportunity will come and go within seconds. Even software that helps you find arb opportunities can’t help you here, so while arbing does not have any mathematical risk, there is risk involved when it comes to the timing of when you place your bets.

Value Betting vs. Arbitrage Betting

Arbitrage betting and value betting are somewhat similar in the way that they work. Arbitrage, much like value betting, simply exposes where betting sites have incorrectly priced the market; hence they find value by betting on the wrong odds.

But the two approaches are still a bit different. With an arbitrage bet (or sure bet), you will make money no matter the game result since you’re betting on all possible outcomes. With value betting, you only bet on one outcome of the game; hence you can lose – but while the risk is higher, so are the rewards.

Typically, arbing offers a very small edge, and such bets won’t make you a lot of money. That’s why most esports or sports bettors prefer to instead use value betting, which has another advantage in that bookmakers won’t limit you as quickly as they would if you were arbing. Notably, bookmakers can still limit you if you win too much money, but that’s a story for another day.

Final Words About Arbitrage Betting

If you’ve read our guide to this point, you should now know everything there is to know about how arbitrage works and why it’s a popular strategy among sports and esports bettors. But before you start, you should set up accounts across multiple esports betting sites, so you’ll always have access to the best odds to use when placing bets on an esports match.

Moreover, it’s highly advisable that you find online arbing calculators, which will help you calculate the required stakes, and if you value your time, you should consider finding software that will compare markets across bookmakers and find arbing opportunities for you.

Arbitrage Betting FAQ

Is arbitrage betting legal?

Although arbitrage betting is not illegal, it’s viewed negatively by online betting sites, which don’t like their customers doing it. As a result, you could see your account limited or closed down if you’re found placing arb bets.

Will bookmakers suspend my account for arbing?

Even though arbing is legal, it’s not too uncommon for betting sites to close down or limit accounts of bettors who they suspect of arbing. Therefore, if you decide to start placing sure bets, you should be aware that your account might be limited/suspended.

Does arbitrage betting really work?

Yes, arbitrage betting works as a betting strategy that will guarantee you profits if used correctly, but there are some drawbacks to it. Even though is mathematically a sure way to make some money, in practice, it’s not as straightforward as it may sound.

Is arbitrage betting easy?

Arbing is a fairly straightforward strategy that is not difficult to learn or execute. However, while it’s not complex, it requires some time investment and effort to make it work. So even though anyone can make a profit from sure bets, only those who take it seriously can stand to make any meaningful money from it.

Can you use arbitrage in esports betting?

Yes, you can use arbs in esports betting the same way you can find sure bets betting on sports. Moreover, there are arbing opportunities across several markets, from moneyline, handicaps, totals, and anything in between. As long as you find wrongly priced markets, there’s a chance to place an arb.

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