Arbitrage betting is also known as “arbing” in the gambling world. It is just like arbitrage trading in the stock market where traders buy an asset from one market to sell it simultaneously in other markets at a comparatively high price. The difference between the selling and buying rates is termed arbitrage profits. But, how does this concept apply to sports betting? Read below to find out.
What is Arbitrage betting?
Arbitrage is a form of trading that can be done physically or virtually. It is a technique where the arbitrator benefits due to differences in the price of assets between two markets while profit earnings are guaranteed most of the time regardless of the asset price fluctuation. Arbitrage is more commonly applied in the stock market but has become popular among sports bettors who seek to make profits with low-risk investments.
Previously, sports arbitrage was carried out secretly and bettors placed wagers at multiple bookmakers on high street. But online betting and easy accessibility to betting exchange have turned arbitrage betting easier. In arbitrage betting, you need to bet on all the event outcomes, while you make guaranteed profits irrespective of the end result. This is why people love arbitrage betting as compared to traditional gambling which carries high risk unless you have a strong prediction capability to predict the event winner.
What is an arb?
Arb in gambling means arbitrage bet from a matched betting perspective. Your account must however, not reveal about arb in matched betting as it is bad for your account history and you may get noticed quickly. When the back odds are high than the lay odds on an exchange, it is an arb and can be seen in odd matcher tools.
Although you can place multiple bets on a day, the profit earned depend on your bankroll, the size of the arbs you take any number of wagers placed. For successful arbitrage betting, you must have a betting account with many bookmakers. However, avoid using the same bookmaker over and over on a single day to avoid being noticed.
How to understand market efficiency and arbitrage opportunities?
In order to understand how arbitrage betting works, you must first understand how market efficiency works. Betting markets rely on information so that they can set betting values, information accuracy and who can access them to determine market efficiency. When all betters get accurate information, the market becomes efficient as compared to the situation when bettors are provided with insufficient data or with bad information.
In the event that the market becomes 100% efficient, arbitrage betting won’t be possible since bettors and oddsmakers have to obtain and react to different market information differently. The difference between the information quality and reaction time contributes to market movement as well. And when the difference grows, a new arbitrage opportunity arises simply because of market inefficiency.
Risks associated with arbitrage betting
Although arbitrage betting has many advantages and can guarantee profits in the long run, there are a few risks associated with it.
Bankroll and liquidity
Arbitrage betting requires a huge amount of money or a large bankroll in different booker accounts. To place several bets simultaneously, you will have to deposit a lump sum amount to cover liabilities. Lack of liquidity is another issue in arbitrage betting. This is because money staked in a particular market determines how much you can stake there which can become an issue for placing arbitrate betting in less popular events. If you are not provided with sufficient liquidity, you will not be able to complete your arb and lose money consequently.
As previously said, bookies closely watch rivals to make sure they are acting appropriately. As a result, there won’t be much time to take part in arbitration. Bets must be closed out swiftly to gain from these pricing differences between bookies and dealers before the market corrects itself. While an arbitrage system can be useful, it cannot ensure that you will be able to swiftly cover all scenarios.
Arbitrage is mathematically sound, but rewards are typically modest. Even with the potential for greater earnings, an arb will typically yield 2-5% of your initial investment. Additionally, bookmakers might not like arbitrage bettors, therefore if they detect you as one, they will limit or close your stakes.
Tips for placing arbitrage betting in sports
Learn about different sports betting types
If you are new to sports betting, ensure that you learn different sports betting types and odds that work best in specific events. Almost every betting site has some common betting types which you can consider for arbitrage betting. Once you know about them, you can start with arbitrage betting during live sports events.
Research about multiple sports bookmakers
It is necessary to create an account at multiple exchanges during special events in order to maximize your arbitrage betting possibilities. You will be limited in your arbitrage betting opportunities and reduce your chances of winning if you do not do so.
Use a large bankroll
Since arbitrage betting requires creating an account on multiple sites at a time, it requires bettors to invest a large amount of money at a time. This also ensures guarantees profits that might be less or more, depending on the market situation. Although profits are ensured, you have to invest huge money first just like investing in a property.
Learn quick site navigation skills
When bookmakers realize about the odds they set are being disrupted, they adjust them as quickly as possible. If you do not know how to navigate different bookmakers’ sites simultaneously, you may lose the best arb odds and limit your returns. When arbitrate bettors fail to adjust their bets accordingly, they may even lose profits entirely.
Use casino bonuses wisely
Many online gambling sites offer generous bonuses for placing wagers, slots and even table games. When you sign in for a new account and deposit the initial amount, a welcome bonus will be offered for sports events generally that can increase your bankroll and maximize your first arbitrage bet.
Sports bookmakers do not like arb betting
You must understand that sports bookmakers use different tools to identify arb betting and limit the bettor’s stake amount at once. This is because no bookmaker would like to lose money. In fact, bookmakers try to create unique odds so that new players can be attracted and they can differentiate themselves from other betting sites.
Arbitrage betting is not for you if you’re hoping to win hundreds of thousands of dollars quickly. It is a beat strategy where profits of 2% to 3% are pretty standard. You can be extremely successful and create a four- or five-figure bankroll over the course of a year if you can view arb betting as a trail race rather than a dash.