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How to calculate arbitrage betting

For anyone who is new to the art of arbitrage betting, working out the figures can be a headache. Like most modern gambling techniques, arbitrage betting takes a bit of time to understand and then to use to your own advantage. However, it should not be that hard, especially if you have the proper guidance. If you want to know how to calculate arbitrage betting, this brief guide should break down the basics so that you can understand the foundations of this betting type.

For most, arbitrage betting – when done right – is among the lowest risk forms of gambling out there. This technique utilises the price differences that you will find from one bookmaker and/or betting exchange to another. Then, you use both of these odds to make sure you essentially cover all bases making it easier for you to make your money back.

This is a method used for placing bets on outcomes of an event by using odds that guarantee a profit regardless of the actual outcome. As you might already know, bookies price their odds so that they exceed the traditional 100% of available probability. Arbitrage betting, though, looks to reverse this and put the edge back in your favour.

Since you are betting across every potential eventuality by using more than one bookmaker, you make sure you can make (often smaller) consistent profits back in return. The numbers behind learning how to calculate arbitrage betting, though, are very important to understand.

How to calculate arbitrage betting

To make sure that you can properly calculate the sums of money involved, you should be looking to make things as easy as possible. Most recommend that you use one bookmaker and one betting exchange. You back one result with the bookie, and then you lay the same outcome on the betting exchange. Let us say that you are betting on a boxing match where one boxer has a 60/40% change of victory over the other boxer.

By calculating the betting margins – working out the percentage chances of success – you will often see that most bookmakers exceed 100% probability as mentioned above. To calculate betting margins, you need to simply divide the number 100 by the odds that are given. So, Boxer A might have odds of around 2.20 to win – this would give them around a 45% chance to come out victorious. On the betting exchange, though, they may have lower odds to not win.

So, you place a bet with the bookmaker saying that Boxer A will win, and then you lay that they will not win with the exchange. Across both markets, so long as you are under the 100% probability margin, you should be able to see some kind of success.

The most common calculation used when working out how much to bet on each bookie and exchange works out at this:

Your Backing Price x Your Backing Stake / The Current Lay Odds – the Betting Exchange Commission

So, if you were betting £100 on Boxer A to win at odds of, say, 2.20, you then need to use the above calculation to work out what you are putting on with the betting exchange. Depending on who you win with, you should make a small but consistent profit with each victory.

The Bottom Line
All in all, betting using arbitrage betting is not easy, and you should really look to evaluate the costs involved and the risk involved beforehand. Most of the time, though, if you use the above, you should be able to guarantee at least some form of profit on a consistent basis.