What is Arbitrage? Arbitrage Explained in 2 minutes

Arbitrage is the name for a system of betting which seeks to guarantee a profit from any bet involving two parties – such as football teams or tennis players – by placing bets on both at different odds. In simple terms, arbitrage means betting on both picks to win, but choosing the amounts wagered so that, no matter which wins, a profit on the stake will be the result.

How is Arbitrage Used in Sports Betting?

Although the best and simplest means of explaining arbitrage is to use just the example of two picks, more experienced bettors can use arbitrage across a range of bets to back and lay in a live betting situation as the odds shift and change. In the majority of cases, placing bets on all possible outcomes of a sporting event would guarantee a loss, rather than a profit, but the key to successful arbitrage is to back the same event with a range of bookmakers offering different odds. Although the odds across multiple bookmakers tend to settle at a certain consistent level, differences can sometimes occur. This is usually because different bookmakers have differing opinions of a contest, one bookmaker is offering enhanced odds as part of a promotion, or a bookmaker is slow to change the odds during play, as the likeliest result shifts.

An example of arbitrage:

A bettor has a stake of £100. Andy Murray is playing Roger Federer. Bookmaker A has Murray to win at odds of 9/25, bookmaker B gives odds on Federer of 9/2. A bet of £80 on Murray with bookmaker A would, if Murray wins, produce winnings of £108.80 and a profit of £28.80. A bet of the remaining £20 on Federer with bookmaker B would lead, if Federer wins, to a return of £110 and a profit of £90. Thus, by seeking out the right odds and acting quickly, a clever bettor can guarantee a profit while betting on a specific event no matter what the outcome. It should be noted, however, that using arbitrage effectively will require multiple online betting accounts, and the ability to calculate the odds and what they will pay out for various sizes of bet. Bearing this in mind it is likely to be something which most bettors will resist trying until they have a degree of experience.

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