What is arbitrage?

An arbitrage occurs where bookmakers have differing odds on a particular event such that if you bet on every eventuality you will always make a profit.

Odds dictate the amount you will win if your bet wins, e.g. a bet of £100 at 3/1 means you will win £300. There are three different odds formats used by bookmakers - UK, European and US. The ArbExpert calculator provides a simple way to convert between the different formats. Take a soccer match between Southampton and Portsmouth where there are three possible outcomes as follows:

Bookmaker	Bet	Odds	Bet £	Potential return
William Hill	Southampton to win	9/10 (1.90 EU)	£395	£750.50
Ladbrokes	Portsmouth to win	21/5 (5.20 EU)	£145	£754.00
Pinnacle	Draw	3/1 (4.00 EU)	£190	£760.00

The total outlay on bets is £730 so if Southampton win you have a profit of £20.50; if Portsmouth win a profit of £24.00 or £30.00 if the result is a draw. That gives you a guaranteed minimum profit of £20.50

There are hundreds of arbitrage opportunities that occur every day. This is due to the ever increasing number of bookmakers, range of sports and range of betting opportunities within a sport. With this in mind, it is inevitable that there will be differences in the bookmakers’ odds and some of these will generate a genuine arb. Placing money on each side of the arb may only generate a 2% profit; however, if you do five £1000 arbs a day that’s a profit of £700 a week. Of course it’s not quite that simple – you need to get yourself organised and check that you are able to do it – so read on.

Prerequisites

In order to start arbing it is essential that you:

• Live in a country where on-line gambling is permitted by law

• Be old enough to gamble in your country, e.g. in the UK it is illegal to gamble under the age of 18

• Have a reliable broadband internet connection – the faster the better

• Have a permanent address in order to open bookmaker accounts

• Have access to a reasonable amount of money as capital to fund your bookmaking accounts

• Have a bank account, credit card or internet account such as Neteller or MoneyBookers.

Good news is that you do not need any knowledge of any of the sports or indeed any betting knowledge. In fact the less you know about sports the better as you are not tempted to just bet on one side of the match, e.g. when your favourite team is playing!

Getting ready

There are a number of things you need to do to set up prior to starting to arb.

• Understand the maths: It is important that you understand how arbitrage works. Basically it’s very simple – and with a few good tools it’s made even easier. It’s also important that you understand the 3 different types of odds that bookmakers use. Most bookmaker sites will enable you to state a preference of how you want odds to be shown. When you sign up with ArbExpert you will have access to a calculator that can be kept easy to hand in a separate window – it should provide you with everything you need whilst learning how to arb.

• Set up bookmaker accounts: You need to set up at least 10 accounts to start with. This needs to be done up front and will give you a chance to familiarise yourself with the different sites.

• Money: It is essential that you have access to money in some form. You will need to have sufficient funds in each bookmaker account to take advantage of an arb. When placing a bet you do not want to have to deposit funds first – as by the time you have deposited the money, the arb opportunity is highly likely to have disappeared.

• Multi-tabbed browser: When arbing it is ideal to have a number of bookmaker sites open at any one time. Having a multi-tabbed browser available makes it simple to move to the appropriate site without opening and closing new windows.

• Administration: When you start arbing it is imperative that you have a good administrative system to record all the bets placed and bookmaker/bank account details and balances etc. This is why ArbExpert plans to offer this facility for free.

• Start receiving arbs: Simply click on Sign Up; enter some basic details; chose your initial subscription, e.g. one month and pay using a debit card, credit card or PayPal account.

• Arb filters: Once you have signed up go to My Filters and My Preferences to set up which arbs you want to receive from which bookmakers and how they are displayed to you.

• Practice: It is important that you spend time understanding how it all works. Do start off with low value bets so if you do make a mistake it won’t hurt you! Keep your bets low until you are confident with how your bookmaker sites work and how to find the bets.

Golden Rules

These are the things that are key to successful arbing.

• Before you place any bets, get each side of the arb ready – then quickly place all bets – ensuring you place the largest (the favourite) bet first.

• Check that the odds look sensible – if the odds are way out of line with other bookmakers or the arb profit is high - then this could be a bookmaker error.

• It is best to only bet on arbs which are due to occur within the next few days to ensure your funds are not tied up for too long.

• Ensure all bookmaker accounts are funded – ready for betting.

• Keep a good administration system. With several bookmakers and potentially several accounts you need a good system to keep track of all transactions.

• Try not to place the maximum amount allowed by a bookmaker; best practice is to bet a maximum of 80% of the bookmaker's maximum.