Betting arbitrage, surebets, sports arbitraging is a particular case of arbitrage arising on betting markets due to either bookmakers' different opinions on event outcomes or plain errors. By placing one bet per each outcome with different betting companies, the bettor can make a profit. As long as different Bookmakers are used for arbitrage betting the Bookmakers do not have a problem with this. Each Bookmaker will still make profit due to their calculations.In the bettors' slang an arbitrage is often referred to as an arb; people who use arbitrage are called arbers. A typical arb is around 2%, often less, however 4%-5% are also normal and during some special events they might reach 20%.Arbitrage Betting involves relatively large sums of money (stakes are bigger than in normal betting) while another variety, betting investment, means placing relatively small bets systematically on overvalued odds most of which will lose but some win thus making a profit.The best way of generating profit, which has been established in Britain via sports arbitrage, consists of 'key men' employing others to place bets on their behalf, so as to avoid detection and increase accessibility to bookmakers. This allows the financiers or key arbers to stay at a computer to keep track of market movement.For an individual bookmaker, the sum of the inverse of all outcomes of an event will always be greater than. The fraction above 1, is the bookmakers return rate, the amount the bookmaker earns on offering bets at some event. Bookmaker 1 will in this example expect to earn 5.6% on bets on the tennis game. Usually these gaps will be in the order 8 - 12%.The idea is to find odds at different bookmakers, where the sum of the inverse of all the outcomes are below 1. Meaning that the bookmakers disagree on the chances of the outcomes. This discrepancy can be used to obtain a profit.For instance if one places a bet on outcome 1 at bookmaker 2 and outcome 2 at bookmaker 1:Placing a bet of 100$ on outcome 1 with bookmaker 2 and a bet of $100 * 1.43 / 3.9 = 36.67 on outcome 2 at bookmaker 1 would ensure the bettor a profit.In case outcome 1 comes out, one could collect r1 = $100 * 1.43 = $143 from bookmaker 2. In case outcome 2 comes out, one could collect r2 = $36.67 * 3.9 = $143 from bookmaker 1. One would have invested $136.67, but have collected $143, a profit of $6.33 (%4.6) no matter the outcome of the event.So for 2 odds o1 and o2, where o_1^{-1} + o_2^{-1} < 1. If one wishes to place stake s1 at outcome 1, then one should place s2 = s1 * o1 / o2 at outcome 2, to even out the odds, and receive the same return no matter the outcome of the event.Or in other words, if there are two outcomes, a 2/1 and a 3/1, by covering the 2/1 with $500 and the 3/1 with $333, one is guaranteed to win $1000 at a cost of $833, giving a 20% profit. More often profits exists around the 4% mark or less.Reducing the risk of human error is vital being that the mathematical formula is sound and only external factors add "risk". Numerous online arbitrage calculator tools exist to help bettors get the math right.
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