What is arbitrage betting?

One example

A tennis match has two outcomes. Bookmaker A offers 2.10 on the first player. Bookmaker B, pricing the same match on its own, offers 2.05 on the second. You have 1,000 to stake and split it like this:

One of the two players wins. Either way about 1,037 comes back on the 1,000 you staked: a profit of roughly 37, or 3.7%, decided before the first serve. That is an arbitrage bet, usually shortened to "arb" and sometimes called a surebet.

You did not predict anything. You bought both sides of one event at prices that, between them, were too generous.

Where the profit comes from

Every price carries a probability: 1 divided by the decimal odds. Odds of 2.00 say 50%. Odds of 1.90 say 52.6%.

A bookmaker pricing a fair coin toss does not offer 2.00 on each side. It offers something like 1.90 and 1.90. Add the two probabilities and you get 105.3%, not 100%. The extra 5.3% is the bookmaker's margin, and it is why backing both sides at one bookmaker always loses.

Now take the best price for each side from different bookmakers. Most of the time the total is still above 100%. Now and then it falls below. In the example, 2.10 says 47.6% and 2.05 says 48.8%. Together: 96.4%. The missing 3.6% is the arb.

The stakes are split in proportion to those probabilities, which is what makes both outcomes return the same amount. The arbitrage calculator does the split for you, and How to calculate an arb walks through the sums.

Why bookmakers disagree

There is no single market price for a football match. Each bookmaker runs its own book, and prices drift apart for ordinary reasons:

• They move at different speeds. News breaks, a sharp bookmaker cuts its price within seconds, a slower one still shows the old number a few minutes later.
• They hold different money. A bookmaker with heavy betting on the home side lengthens the away price to balance its own book, regardless of what anyone else shows.
• They disagree on purpose. Boosted prices and promotions are marketing, and marketing prices are often too high.
• They make mistakes. A typo, a line entered against the wrong team, a feed that froze.

None of this lasts. Most arbs close within minutes, as one of the two prices moves back into line. The bigger the arb, the faster it usually goes, and the more likely it is one of the mistakes.

Two-way and three-way arbs

An arb has to cover every way the event can end, once each.

• Two-way: markets with two outcomes. A tennis or basketball winner, over/under a goals line, a handicap with no draw. Two bets, two bookmakers.
• Three-way: football's home, draw, away (written 1X2). Three bets, at two or three bookmakers.

There are other shapes, such as Asian handicap lines where part of a stake can be refunded, or "middles" where both bets can win. They follow the same idea with fussier arithmetic. Start with plain two-way arbs.

What it actually pays

Most arbs between reputable bookmakers are worth 1 to 5% of the total staked. That is per arb, not per month, and it is small on purpose: you are being paid for being quick, not for taking risk.

What you make over time depends on things the percentage hides:

• How much you can get on. Bookmakers cap stakes, and the cap on the mispriced side is often low.
• How fast your money comes back. A stake is locked until the game is settled. An arb on a match next month ties up money that could have gone round several times.
• How many accounts you hold. The two prices have to be at bookmakers where you already have an account and a balance.
• How long those accounts last. See the guide to bookmaker limits.

Anyone quoting you a monthly income from arbing is guessing about all four. We will not.

What can go wrong

"Risk-free" describes the sum, not the afternoon. The real risks are practical:

• The price moves. You place the first bet, and by the time you reach the second bookmaker the odds have dropped. You now hold one ordinary bet, or you cover it at a worse price and take a small loss.
• A bet is voided. Bookmakers' terms let them cancel bets struck at an obvious pricing error, a "palpable error", sometimes after the game. The other side stands, and it can lose.
• Your stake is cut. The bookmaker accepts 40 of the 500 you asked for. The arb is now lopsided.
• The rules differ. A tennis player retires hurt: one bookmaker voids the bet, the other pays the opponent. Overtime counts at one and not at the other. Same event, different settlement.
• It is not the same bet. Two teams with similar names, a women's fixture against the men's, a line of 2.5 against 2.25.
• You slip. Wrong side, wrong market, one zero too many.
• Your money is stuck. Balances sit with several bookmakers at once. Withdrawals can be slow, and identity checks tend to arrive when you ask for a payout.

Careful habits handle most of this: check both prices on the bookmakers' own pages, read how each settles the market, bet the side most likely to move first, and treat any arb above about 10% as a probable mistake until you have looked hard at it.

Is it legal? Is it allowed?

Those are two questions. Where sports betting is legal, placing bets at several licensed bookmakers generally is too; an arb is only a set of ordinary bets. Laws differ by country, and so do taxes on winnings, so check your own. This is not legal advice.

Allowed is another matter. Bookmakers do not welcome arbers, and many say so in their terms. They cannot fine you. They can cut your maximum stake to a token amount, withhold promotions or close your account, and they do. Anyone who arbs for long meets this, and plans for it.

What a scanner does

You can find arbs by hand, comparing bookmakers one market at a time. It is slow, and most arbs are gone before you finish. A scanner does the comparing: it reads the prices of many bookmakers continuously, matches the listings that are the same game and the same bet, and lists the combinations that add up to less than 100%.

ArbStrike's scanner shows the smaller arbs free, with no account (under 5% during the launch month, under 3% after it). Pro, at $49 a month, opens every pre-match arb, and Elite, at $99, adds arbs on games in play and value bets. The pricing page has the details, and Arbitrage vs value betting explains the difference between the two methods.

A scanner finds the opportunity. It does not place the bets, and it cannot see your limits or tomorrow's voided bet. Those stay with you.