Way to Calculate Arbitrage Betting

We explain betting strategy that is low-risk and how to figure arbitrage bets and also provide you with an understanding of the maths behind arbitrage betting. Learn how to figure arbitrage bets between a market and bookmakers to increase your potential arbitrage profit.

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If you are new to arbitrage betting we have explained in detail exactly what it is, but to offer context for this guide, it’s a trading strategy that benefits from price differentials between a few bookmakers or betting exchanges to guarantee a profit whatever the outcome.

Arbitrage sports betting is the way of placing bets at chances which guarantee a profit whatever the outcome on all outcomes of an event.

Let us explain. A market that is fair would be priced at 100 percent dependent on the probability of an event happening bookmakers will cost their chances to go above a likelihood giving an edge to them.

Arbitrage opportunities are the opposite of the where an arber will bet on all eventualities across many of gambling suppliers, giving them the chance to take advantage of discrepancies in price so the likelihood of the chances they’ve bet on is lower than 100% – hence in their favor.

It’s fundamental when creating an arbitrage bet to comprehend the maths behind arbitrage betting in the event you will need to compute an arbitrage bet our arbitrage calculator is simple and totally free to use.

Arbitrage calculator

Follow the below directions:

Input the complete stake you need to risk.
Input the chances for outcome 1 and the commission if on a betting exchange (if you're arbing between bookmakers set the commission value to 0).
Repeat for the other results you want to arb (add fresh outcome if you need more than 4 results on a marketplace ).
The arb calculator will then automatically notify you how much you will need to bet on each outcome and your gain.

The Way to Compute arbitrage betting from a bookmaker and exchange

The arbitrage bet is created by taking positions in the marketplace across a market and a bookmaker - putting exactly the outcome on the exchange and then financing in the bookmaker.

For instance let's say you want to wager on a tennis game between Player A and Player B. The odds on the bookmaker and the market probabilities in brackets - learn how to compute margins that were gambling - are displayed below:

Market margin

Odds

105%

You now examine the lay price on Player A to win - gambling he will not win - that is 1.98 together with the Smarkets exchange. The table below highlights that this can be an arbitrage opportunity as the joint implied probability for stakes is 95.96%.

Player A to Succeed at bookmaker

Player A to not win at Smarkets

Combined market margin

Odds

95.96%

Now you bet #200 on Player A to triumph on the bookmaker with chances of 2.2. To calculate your stake that is lay about the Smarkets market you use the following calculation:

(back price x rear bet ) / (present lay odds - exchange commission)

You would then make a #224.49 put bet on Player A to win chances of 1.98 on the gaming market.

Calculate your gain if you win in the bookmaker

Calculating your gain with the bookmaker is straightforward, if your bet wins:

Gain = (back odds - 1) * back bet - (lay odds -1) * lay stake

Example: Gain = (2.2 - 1) * 200 - (1.98 -1) * 224.49 = #20.00

Calculate profit if the lay bet wins in the exchange:

Next, if your bet with the market is effective, you calculate your gain:

Gain = (lay stake * (1 - commission)) - bookmaker bet

Example: Gain = (224.49 * (1-0.02)) -200 = #20

Total arbitrage profit

Your arbitrage profit Irrespective of the result is displayed below:

Outcome

Bookmaker

Smarkets exchange

Profit/loss

Player A wins

+#240

-#220

+#20

Player A loses

-#200

+#20

So if this arbitrage bet was put by you, you'd guarantee a profit of 20 no matter Player A.

The Way to Compute arbitrage between two bookmakers

Arbitrage bets were made involving a few bookmakers, before betting exchanges - because bookmakers have chances these are becoming less prevalent. Having said they do happen.

For an arb you want to recognize both bookmakers offering the chances on each outcome. The table below will help you recognise whether a arb is across bookmakers. Then chances which are greater than what is recognized in outcome 2 would introduce an arbitrage opportunity, if you find odds like outcome 1:

Outcome 1 odds

Outcome 2 odds

1.2

>6

1.3

>4.33

1.4

>3.5

1.5

>3

1.6

> 2.66

1.7

> 2.42

1.8

> 2.25

1.9

>2.11

2.0

> 2.0

For instance let's say you want to wager on a darts game between Player A and Player B. The chances on the market and both bookmakers indicated probabilities are displayed below:

Market margin

Bookmaker A odds

104%

Bookmaker B odds

105%

This shows an arbitrage opportunity between bookmaker B and bookmaker A. The table below combines probabilities and the odds and reveals they are - or in other words, in your favor - understand how to convert chances into probability.

Player A to Succeed at bookmaker B

Combined market margin

Odds

98.43%

By cross-matching the chances for every outcome across both bookmakers the joint market margin is currently in the bettor's favour providing a guaranteed yield of 1.57%.

Calculating how much to bet for arbitrage bets

You must calculate how much to bet with every bookmaker to ensure an equal return. Let's say you're prepared to bet #100.

Example: Bookmaker A stake = (100*27 percent ) / 98.43% = #27.43

Example:Bookmaker B bet = (100*71.43%) / 98.43% = #72.57

Total arbitrage profit

Your arbitrage profit Irrespective of the result is displayed below:

Bookmaker A

Bookmaker B

Profit/loss

Player A wins

-#27.43

+#29.02

+#1.59

Player B wins

+#74.06

-#72.57

+#1.46

The Way to Compute arbitrage on three-way betting markets

You understand how to compute arbitrage opportunities for a arbitrage bet that is straightforward, you can look at 1X2 arbs or three-way. Arbs are prevalent in football where is a chance of a draw.

When arbing using a exchange there's absolutely not any requirement for arbs as you could back then and Manchester United to win the bookmaker against Liverpool put them to win the market - that covers anything other.

This example is for a arb involving three bookmakers. Let's say you find the odds on a match between Liverpool and Manchester United:

Draw

Liverpool to win

Market margin

Odds

93.86%

This highlights an arbitrage opportunity between both bookmakers as the table reveals the industry margin is below 100% and above unites the odds and probabilities.

Calculating how much to bet for arbitrage bets

You want to figure how much to bet with every bookmaker to guarantee an equivalent return based on which bookmaker you win with. Let's say you need to bet #1500 overall.

Stake at each bookmaker = (Overall stake * Bookmaker implied probability)/Combined market margin

Example: Bookmaker A stake = (1500*47.17%) / 93.86% = #753.84

Example: Bookmaker B bet = (1500*28.17%) / 93.86% = #450.19

Example: Bookmaker C bet = (1500*18.52%) / 93.86% = #295.97

Total arbitrage profit

Your arbitrage profit Irrespective of the result is displayed below:

Outcome


Bookmaker A


Bookmaker B


Bookmaker C


Profit/loss

Man United win


+#844.30


-#450.19


-#295.97


#98.14

Draw


-#753.84


+1147.98


-#295.97


#98.17

Liverpool win


-#753.84


-#450.19


+1302.27


#98.24

So for this example, as suggested, if you put # 1500 bet you'd guarantee a profit of about #98.

Apply this to gambling

You understand how to compute arbitrage bets you are to take advantage of price discrepancies. Remember arbitrage bettors are accepted by Smarkets and offer the best odds online - . 
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