Explanation of betting arbitration

Betting arbitration explained in simple terms See a simple example Potential disadvantages of betting arbitration

Betting arbitration promises safe returns... the dream, right? It is therefore only logical that this is a subject that is widely discussed within the gambling community. But how does this arbitration work? We explain everything you need to know about it.

Arbitration

Arbitration (or surebet) exploits the possibility of placing proportional bets on each outcome of the same event with several bookmakers, in order to guarantee profits regardless of the outcome.

What is betting arbitration?

Any type of risk-based activity is a search for a price differential. If you can buy something at Factory A for €10 and sell it to Retailer B for €15, you can pocket €5 without taking any risk.

Much of the profits generated by the investment industry are based on this very simple principle (in a more complex form) over a wide range of commodities and assets.

Betting arbitrage is very close to the above analogy, and is used by many bettors to make profits without taking risks.

To explain how this system works and why Pinnacle accepts it, we have created this short video:

Example of a bet with arbitration

To explain how arbitration works, it is best to take a simple example. Let's take the odds of a tennis match between Nadal and Federer, proposed by two hypothetical bookmakers, as shown in the table below.

The margin is indicated for each bookmaker, i.e. its advantage (read this article to understand how to calculate the betting margins). 1 By matching the odds of Federer at Bookmaker A with those of Nadal at Bookmaker B, the margin turns to the advantage of the bettor with a guaranteed return of 4.1% (100 - 95.9 = 4.1). Important thing: your bet must be made in proportion to the odds shown, which results in a guaranteed return of €4.30 that Nadal or Federer wins.

This principle can apply to any betting market (beyond two selections), including handicap betting. It has many applications in live betting, where arbitrage opportunities are constantly available thanks to the "Back and Lay" technique, in a constantly changing market. You can also use free bonuses in an arbitrage bet to ensure you win, but the conditions that apply are restrictive.

Why do arbitration opportunities arise?

Even if you are mainly interested in the benefits of arbitration, it is important to understand how arbitration opportunities arise. The main reasons for this are

The bookmakers don't agree

Bookmakers take a specific position or have an ongoing promotion

Some bookmakers are slow when it comes to changing their odds, or make a mistake

The first of these reasons is the most common, and particularly relevant to Pinnacle, since our risk management policy is considered the best online. Our odds therefore present more arbitrage opportunities than any other bookmaker, especially since we do not offer betting promotions.

Potential disadvantages of betting arbitration

If at this stage you are very keen to make money through betting arbitration, be careful, there are things to consider. Although the mathematical logic of arbitration is good, there are risks associated with seeking and making the required bets. Here are the most important things to consider before you start:

Limitation of bids and closing of accounts

Limits vary according to the bookmakers, which may limit your ability to fully exploit arbitrage opportunities. This is not a problem with Pinnacle, since we offer you the highest limits online.

Some bookmakers do not like arbitrage, because the people who practice it do not match the profiles they are looking for. Pinnacle has a unique volume-based model, so our company does not care about the intent of the bet, and we accept arbitrage.

Cancellation of bets

Bookmakers can cancel bets when mistakes have been made, which can make you take risks on the other side(s). This can easily exhaust your accumulated earnings over a long period of time. Take a close look at the rules used by each bookmaker you are considering using for the arbitration.