Arbitrage Betting Guide For Beginners
Note: We don't recommend doing Arbitrage Betting if you are a beginner, as you are more likely to get banned or "Gubbed" when arbitrage betting, so you should make the most of the other offers such as 2ups, Extra Places, and Price Boosts before you start Arbitraging.
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What is Arbitrage Betting?
Arbitrage betting, sometimes referred to as arb betting, is where you use matched betting to take advantage of bookmakers setting their odds for an event too high.
It doesn't involve any specific type of offer given to us by bookies, they are just very small mistakes that bookmakers make when setting their odds, that allow us to guarantee a profit.
If the Bookmakers Back Odds for an event are higher than the Lay Odds for the same event on an Exchange, then we can 'arbitrage' the bet and make a profit.
There are different methods you can use when laying an Arbitrage Bet. You can do Underlay, Standard Lay or Overlay. You could also use Dutching to cover all possible outcomes of the event.
Dutching Arbitrage Bets is where you don't use an exchange, you actually use multiple Back Bets across multiple Bookmakers to cover all of the possible outcomes. i.e. Team 1 Win, Team 2 Win, Draw.
If you want to learn more about Dutching, you should read Our Dutching Guide and try out our Dutching Calculator.
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How Do You Profit Using Arbitrage Betting
Using an exchange, you can guarantee a profit if the bookmakers back odds exceed the exchange's lay odds for an event.
But, if you are Arbitrage Betting using Dutching, to figure out if you can profit from the bet you need to work out the arbitrage percentage, if this is Under 100% you can profit.
You can use a Dutching Calculator or follow the instructions below.
How to Calculate the Arbitrage Percentage
1)
Whether there are 2, 3 or More Outcomes Possible for an event, you take all of the Back Odds for ALL of the Outcomes and Calculate their inverse. This is 1 divided by the Decimal Odds.
2)
Now you will have 2, 3 or More Decimal numbers, depending on how many Outcomes there are. The next step is to add them all together.
3)
Once you have added it all together simply multiply this number by 100 and you have the Arbitrage percentage, and if this is Under 100% you can profit. The further below 100% the more you profit.
Odds for Both Teams NOT to Score on Bookie B
2.0
Odds for Both Teams to Score on Bookie A
2.50
2.50
1
= 0.4
2.0
1
= 0.5
0.4 + 0.5 = 0.9
0.9 x 100 = 90%
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The odds may only line up for a brief period of time, so you will need to be quick when you see an arbitrage betting opportunity.
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Arbitrage Betting Warning
We must also warn you that while this is a guide on Arbitrage Betting we do not always recommend doing it, especially for new matched Bettors.
This is because bookmakers will notice when you are doing too many arbitrage bets, and as a result, they will probably ban or "gub" you.
When a bookmaker "gubs" you they will reduce which promotions you get access to including 2ups, Extra Places and Price boosts, which are all promotions matched bettors can make a lot of money from.
"Gubbed" accounts may also have restricted Stakes.
Therefore, while your accounts are healthy you should take advantage of the Offers above as much as you can to extract the maximum profit before the bookmaker realises you are matched betting.
Then, when your account does face restrictions, or you no longer have access to promotions and Offers, you can begin Arbitraging, since the bookmaker account health doesn't matter to you anymore.
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How To Do an Arbitrage Bet
STEP 1 - Find a Good Arbitrage Bet Opportunity
Look for an event where the Bookmakers Back Odds are higher than the Exchanges Lay Odds for the event.
Or, find an event where you can place multiple Back Bets to cover all outcomes, and where the arbitrage percentage is Under 100%.
Arbitrage Bets typically won't have Maximum Stakes, since they aren't a value offer given by the bookmaker, so you usually will be able to do higher stakes, assuming you have the Bankroll for it.
Finding Arbitrage Bets manually is very boring as you have to constantly scan and calculate the odds.
Luckily Our Discord Group has a channel where we share the best Arbitrage Bets, so you can join and get notifications every time there is an opportunity!
STEP 2 - Use a Betting Calculator
If it is an Exchange Arbitrage Bet, input the odds into Our Standard Betting Calculator or you can just use the one we have put below.
Input the details of the bet and select either Underlay, Standard or Overlay.
If you are doing an Arbitrage Bet with Dutching, you should use Our Dutching Calculator. You can learn how to use the dutching calculator on our Dutching Calculator page.
You can learn more about Underlaying, Standard Laying and Overlaying further down, but to sum it up briefly:
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Underlay - you lay a lower amount, meaning you make £0 if the event doesn't happen, but you profit more if it does.
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Standard - you lay the normal amount, so no matter what happens you make the same profit.
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Overlay - you lay a higher amount, therefore your profit is £0 if the event happens, but if it doesn't you stand to make more.
All of these methods are risk free, and they all provide the same value, meaning it doesn't matter what you choose in the long run.
Back Odds:
Lay Odds:
Back Stake:
Lay Commission(%):
Lay Stake Required:
Lay Liability:
Click to Copy
Profit if Back Bet Wins:
Profit If Lay Bet Wins:
Site
We recommend you choose Standard Lay, as you know for certain what your profit is once the bets are placed. It also has less risk in the short run.
Our Calculator tells you what Stake to Lay, Your Liability and also how much you stand to Profit!
STEP 3 - Place Your Bets
Now that the calculator has told you what stakes to back with the bookmakers, or what stake to lay with the exchange, you should place all of the bets.
The Standard and Dutching Calculators will both give you all of the necessary information to minimise risk and maximise profit.
STEP 4 - Log Your Bet
After placing all of the required bets, come back to the calculator and Click 'Log Bet' for it to be automatically saved to your Profit Tracker, using all of the details from the calculator. After the game you can go back and confirm how much profit you made.
STEP 5 - Sit Back and Enjoy!
No need to watch the event, especially if you did a standard lay or dutching, as there is no necessary involvement after placing both bets.
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Matched Betting Arbitrage Bet Example
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Imagine you place a £50 Back Bet on Endo to receive a Yellow Card in the Liverpool Vs Brighton Game. The Back Odds on Skybet are 6.0 and the Lay Odds on Smarkets are 5.7.
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If you type these numbers into the calculator (or click the below), and select 'Underlay' you will see that you can lay a stake of £50 AGAINST Endo to get a Yellow Card, and if he does get a Yellow Card you Profit £15, but if he doesn't get a yellow card you profit £0!
By placing these bets and choosing 'Underlay' you are essentially getting a risk free shot at £15.
You also could have done a Standard Lay or Overlay, but you felt like underlay was the best option since you had a feeling he might get a card.
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The game ends and it turns out Endo Received a Yellow card in the 70th minute; therefore, on Skybet you profit £250, since you had a £50 back bet with Skybet for Endo to get a Yellow Card at 6.0 Odds.
BUT, you also had a lay bet against Endo receiving a Yellow Card on Smarkets, with a Lay Stake of £50, at odds of 5.7. Therefore, you have to pay out 4.7 X £50 which is £235 to the Smarkets Exchange.
Overall you profit £15 since you gain £250 on Skybet and lose £235 on Smarkets!
This is an Example of an Arbitrage Bet with an Exchange Lay since you are Laying the outcome, so this is slightly different to Dutching where you are placing multiple back bets to cover all outcomes.
An example of Dutching would have been placing a Back Bet for Liverpool with one bookie, placing a Back Bet for Brighton with another bookie, and then placing another Back Bet on them to draw with a third Bookie.
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Different Arbitrage Betting Strategies
When doing Arbitrage Betting you are either Dutching or using an Exchange to Lay the outcome. If you are using an Exchange then you have three different options for how to do the bet: Underlay, Standard Lay, and Overlay.
What is an Underlay Bet
When you choose to Underlay a Bet this means that you are setting your Lay Stake Equal to your Back Stake.
Assuming no lay commission, this would mean that if the back bet wins you make a larger profit, but if it loses you make £0.
This is what you would do if you were confident that the event was going to happen, so you are essentially betting on it. And, as the name suggests, you are simply lowering the Stake that you are Laying.
As long as the back odds are higher than the lay odds you will never lose money with an underlay bet, your worst outcome is always £0 profit.
Why would you do an Underlay Bet?
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One reason why you would do an underlay bet is because you won't need to use the betting calculator as the lay stake is simply the same as your back stake. So it saves you time and it's easier.
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Another reason is because you might have a feeling that the particular event is going to happen, so you want to try and make more profit by doing an underlay. This is essentially betting on the event.
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You may also do an Underlay Bet in order to avoid a rollover cycle, which you might learn about in some of the Sign-up Offers in Our Sign-up Offer List Page.
What is a Standard Lay Bet
If you do a Standard Lay Bet you are choosing the perfect Lay Stake, such that no matter what happens with the event you are guaranteed to gain the same profit.
You will likely need to use a Betting Calculator to figure out the Lay Stake but this is very easy, and you have probably done it already. Then, all you have to do is place the bets, for which you should already know your profits.
Why would you do a Standard Lay Bet?
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The main reason why people do Standard Lay Bets is because they essentially involve less gambling, as you will always make a profit. With the other methods, you could keep getting it wrong and therefore miss out on profit.
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Another big factor is because you don't need to worry about or watch the game/event, as you can sit back and know exactly what profit you stand to make.
What is an Overlay Bet
An Overlay bet is where you choose a higher lay stake, as you are essentially hoping that the event doesn't happen. This is because if the event doesn't happen you make a larger profit, but if it does happen you will NOT make any profit.
You will need to use a Betting Calculator to figure out what stake to lay on the exchange, and it will obviously be higher, so you will need more liquidity in your exchange account if you wish to do this strategy often.
Why would you do an Overlay Bet?
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The main reason is simply because you think that the event is less likely to happen, meaning you are essentially betting on the event to not happen.
Conclusion
When arbitrage betting with an Exchange, you have different options for how you want to do it, but they all provide the same value. So in the long run it doesn't matter which method you choose.
For Arbitrage Bets with Dutching, there are no strategies to choose from and you should only have the standard option where you guarantee the same profit no matter the outcome. Check out Our Dutching Calculator to learn more about this process.
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Will The Bookmaker Ban You For doing Arbitrage Bets?
Arbitrage betting is definitely the riskiest method of matched betting when it comes to bookmakers banning or "Gubbing" accounts.
They will inevitably restrict and remove offers from accounts that place arbitrage bets as their algorithms can flag accounts that consistently place bets on overvalued odds.
This is why Arbitrage Betting should only be done on bookmaker accounts that you don't care about, or on accounts that have already been restricted.
If there is a bookmaker that doesn't have many promotions, such as 2up and Extra Place offers, then you might as well place arbitrage bets on that bookmaker.
It would be very wasteful to start doing arbitrage bets on big bookmakers, like Bet365 and Paddy Power, since you are essentially sacrificing the profits that you would have made from the promotions that these larger bookmakers have.
There are techniques that you can use that will help you go under the radar, such as placing a few normal bets here and there, to convince the gambling sites you are an honest gambler. You can obviously lay these bets at an exchange and minimise any loss.
Also, if you do get 'gubbed' or banned you can always go into multi-accounting, where you use another set of accounts, with another identity. We help our premium members with this process in our discord group.
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Which Bookmakers are Best for Arbitrage Betting
There are actually some bookmakers known as "Sharp Bookmakers" who are much less likely to restrict or ban accounts, even if they know that you are arbitrage betting or matched betting.
These bookmakers don't offer as many promotional offers like the big bookmakers do, and they also don't give the highest odds.
2 Particular "Sharp Bookmakers" are Pinnacle and SBOBET but the draw back to this is that while they are more lenient, it is a lot harder to find profitable arbitrage opportunities on their sites.
"Soft Bookmakers" like Bet365 and Ladbrokes offer more promotional bonuses and higher odds, but are more likely to ban you, so we definitely advise that you don't arbitrage bet on these bookmakers unless they have gubbed your account.
If you do get gubbed on these bookmakers and you decide to arbitrage bet on them, then they are typically the best as they offer the highest odds, meaning there are more arbitrage opportunities.
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Will the Betting Exchange ban you for Arbitrage Betting
To give you the answer quickly...No! It is extremely unlikely that any of the betting exchanges will ban you, especially for just matched betting.
While they can pick up on matched betting behaviour, they simply don't care as they actually profit from matched betting. This is because betting exchanges get a commission on each bet placed.
This applies from all of the exchanges from Smarkets, Matchbook, Betdaq and even the Betfair Exchange.
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Do you Need Money to Start Arbitrage Bets?
People also often wonder how much Bankroll they need when starting matched betting, but it's different for each method.
When doing Arbitrage Betting, you don't need much bankroll as you can start small and build it up using the Standard Lay method to guarantee profit from every bet.
But, if you have not signed up to any bookies yet, you can easily build up a bankroll of £500+ just from Sign Up Offers. This means you won't have to put much of your own money into your accounts, since it should just be profit from completing these offers.
If you have already signed up to all UK Bookmakers, or you have exhausted all of the Sign Up Offers, you can also build up a good bankroll using Reload Offers, Weekly Bet Club Offers and other simple offers before you start doing Price Boosts.
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Do You Pay Taxes on Arbitrage Betting Profits
This is why matched betting is so great. It is absolutely tax free, as, despite the fact that it isn't actually gambling (since we guarantee a profit), it's actually categorised as gambling winnings, which are tax free.
The UK government will never see 1 penny of your matched betting profits.
From Sign-up Offers to Arbitrage Bets and all of the other great ways to make money from bookmakers, absolutely none of it is taxable, making matched betting one of the best side hustles around right now.
You do not need to declare any winnings to HMRC since they stopped taxing gambling gains in 2002.
We can keep you updated if they ever do change this, but it is highly unlikely as it would be an unreasonable tax law, where it would be incredibly hard to differentiate between matched betting profits and real gambling profits.
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End of Arbitrage Betting Guide
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