Arbitrage Betting

Overview

What is arbitrage betting? We’ll answer this question in three different ways.

The Easy answer

Arbitrage betting is creating a mathematical advantage that guarantees the bettor takes home a profit no matter the outcome of an event.

The complex answer

Arbitrage betting involves hunting for opposite outcomes in the same event at multiple sportsbooks and only betting when those outcomes imply less than 100 percent probability.

The example answer

Let’s say that the San Francisco 49ers are facing the Philadelphia Eagles. DraftKings has moneyline odds of 49ers (-120) and Eagles (+100), while FanDuel has odds of 49ers (+115) and Eagles (-105).The total implied probabilities of DraftKings’ odds for the Eagles (+100) and FanDuel’s odds for the 49ers (+115) is 96.51 percent, which means that there’s a 3.49 percent margin on the 100 percent total probability that exists for every scenario. A $100 wager at +100 odds would result in a $200 payout, as would $93.02 wager at +115 odds would also pay $200. So, a bettor that wagers $193.02 would win $6.98 no matter which team wins.

Conclusion

Arbitrage betting inherently comes with lower potential profit margins, but it is a mathematically guaranteed way to win every single time.