“House always wins.” That is what we have been told for ages whenever we wanted to wager a bet on our favourite sports. But, is it actually possible to beat the house? Can we win every bet? There is a magical tool which can help you achieve this dream. Here we’ll explain how arbitrage betting calculator works.
Arbitrage betting is not a new phenomenon. In fact, it’s been around for quite some time. However, it is getting more popular as the competition among the best online bookmakers intensifies. Wait! What happens when the competition intensifies among the online betting sites? Do they give away free holidays to Chernobyl? Well, sometimes they launch crazy promotions. However, they mainly compete in offering the most appealing odds. If you check our best betting odds section, you’ll see that we quite often compare the odds offered by different online bookmakers to show you the best odds on a specific sporting event.
The core of arbitrage betting is finding the most appealing odds on a specific betting event, calculating the odds margin and finding the edge. First you’ll need to find the odds margin using the formula which we’ll mention soon and then use the arbitrage betting calculator to find out the bets that you’ll need to wager and your potential winnings. Here is a step by step guide on how arbitrage betting works.
Arbitrage Betting Explained: How It Really Works
According to Oxford Learner’s Dictionary, the meaning of arbitrage is the practice of buying something (shares, foreign currency etc.) in one market and selling it in another to make profit. In economics and finance, it is also used for the practice of buying shares of different companies to mitigate the loss. It is a hedging method, in a way. The aim of arbitrage betting is exactly the same: omitting risks as much as possible.
What happens when you omit the risks of betting? You beat the house. But is that really possible? There are many stories going around on the internet about how people generate substantial income through arbitrage betting. Here are the steps that they follow: First, a sports betting event that is not super popular. You can take a look at tennis matches or rather minor UFC fights. Because, the odds of the major sporting events are usually close to standard in most online bookmakers as the interest is super high even without offering a promotion. Alternatively, you can look for the latest online betting bonuses to find enhanced bet offers. The aim is finding different odds on the same betting event on different betting sites.
To keep things easier, focus on sporting events with 2 way results in which a side for sure wins. The possibility of a draw makes it a bit complicated. The best arbitrage betting finder is yourself. Simply open up 3 or 4 online bookmakers and go through the odds for the rather minor sporting events. You’ll most likely find odds like this:
|Bookmaker Y Odds||Bookmaker Z Odds|
|Team A to Win||1.19||1.25|
|Team B to Win||5.41||4.30|
As you can see on the table, both online bookmakers favour the same team while offering different odds. Calculating the betting odds margin of the sportsbook, you’ll find that both bookmakers have the house edge. But, will they still have it if we wager unbiased bets on all possible outcomes on both bookmakers? Let’s find out calculating the betting odds margin using the golden formula!
Calculating the Betting Odds Margin with the Golden Formula
We call the betting odds margin formula the golden formula, as it turns eggs into gold, so to say. Betting odds margin shows the house edge in a betting event. Here is how we find the betting odds margin using the formula:
(1/decimal odds of possibility 1) x 100 + (1/decimal odds of possibility 2 ) x 100
Let’s put our example onto this formula and calculate the house edges of Bookmaker Y and Bookmaker Z in the sample betting event! Here is how we calculate the house edge of the Bookmaker Y in this betting event: (1/1.19) x 100 + (1 / 5.41) x 100 = 102.517. It means that the house edge is 2.517%.
Here is the house edge of the Bookmaker Z according to the betting odds margin formula: (1/1.25) x 100 + (1/ 4.30) x 100 = 103.255. So the house edge is 3.255%.
As long as the betting odds margin is in plus, the house wins. That is how online bookmakers secure themselves. Nevertheless, you can pull the betting odds margin into minus turning the edge to yourself. This is what we call arbitrage betting. Still not clear? Let’s continue analyzing our sample betting to see whether there is an opportunity of arbitrage betting here! As you can see in the table above, Bookmaker Y gives much better odds for Team B to win compared to Bookmaker Z (5.41 to 4.30). On the other hand, Bookmaker Z has better odds for Team A to win (1.25 to 1.19). Can we revert the edge towards us if we bet on both teams taking advantage of the higher odds? There is one way to find out.
(1/ 5.41) x 100 + (1/ 1.25) x 100 = 98.48428835489834. So, the house edge is -1.515. This is our edge right there. Now we know that we can go ahead, create accounts at both online bookmakers, wager unbiased bets on both sides and make money no matter the outcome of the sporting event. Nevertheless, wagering random bets won’t really generate any revenue. We have to know how much to bet on each side in order to find the goose that laid the golden eggs. Right at this point, the magical tool of arbitrage betting calculator comes into picture.
How to Use Arbitrage Betting Calculator to Beat the House
Learning how the arbitrage betting calculator works is the most crucial part of the process. Thanks to a well-working arbitrage betting calculator, you can find out the payout amount based on your stake. So, you can decide how much to wager on each betting option.
As usual, we’ll use our example betting event to explain how arbitrage betting calculator works. The higher odds for Team A to win are 1.25 and Team B to be triumphant are 5.41. First, we need to enter these numbers on the related fields on the arbitrage betting calculator. And then we enter our stake and hit the calculate button. The calculator shows that if we have $100 in our pocket, we need to wager $81.23 to Team A to win and $18.77 to Team B to win. Our profit from this betting activity is $1.54. If our budget is bigger, say $1000, then we can bet $812.31 on Team A to win and $187.69 on Team B to win. In the latter betting event our profit rises to $15.39.
Using an arbitrage betting calculator is quite simple and straightforward. Here is one that we used while testing our sample betting odds. Try this arbitrage betting calculator software and let us know your experience in the comment section below.
Risks of Arbitrage Betting
Here comes the disclaimer. There is nothing called free money in life. And this article is not investment advice. We inform you about arbitrage betting just so you know that such a practice exists and comes with risks. First of all, sports betting odds are never static. They keep changing based on the circumstances that might have an impact on the outcome of the sporting event directly or indirectly. So, there is a chance that the odds on the Bookmaker B will change while you are wagering your initial bet on the Bookmaker A.
Bookmakers might cancel betting events. Imagine you wagered $600 on Team A to win and $400 on the other team. If one of the betting events is cancelled by either bookmaker and the other active bet loses, you lose the whole sum. Betting events are not really canceled by online bookmakers; but there is this possibility.
If you claim a betting bonus to use it on an arbitrage bet, you have to keep in mind that there might be a wagering requirement that you need to fulfill in order to be able withdraw your winnings. Even if you make money through your arbitrage bet, you might lose your winnings while trying to complete the wagering requirement.
Last but not least, your account might get suspended if the bookmaker realizes that you beat the house edge with arbitrage betting. They usually consider it as cheating. So, if you get too greedy, they might eventually realize that you are into arbitrage betting. Listen to the story of an Aussie punter whose account got suspended when the bookmaker realized that he was doing arbitrage betting:
Arbitrage Betting FAQs
Arbitrage betting ensures a sure bet. However, the betting odds margin is quite small. So, you need to wager a big sum in order to make a decent profit. But then again, if things go south because of the risks that we explained, then your loss will be big as well. Keep in mind that there is nothing called free money and always gamble responsibly.
Yes, it is legal. There is no legal prohibition against arbitrage betting. However, online bookmakers regard it as cheating. It is similar to card counting in blackjack.
It definitely is not an urban legend. You can successfully wager arbitrage bets. But beware of the risks!