Introduction to Arbitrage Betting
Arbitrage bets are an excellent way to lower strategy and we'll explain to you the maths behind arbing. Calculating arbitrage bets between bookies and exchanges may also maximise your potential profit in football betting.
Arbitrage in sports betting is the method of placing bets on every outcome of an event at odds that guarantees profit regardless of the event's end results.
Arbitrage Opportunities
In short, a fair market is usually priced at 100% based on the chances of an event occurring. However, bookies will price their odds to go beyond a 100% chance, thus giving them an edge.
Arbitrage opportunities work the opposite, where a bettor bets on all eventualities across many betting providers. This allows them to take advantage of the price differences and make the sum of the odd’s probabilities below 100% - which is in their favour.
2 Ways to Calculate Arbitrage and Increase Your Winning Chances
It is crucial to understand the maths behind arbitrage betting before starting an arbitrage bet. Let's start with the arbitrage calculator, a helpful free tool if you need to calculate your arbs quickly.
Arbitrage Bets between Two Bookies
Let's get straight into the example – there's a matchup between Manchester United vs Chelsea, and you've managed to track down two interactive sportsbooks with odds for this event.
The first bookie offers odds of 1.30 for Chelsea to win and 3.70 for Man United to win. The second one offers 1.40 odds for Chelsea and 2.90 for Manchester United to win.
Next, you need to place a stake for Man United on the first bookie and make another stake on Chelsea for the second sportsbook. This means that you need to crossmatch the prices offered in this specific event. Note that for arbitrage betting, you need to ensure that your bets will be proportional to the odds value. It's essential to estimate the implied probability – to do this, simply divide 1 by the odds value and multiply the result by 100. So, to calculate the implied probability for Manchester United's odds, we'll need to divide 1 by 3.70. This means that it stands at 27.02%. However, we'll receive the implied probability at 71.42% for Chelsea. All you need to do is put together the values to figure out whether you've spotted an arbitrage betting market and whether you should take the risk.
As long as your value doesn't go over 100%, those options are worth it. We can see that our previous example is beneficial as the implied probability of this market stands at 98.40%.
If you want to bet as much as $100, you'll need to multiply your overall stake by the implied probability of each bookie to estimate your arbitrage bet size. Then, you'll need to divide the value you have by the value of the market margin combined. The formula for this should look like this:
(The amount intended for football bets x the implied probability of the sportsbook) / the total market margin)
So, returning to our first example, when choosing your stake on Man United, you need to bet as much as $27.44. On the other hand, betting on Chelsea will require you to bet $72.55.
Arbitrage Bets between a Bookie and Exchange
Another way you can estimate your arbitrage bets is between a bookie and an exchange. Like previously, you'll get the chance to bet on a specific event, but the biggest difference is that you're allowed to buy or back the outcome. The opposite is also possible, which is to sell or lay it in to boost your profit or minimise losses.
Let's take a match between Liverpool and Arsenal as an example this time. The odds for Liverpool to become victorious are at 2.20, while the odds for Arsenal are at 1.90. First, we need to calculate the implied probability – the first case is at 45.45%, while the second stands at 52.60%. Therefore, putting together these values gives us a total market margin of 98%.
Now, let's check out the odds for Liverpool. Suppose the lay price for the team is 2.20 to win the match. With the exchange, betting that Liverpool will lose is 1.86. This will get the market margin at 99.21%, which is an excellent opportunity for an arbitrage bet.
The formula you need to use is as follows:
(Lay price x back bet) / (current lay odd’s value – exchange commission)
Thus, for a $100 stake and the 0.02 exchange commission, your lay stake would be at $118.25.
Conclusion - Maximize Your Opportunity with Arbitrage
Arbitrage betting is indeed worthwhile, but remember to keep your expectations realistic. This is why bettors need to remember that these opportunities don't come by often and shouldn't expect massive rewards every day.
If you are looking for long term success in football betting, it would be best if you don't entirely depend on arbitrage betting as the only approach for betting in football.
