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|‣||What Arbitrage Is|
|‣||Examples Of Arbitrage In Sports Betting|
|‣||Whether Or Not Arbitrage Is A Viable Strategy|
Bettors want a profit out of their wagers. Otherwise, it makes no sense whatsoever to place a bet.
There are some “extreme” or “reliable” measures, depending on your way of seeing it, to ensure a winning bet.
Arbitrage is when a bettor makes many bets on the same event to guarantee a win no matter the result.
This usually is because different sportsbooks offer different odds for the same event.
In other words, arbitrage is a hedging tactic to minimize risks. For bettors to do it, they need to place their arbitrage bets simultaneously.
There are a few examples we can use to illustrate this better. Let’s have a look.
Two sportsbooks offer different prices on a game at the same time. The bettor wagers on both sites and sides to guarantee at least breaking even.
Let’s say you want to bet on the Lightning vs. Canadiens matchup in the NHL. You notice that on DraftKings, the Canadiens have a +110 money line.
So you bet $100 on Montréal, and if they win, you get $110 of profit.
For this same game, FoxBet has the Lightning at -105 and the Canadiens at -105 too. You bet $105 for the other team, the Lightning.
This way, you guarantee at least breaking even, or if the Lightning wins, you get a $5 profit.
These changes to arbitrage bets are usually available to opening lines bettors. It’s a slim window of opportunity before the oddsmakers adjust the lines.
The example above is not normality in big markets like the NFL or MLB. This is because books usually copy each other’s lines.
However, on props, there is no centralized place for the sportsbooks to compare the odds. This leaves bettors an enormous opportunity to shop around the same prop and find different prices.
For example, FanDuel listed 2020 Rookie CB Jeffrey Okudah’s draft position at a total of 4.5. You could find the over listed at +115.
Another book also had the 4.5 over/under, but with the under listed at +110.
Bettors who wagered $100 on both guaranteed themselves $10 or $15 in profit.
This is not an arbitrage approach you’ll find in the betting guide. You can’t simply know or guarantee a line will move in your favor. When it does, though, arbitrage becomes a real possibility.
Let’s say Conor McGregor opens at +110, and you bet $100 on him. Then, the action moves heavily in McGregor’s way, so he becomes a -115 favorite.
Dustin Poirier’s line then moves to +105. Now you bet Poirier at +105 and guarantee yourself a $5 or $10 profit no matter who gets his hand raised.
A bit yes and a bit no.
For the average player, it is hard to win lots of money by arbitrage. Why, you ask?
First, the profit margins are small, so you need a powerful bankroll and high betting limits. Second, arbitrage bets are hard to find; they don’t pop up regularly.
Also, you are risking yourself getting banned or limited by sportsbooks.
The books now move lines on air. This means they change odds based on what other sportsbooks do—not the action they’re receiving.
This is a way for them to make sure you won’t find big pricing differences on spreads or moneylines. They are aware of arbitrage, and they are not fans of it.
Of course, you can bet on a given game and then hope the line moves in your favor. But there is a reason that not even arbitrage bettors like this tactic too much. It relies on hope. See the flaw?
You can find arbitrage options on props in events like drafts or other markets that aren’t as big or liquid. The thing is, limits on these markets are usually low, so it’s hard to generate regular profits on it.
In case we haven’t said it enough, sportsbooks aren’t friends of arbitrage players.
Even though arbitrage bettors wager on tenths of sportsbooks, they are taking a risk. If one catches them, chances are that bettor is getting banned or limited.
Arbitrage betting is not illegal, but it’s not something books take nicely. They can even cancel your bets, so if the other bet isn’t canceled, you risk a lot of that bankroll. It could go badly for you.
You should know some software will identify these for you. Many companies have developed software to analyze dozens of books’ odds for events.
That could save you lots of time in terms of line shopping.
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