Arbitrage betting
Arbitrage betting means betting every outcome of a game at different books, at prices that leave a profit whichever side wins. The arithmetic is real. The guarantee is weaker than it looks.
The arithmetic
Books disagree with each other all day long, and usually the gap is too small to matter, but now and then it is big enough that the best price on each side, taken at two different books, adds up in the bettor's favor.
Say one book has a team at +105 and another has the opponent at even money. The +105 works out to 48.78 percent and even money is 50 percent, so together they make 98.78. Anything under 100 is an arbitrage. Split $1,000 in the same proportion and it looks like this:
| Bet | Stake | Returns if it wins |
|---|---|---|
| Team A at +105 | $493.83 | $1,012.35 |
| Team B at even money | $506.17 | $1,012.34 |
You put out $1,000 and get back $1,012 either way. That is a profit of about $12, or 1.2 percent.
The method never changes: turn each price into a percentage, add them, and stake each side in proportion to its percentage. The page on implied probability covers the first step and the hedge calculator works out the second stake.
Why two books disagree
Sometimes one book is just slower than the rest and is still showing the old price. Sometimes it has shaded its number on purpose because its own players are all on one side (I did that more weeks than I can count). A boost or a promotion can push one price above the market. And sometimes somebody typed the wrong number. Most of these gaps are a percent or two, and most of them close within minutes.
Finders
An arbitrage finder is software that reads the prices at many books and lists the gaps, sold by subscription. It does the looking for you. It also shows the same list to every other subscriber at the same moment, which is worth remembering when you're racing them to a price that only moves one way.
There is no such thing as an arbitrage betting site in the sense of a book that offers it. Any two books can make up an arbitrage, and neither of them wants to be half of one.
Where it breaks
The most common way is that the price moves. You get the first bet down, the second price is gone, and now you hold a straight bet you never wanted. Close behind is the void: if one price was an obvious error, most books' rules let them cancel the bet, and the other side stands (more on that in why a sportsbook voids a wager). The rules themselves can differ, too. One book voids a baseball bet when the listed pitcher is scratched and another lets it stand, so the same event is not always the same bet.
Then there is the limit. The book with the off price will often take $50 of it, not $500. There is the money, because you need balances at many books and each withdrawal takes time and may carry a fee, and a 1.2 percent return looks different on money that takes a week to come back. And there is the plain typo: enter one stake wrong and the profit is gone.
How the book sees you
I'd have looked at it the same way any book does. From the side with the off price, the arbitrage bet is simply a sharp bet: the player has taken the best number in the whole market. The book doesn't see the other half and wouldn't care if it did. It sees an account that only bets when the book is wrong, and it cuts that account. I can't call that unfair. The page on limits explains how it goes, and the short version is that an arbitrage account at a soft book usually has a short working life.
As for whether it's allowed, an arbitrage is two ordinary bets. Whether those bets are legal depends on where you live and on the books you use. House rules are a separate matter, and most books reserve the right to limit or close an account for any reason.
If you're going to try it
If you bet for fun, I'd leave it alone and take the lesson instead: the price differs from book to book, and getting the best one costs nothing.
If you want to try it, start small and check that both books settle the event by the same rules. Place the harder leg first, the one at the smaller limit or the price most likely to move. Size it so that a broken arbitrage leaves you with a straight bet you can afford, inside the 1 or 2 percent of bankroll you would stake anyway. And don't hold more at any one book than you could stand to wait for.
On paper the profit is small and certain. The trouble comes from everything that isn't on the paper.