One thing you’ll notice if you bet online frequently is that bookies don’t always agree on the same sportsbook odds. When this happens, some bettors seize the opportunity to employ the arbitrage technique, which guarantees them a win, to generate some risk-free money.
For those who do not know, the arbitrage betting strategy is a well-liked method used by bettors to take advantage of a difference in odds offered by bookmakers. This is because the bettor stands to gain from the combined odds of the two bookmakers.
To put this method into further detail, it basically implies that you may wager on both teams to play and have it work in your advantage by combining two odds that bookies have established. For instance, if two different bookies had differing odds on the Cleveland Cavaliers and Golden State Warriors for Game 1 of their series, you would arbitrate the game. The Cavaliers and Warriors are currently participating in the NBA Finals.
Basketball Game: Cleveland Cavaliers vs Golden State Warriors
$1,000 is the total stake.
You will place opposing wagers because there are two bookmakers with varying odds.
Result 1: You wager $1,073.31 on the Cleveland Cavaliers, at odds of 2.330 with bookmaker 1. You wager $460.65 of your $1,000 investment on this game.
Outcome 2: You wager the remaining $539.35 of your initial $1,000 stake and win $1,073.31 on the Golden State Warriors, with odds of 1.990 with bookmaker 2.
It goes without saying that you will only win one of these two wagers, but whichever wager you win, you will take home $1,7073.31, or a profit of $73.71.
Although they spent $1,000 on their bets, some bettors may not view the $73.71 profit as a good return on investment. However, since it is a low-risk strategy for making money and they would have lost $1000 if they had lost on the spread, this is in fact a wise way to bet on sports.
One of the things you need to know before you start arbitrage betting is how to figure out profits before you place your bets so you can determine if it’s worthwhile. This can be computed manually or with an arbitrage calculator, both of which are readily available online with a fast search.
Finding the bookies with the best odds on the event you want to wager on should be your first move. One bookmaker should have the best odds on the favorite, while the other should have the best odds on the underdog. After determining that, the next step is to compute the arbitrage percentage, which indicates whether or not you have an arbitrage that is worthwhile to bet on.
The arbitrage percentage is easy to calculate: just divide 1 by the odds that the bookmakers provide you, then multiply the result by 100. This needs to be completed with both odds and the combined outcomes. For instance, bookmaker 1 offered odds of 1.36 for the Warriors vs. Cavaliers game, while bookmaker 2 offered chances of 5.5.
By applying the formulas, (1/5.5)*100= 18.182% and (1/1.36)*100= 73.529%. The overall percentage, when summed up, is 91.711%. If the overall percentage is less than 100%, you have an arbitrage opportunity and should wager; if it is greater than 100%, you should pass on the event.
It’s simple to figure out your profit once you know your overall %. This is computed by taking the money you intend to invest in the bets, dividing it by the arbitrage percentage you determined, and then deducting the investment amount. Thus, using the arbitrage percentage total we computed and a $1,000 investment, you can calculate your return as follows: $90,388 = ($1000/91.711%)-1000.
Determining the amount you must wager with each specific bookmaker in order to achieve the calculated profit is the most crucial step in your computation. To do this, just multiply the investment amount by the arbitrage % for each odd, then divide the result by the percentage as a whole.
With the figures we previously computed, the sum to be invested with bookmaker 1 is:
$91.711% / ($1000 * 73.529%) = $801.75.
The amount to invest with Bookmaker 2 can be calculated as follows: ($1000*18.182%) / 91.711% = 198.25.This is a basic description of how the arbitrage betting strategy operates. As previously noted, if you don’t think you can perform the necessary calculations, you can easily find an arbitrage calculator online.
