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Sports Arbitrage - Getting started

Whilst Sports arbitrage can be a successful strategy to sports bet with, numerous people do not invest the time initially to ensure they are fully equipped before they start. This section explains the main things you need to know in order to get started with Sports arbitrage trading.

Once you have read and fully understood this section, we recommend your read at least The Top 8 Pitfalls of Sports Arbitrage Trading, and The Top 6 Ways Not to Get Limited By Bookmakers before you begin.

Once you start arbitrage trading, you will find the Arbers Guide to Bookmakers a useful resource throughout your trading. We cannot maintain the site without your help, so we'd be grateful if you could sign up to any bookmakers listed by clicking on the links provided on this site.

 

What do you need to get started in sports arbitrage?

The key things you need to know/have start sports arbitrage are:

  1. A method of finding arbitrage opportunities (ie an arb alert service)
  2. A means of placing the bets (ie bookmaker accounts)
  3. Enough capital (cash!) to physically to place the bets (ie a bankroll)
  4. A means for moving this capital between bookmakers (ie electronic funding capability, like a bank account!)
  5. How to put this altogether to place an individual arb
  6. A long-term strategy

 

1.Arb Alert Services

There was a time, before the internet, that meant there were more arbitrage opportunities in existence, but it was more difficult to identify them. You could try to become an expert in which bookmakers tend to have better prices than the rest of the market, and start picking these yourself, but we don’t recommend this. There are already decent software programmes that can scour the internet all day, every day to identify arbitrage opportunities for you to exploit. There are a number of different services that you can try for this, however, based on our experience, considering quality and value for money, we recommend using 2 in particular:

  • Arbets.com – particularly for tennis and baseball arbs
  • Arbitragepro.com – particularly for soccer arbs

Arbets.com offers free arbs under 1%, which is really useful for beginners wanting to practice/learn to arb without need to pay for a subscription service.

Although the arb services sometimes provide this, it is also worth having your own arb calculator tool (click here for an online calculator, or if you understand the maths, create your own in excel). Arb calculators are useful if you want to double check the return of an arbitrage opportunity, or perhaps more importantly, if you have to readjust your arb stake sizes or odds for one reason or another, and you need to calculate the stake sizes required to ‘get you off risk’. This is covered more in the Putting it together section.

 

2.Bookmaker accounts

You can’t place arbitrage bets without being signed up to bookmakers. When you are starting out, this gives rise to a number of opportunities to take advantage of sign-up offers too.

However, you need to be wary of which bookmakers to use when arbitrage trading. Some bookmaker sites are set up as deliberate scams. Keep an eye on our Sports Betting Companies to avoid section.

To avoid signing up with known scandalous bookmakers, we recommend that you stick to the sports betting companies listed in our Arbers guide to bookmakers, and sign-up using the links provided.

All bookmakers listed in the Arbers guide to bookmakers have a Sports Book Review rating of A.

Signing up with bookmakers is relatively easy. However, maintaining complete access to bookmakers can be more of a problem for arbitrage traders, since some bookmakers do not like arbitrage trading, and will be quick to limit your accounts if you are not careful. A strategy is required therefore to ensure this does not happen too often. Top 6 ways NOT to get limited by bookmakers for more.

 

3.Bankroll

Arbitrage trading is about taking advantage of small levels of return (1-3%), but reinvested a number of times in short space of time (such as a week). Investing capital with a bank for arguments sakes can generate a return of 0-5%, however this over the period of a whole year. With arbitrage trading, you can match this return in a single bet, which could be taking place the very same day.

Therefore, firstly you need some initial capital to start making the trades. And secondly, (and often overlooked) you need some capital to spread across bookmakers in order to make trades.

Your starting capital doesn’t need to be huge, but £500 is a reasonable starting point. Using £500, if you place 10 arbs (at £250 each) in 1 week at 2%, this would generate a £50 profit.

As your experience grows, and you increase your bankroll, stake sizes, and number of bets, you will obviously increase your profits. However as you do this, bankroll management will become even more important, and you will need to have a strategy to ensure you manage this accordingly. See the strategy section for more.

 

4.Electronic funding

The ability to fund bookmaker accounts may seem obvious at first. However, as an arbitrage trader, you will potentially be dealing with bookmakers based overseas, or who do not accept conventional methods of payment without charging, or even at all. In addition, you can protect yourself from the risk of a bookmaker going out of business and potentially putting your funds at risk by using an e-wallet.

There are a number of e-wallet services that you may come across, but our recommended services are listed below, and registering to them is completely free and commits you to nothing:

  • Moneybookers (www.moneybookers.com) - Arguably the best e-wallet for sports arbitrage, as it is accepted by the majority of online sportsbooks as a method of deposit and withdrawal, often free from fees. Moneybookers accepts every major currency, and membership from every country in the world, except countries listed by the OECD.
  • Neteller (www.neteller.com) - Neteller is accepted as a payment method in at least many places as Moneybooks, however they only accept four primary currencies (USD, EUR, GBP, CAD), they have larger fees, and more limitations.

 

5. Putting it altogether

To put it all together, the key things you need to consider are:

  1. Have I identified an arbitrage opportunity?
  2. Do you need to consider the rules of the different bookmakers?
  3. Do I have accounts with the relevant bookmakers?
  4. How much in total do I want/have to stake?
  5. What is the stake required for both sides of the arbs given the odds?
  6. Does the maximum bet size at both bookmakers enable you to place this size of bet?

To make this section as useful as possible, we’ll walk through an example of an arbitrage opportunity, and how these steps will be considered:

 

1. You are alerted of the following 2%+ arbitrage opportunity on a Tennis game through the Arbets service(odds in decimals):

Rafaeal Nadal 1.5 at Pinnacle Sports, and Andy Murray 3.2 at Sportingbet, representing a X% arbitrage opportunity.

In order to ensure this is an arbitrage opportunity, you check with your arbitrage calculator. The calculator ensures this is correct, and as a quick check on a normal calculator, you make sure that (1/1.5)+(1/3.2) is less than 1 (note the sum gives c0.9792, which indicates an arb of c2.13% (1 minus 0.9792).

 

2.You check the arbers guide to bookmakers to ensure both Pinnacle Sports and Sportingbet have the same rules regarding player retirement. Both only void a bet if one set hasn’t been completed, so you pursue the arb.

 

3.You have accounts with both Pinnacle Sports, and Sportingbet.

 

4.You have a bankroll available of £1000, however for your first arb we wouldn’t recommend using the full amount, so let’s assume you start off with a total stake of £200.

 

5.You put the information into an arb calculator. It recommends a stake of £136.17 on Rafa, and £63.83 on Murray, returning c2.1%.

You play around with the arb calculator to make the numbers round as part of a strategy not to get limited by the bookmakers (see Top 6 ways NOT to get limited by bookmakers).

You decide to bet £135 on Rafa, and £63 on Murray.

 

6.You check using the arbers guide to bookmakers whether the maximum stake information is available before betting on both the sites. Pinnacles Sports shows the max bet first, but it’s unclear on Sportingbet.

This part is important.

You go to Pinnacle Sports first, and check (not bet yet) whether it will let you bet £135. It will.

You set up your computer screen(s) to have the bets up with both bookmakers at the same time.

You double check the odds are what is required.

Then you go to Sportingbet to and try to place the full £63. It lets you.

You then place the £135 bet with Pinnacle Sports.

Both bets are on. If rafa wins, you net 2.27%. If Murray wins, you net 1.8%

 

What things could have gone wrong?

 

What if the Tennis betting rules were different?

If this is the case, you can either: 1) not place the bet, 2) find another sports betting company with the same odds but same rules, or 3) take the risk.

We don’t recommend taking the risk, particularly when you’re getting started, but depending on the what the difference in the rules is, you may feel some exposure is worth the risk given the size of the arb.


What if the odds had changed before you put the arb on?

This sort of thing can happen. If it does, recheck the profitability of the arb on an arb calculator. If it’s no longer an arb, leave it. Wait for another one to come along. You need to be patient. There will always be more arbs. Don’t chase them.


What if Sportingbet hadn’t let you put the full amount on?

Again, this can happen. If the odds are still ok, then you just need to readjust your Pinnacle stake to the appropriate amount. You already know that Pinnacle will let you bet at least £135 because you checked it first (this is why it was important to do that first), so putting on less won’t matter.

For example, if Sportingbet only let you put on £50, if you put this into the arb calculator, you now need £106.67 to optimise the arb. You decide to place £105 on Rafa to keep the numbers round, which gives you a net return of c1.6% if Rafa wins, and c3.2% if Murray wins.


What if the Pinnacle odds changed after you placed your bet with Sportingbet?

Don’t panic. This can happen too, although if you’re reasonably quick it shouldn’t happen too often. Re-check the bet with your arb calculator. It may still be an arb but for less profit, or it may just be a loss making bet. Either way, you still need to trade out of your position. Sometimes you need to just take the hit. It should still be only small margins, so if you arb at a 1% loss, you know you can make it back soon enough with another arb. Do not risk it, by leaving yourself exposed to one side of the bet. Obviously you can get lucky, but that is not what arbitrage trading is about.

 

6. Strategy

Once you’ve got the hang of the basics, and can actually physically place an arb, there is still some thought required to actually be successful.

The key things to think about are:

  • Establishing a routine and getting organised
  • Maintaining bookmaker accounts
  • Managing your bankroll

 

Getting organised

Whether you’re doing this full-time or part-time, we believe it is important to establish a routine. You will not succeed if you’re trying to arb while sitting in the living room looking after the kids and talking to your partner at the same time. You need to set aside some time, in quiet, to focus, get your arbs on, then relax. If you work in the UK, you might like an evening slot during baseball season.

Then you will need to keep a log of things: bookmaker accounts information (sign-ins etc), p&ls, arbs placed. There are costs – you’ll need to subscribe to an arb service of some sort, so you’ll need to figure out how much you need to make to recover these costs, so that you can target a set number of arbs per week to ensure you are actually profitable.

 

Maintaining bookmaker accounts

It is essential for a successful arbitrage operation, to ensure that you maintain high limits on as many bookmakers as possible. You will like have your accounts limited by some bookmakers if you arbitrage full time, because this is how some bookmakers like to protect their own profits from arbitrage traders. Read about some of the main things to think about in the Top 6 Ways NOT to Get Limited by Bookmakers.


Managing your bankroll

Lastly, you’ll need to think about how you will manage your bankroll. There are a few key things to think about here:

  • Keep separate from personal funds
  • Managing withdrawals and deposits
  • Stake sizing and reinvesting capital decisions

 

Keep separate from personal funds

This is simple, but you need to be disciplined. We recommend you ensure your bankroll is separated from other personal funds. This needs to be spare. If you start mixing, you will complicate things.

 

Managing withdrawals and deposits

You need to think about how you deposit and withdraw your funds, for 2 main reasons:

1. Because making huge deposits and withdrawals can alert bookmakers to you being an arber.

2. Because you need to have sufficient funds at the relevant bookmakers, at the right times, to place your arbs.

 

It is not just as simple as withdrawing money in small amounts whenever you want though. Particularly because some bookmakers may charge you for making more than withdrawal per month. Tactically, you can try to indirectly ‘withdraw’ money, by making one bookmaker on the losing side of an arb, therefore all your money will be transferred to the other bookmaker through the winnings. You will need to give this some thought and planning though, and it will come with experience.

For example, you may have 90% of your bankroll stuck in Pinnacle Sports which charges for more than one withdrawal per month, and see an arb opportunity for 2 different betting companies. What should you do?

  • Pinnacle Sports will offer you more arb opportunities than any other bookmaker, so tactically, you could just find a load of other small arbs, and try to get Pinnacle Sports to be on the losing side to more evenly distribute your funds.
  • Or you might need to wait until the next month.
  • Or you might need to make a one-off cash injection elsewhere to place a big arb to make Pinnacle on the losing side so that you can withdraw.
  • Or you might need to take a hit on the fee.
  • Or you could have planned your cashflows more carefully in the first place, and missed out on some arbs with Pinnacle, to ensure you maintained a better distributed cash balance.

 

Stake sizing and reinvesting capital decisions

Linked to the last point above, you need to think about your stake sizes in advance. Keeping smaller stake sizes will enable you to stay under the radar better, and enable you to distribute your cash more evenly across bookmakers.

So you will need to think about the size of your bankroll, your required return, and therefore the size of the stakes you will need to make (start with 10-20% of your bankroll), and number of bets you need to make each week to generate this.

Let’s assume to start you have £1000, and want to make £100 per month initially.

If you are staking on average £200, with 2% arbs, then you’ll need to make 6 or 7 arbs per week at least. Plus, you’ll need to cover the cost of an arb service, say this is £50 per month initially, this means you’ll need to get on over 9 arbs per week. This is all very achievable, and as you increase your bankroll you can increase your average stake and number of bets to increase your return.

Which brings us onto what you do with your return? Initially, we recommend you reinvest it into bankroll, to build your bankroll. Then you can increase your stakes, and return. But after a while, you will want to take some profits. We can’t really advise you on when you do this, but it’s something you’ll need to think about, depending on how reliant you want to become on the income you make from sports arbitrage.

Lastly, before you start, you have any other questions, do not hesitate to contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. , and we’ll be happy to help.

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