What is arbitrage betting (Arbing) and how to calculate it?
August 20, 2020
Arbitrage betting, which is also referred to as ‘arbing’ is the process of buying something with the intention of selling it straight away at a higher price with the aim of making a profit. Although this technique originated from retail selling and buying & selling stocks, it can also be applied to betting markets.
When arbing, you cover all outcomes of an event to return a profit regardless of the outcome. It’s a mathematically sound strategy which doesn’t require free bets, free betting tips or any other offer. It’s a similar strategy to matched betting with the difference being that no free bets or betting offers are involved. When matched betting, you’re able to obtain an edge due to the free bets or other incentives you receive. With arbing, the edge comes from the difference in the back and lay odds at the bookmakers and the betting exchanges.
If you have done matched betting before, then you’ll be familiar with the back odds at the bookmaker usually being slightly lower than the lay odds for the same bet on a betting exchange. However, this isn’t always the case and sometimes, the back odds can actually be higher than the lay odds. When this happens, there is an arbing opportunity.
Let’s take a look at an example arb.
The image above shows the odds for the horse Tadleel which is running in the 4.55 Chester Downs.
The back odds for Tadleel are 9.4 at Ladbrokes and the lay odds are 7.2 at Betfair Exchange.
We can see instantly that this is an arb as the back odds are greater than the lay odds. The only time this would not be an arb is if the back odds were only slightly higher than the lay odds and the exchange commission ate into the returns resulting in zero or negative profit.
In order to calculate the ideal lay stakes to use, we can use a matched betting calculator.
In this example, we are going to use a £50 stake for the back bet with Ladbrokes and assume the commission at Betfair Exchange is 5%.
This is a standard back and lay bet so we simply need to input the stake, odds and commission into the calculator to determine the ideal lay stakes and to reveal how much profit we can lock in from this bet.
With a £50 stake on the back bet, the ideal lay stake to use would be £65.73 which results in a liability at the exchange of £407.53.
Let’s take a look at the possible outcomes.
Lose £407.53 with the exchange and make $420 profit with the bookmaker.
Total Profit if Wins: £12.47
Lose £50 with the bookmaker and make £62.44 with the exchange.
Total Profit if Loses: £12.44
As you can see, we will return a profit from this bet of around £12.45 regardless whether our horse wins or loses!
How To Find Arbs
It may surprise you to know that there are actually dozens of arbs available every day. Some can return a relatively small profit and some very large profits.
So, how do you find these arbs?
Finding arbs manually can be a very time-consuming task and generally isn’t worth the effort. There will be times when you come across an arb by chance but checking thousands of back and lay odds manually just isn’t worth it. However, there is an easier way.
Matched betting sites such as MatchedBets.com provide an Odds Matcher tool which compares the back and lay odds for tens of thousands of events and markets across dozens of bookmakers and betting exchanges. Using this tool, you’re able to find ables with the click of a button within a matter of seconds.
The Odds Matcher tool is available to all members of MatchedBets.com and is the most used tool for both matched bettors and arbers.
As a member of MatchedBets, you’ll also get access to the Matched Betting Calculator which, as we’ve seen above, helps you calculate the ideal lay stakes to use for your arbs and displays the profit you will make should you bet win or lose.
Membership to MatchedBets costs just £1 for 14 days and you can take advantage of hundreds of betting offers each month as well as being able to find profitable arbs 24/7 using the tools provided.
Arbing Without Betting Exchanges
There may be times when you’re unable to use a betting exchange for whatever reason. Whether you are having account issues or should your money be tied up in your bookmaker accounts. Thankfully, there is a way you can make money from arbing without betting exchanges and by using more than one bookmaker.
This process is called ‘dutching’.
Dutching is possible for events with two or multiple possible outcomes. For example, a tennis match has two possible outcomes whereas a horse race with 10 runners has 10 possible outcomes.
Not all bookmakers offer the same odds on each outcome and occasionally, you’re able to lock in a profit by taking advantage of the differences in the odds between bookies.
Let’s use a tennis match as an example and compare the odds at two different bookmakers.
Player 1 odds: 1.93
Player 2 odds: 2.0
Player 1 odds: 2.10
Player 2 odds: 1.89
If you were to back both players at either of the bookmakers, you would end up with a loss. However, if you back one player with one bookmaker and the other player with another, it is sometimes possible to lock in a profit regardless of which player wins.
In order to calculate the ideal back stakes to use at each bookmaker, we can use a dutching calculator which is again available to members of MatchedBets.com.
Using a total stake of £100, the dutching calculator says to place a £49 bet on player 1 at odds of 2.1 with bookmaker 2 and a £51 stake of player 2 at odds of 2.0 with bookmaker 1.
Let’s take a look at the possible outcomes:
Player 1 Wins
We lose £51 with bookmaker 1 and make £53.90 profit with bookmaker 2.
Total profit if player 1 wins: £2.90
Player 2 Wins
We lose £49 with bookmaker 2 and make £51 profit with bookmaker 1.
Total profit if player 2 wins: £2
Therefore, regardless of which player wins, we will make a profit.
A Word Of Warning
Even tho arbing can be extremely profitable, it is not always recommended. This is especially true for bookmaker accounts which are valuable to you. For example, accounts with bookies which offer excellent odds or regular betting offers which you take advantage of. This is because bookmakers generally don’t like people profiting from arbs as they’re taking profit away from the bookies themselves. If a bookmaker notices you arbing on a regular basis, it’s likely that you’ll get a ban from the bookmaker or have your account restricted in some way. Therefore, we only advise arbing with bookmaker account which you’re already stake restricted at or ones which you won’t be too bothered about losing.