Arb Betting: How an Oddsmaker Beats Sportsbooks With a Micro-Investment Strategy
Betting on sports as an alternative to playing the stock market is fraught with risk – but one oddsmaker, formally known as a “trader” in the gambling industry, says nailing arbitration betting is near guaranteed to beat the books and short-term investing in the stock market.
We’ve interviewed an active North American-based trader, who made 300% his initial stake within three years through arbitration betting across sports betting sites. He has requested we keep his identity anonymous for legal matters, so will be referring to him simply as “the Trader.”
What’s the catch with arb betting? Sportsbooks hunt arbitration bettors, known as arbers, so you have to bet with caution and precision.
Arbitration betting is the practice of spotting odds discrepancies across sportsbooks and locking in profit by wagering on both outcomes (win or loss) in a game or event.
When done right, arbers can yield far greater returns than the 4-6% expected on the stock market.
But there are also drawbacks to arbing, and our fascinating interview dives into the pros and cons of arbitration bets.
Arb Betting Key Takeaways
- Arbitration betting spots inefficiencies and inconsistencies in sportsbooks to secure profit no matter the result
- The Trader often beats the stock market on percentage return per bet over 7%, using that strategy to earn a 300% return over a 3-year period
- Arbitrage betting has an earnings/profit ceiling at around $2,000-4,000 monthly, as bookies restrict obvious and/or frequent arb betting activity
- To dodge sportsbook monitors and account limits, the Trader plays “dumb bets” to look like a recreational bettor
- Arbing over $100 is the fastest way to getting barred by sportsbooks
Meet The Arbitrage Betting Insider – The Trader
The Trader is not your typical bettor, using his analytical brain to spot and position his wagers as sure bets whenever possible. As a trader, he began his career at a prominent North American Betting Operator in 2023, as regions began to legalize and regulate iGaming. This was a departure from his previous education and career in STEM, utilizing his previous skills of data analysis and incorporating his sports fan intuition.
“As a diehard sports fan growing up, I decided I wanted to pursue something more towards math and sports,” says the Trader. “Pricing mathematical models, machine learning, predictive sports, and everything from hitting over/unders, EV bets, and arbing”.
Creating betting odds is a stark career change from STEM, but that occupational pivot has already quickly paid dividends. Through his conviction in data and gambling industry knowhow, he is crushing the financial growth in his typical traditional investments through arbitration betting.
Note: Traders and other employees of gambling operators cannot create an account or bet on their own platforms.
Arbitrage Betting Explained — The “Risk-free” Bet That isn’t That Exciting
“Arb betting is the cornerstone of my sports betting strategy and a pillar of my “investments”. It’s not the most lucrative way to make money, but it’s guaranteed money,” says the Trader.
If someone told you that you could make 300% profit betting on the sport you love over a three-year period, and that you’d probably beat the stock market in doing so, you’d jump at the chance… right?
Well, what if they explained you’d need to spend hours a day pouring over sportsbooks looking for tiny inefficiencies in the odds – often not on sports you like or know anything about – perhaps winning $10-15 at a time?
And what if there is a cap on how much you can expect to earn? Still sound good? Then arbitration betting might be for you.
As the Trader explains: “Arbitration betting is when somebody finds an inefficiency in the market, and is able to bet on both sides of an outcome while profiting in either case.
“For example, you see an NHL betting market on Connor McDavid to score a point, let’s say it’s 50/50 odds for the sake of it. One sportsbook says yes he’ll score a point at +110, and another sportsbook says he won’t score a point at +110, that right there is an arb.
“If you put $100 on both the yes and no, in either case, you’ll win $220, which makes up for the money you’ll lose on the other side of the bet and covers the initial bet you put in. You’ve made a guaranteed $20 at zero risk.
“Arb bets aren’t always big, but they’re there. It’s just the matter of finding them across different gambling sites.”
Arbs and Risk Explained
There are, of course, some issues with arbs that can catch bettors out. A big problem is that arbing requires diligent work and bets rarely align with your interests.
As the Trader explains: “If you sit me in front of a computer for four hours during the busiest time of the year when all the big leagues are playing on a Sunday, I can find about a dozen (arbs).
“That’s with some really diligent and active searching.”
“I keep a personal log, and my arb average found per day is calculated at 0.6, and that includes days where I’m not looking or around to place a bet. We’ll say an average day is about six or seven arbs when I’m checking out betting lines.”
That’s a lot of time spent scraping for a few dollars per bet, and requires arbers to bet with their head, not their heart.
What’s more, odds can change in an instant, which leaves bettors exposed to a one-sided bet while they place their wagers.
“I’ve been caught in this scenario before,” he admits. “It was the NBA Draft this most recent year, I bet on a player to be selected under 8.5 overall. And I bet roughly $80-90.
“When I went to bet on the other side on a different sportsbook, I was a little bit too slow. I tried betting on it, the odds changed and the arb was gone.
“I was stuck on this one side of the bet and I had to hope and pray that it was going to be correct at the risk of losing $80-90.
“What do you know, I was lucky that day and things worked out in my favor. This player got selected 8th overall and I was able to make a profit on a bet that I had no intention of making to begin with, because I didn’t want to risk $80-90 on something I had no control over.
“You gotta be fast. If you’re not fast enough, you can get stuck betting on something you have absolutely no knowledge or interest in, all while having a few hundred bucks hang in the balance of “I guess it might work?”.
The Methodology Behind His Arbitrage Betting
The Trader doesn’t place arbitrage bets like normal people place punt bets. He is constantly watching markets and spotting discrepancies so that he can place arb bets on his personal accounts.
This isn’t gaming, it’s shopping. He shops odds at over a dozen regulated and offshore sportsbooks, and uses a strict formula to deliver a drip-feed of successful arbs.
- Spot discrepancy
- Place first bet
- Place hedge fast
- Track
- Repeat
As he admits, arbing isn’t exciting like sports betting is, which is why most people don’t bother with it.
“People gamble because they want to have fun,” says the Trader. “It’s great to place a bet on your favorite player to hit a home run. They don’t want to bet $300 on someone to not hit a home run and $60 for him to hit a home run, just to win $15. People don’t get a rush out of it.”
According to him, sports betting sites profit from bettors not being shrewd enough with their money and betting with their heart, not their head.
“The money’s not always that big,” he adds, “But when you add up the $7-15 profit across a bunch of bets, and when you do it 150+ times in a month, suddenly you’re looking at earnings potentially in the thousands. It’s about consistency.”
Best Bets for Arbitrage
So which sports and what types of bet attracts an arber’s eye? According to the Trader, you don’t have to become an expert in niche leagues.
“My favorite streams for arbs are the big core four of North American sports between NFL, MLB, NBA, and NHL,” he says.
“Go to playoff odds and win totals, and compare those across six different sportsbooks. You’ll find Sportsbook A has Team X at +250 to make playoffs, and Sportsbook B to miss playoffs at -200.
“The positive number has to be bigger than the negative number, which means it’s an arb.
“When it comes to niche leagues, I look at player props because they won’t always have futures. WNBA in their earlier years had tons of opportunities when it came to threes, rebounds, and assists for individual players. It was a huge money maker for me.”
As for bets to avoid, he knows where to steer clear.
“Moneylines, spreads, and totals will almost never have arb opportunities,” he says. “I’ve only seen a moneyline arb once for a preseason NFL game, so don’t waste your time looking at moneylines.”
The Human Error Economy: Where the Best Mistakes Live
While some sportsbooks infrequently provide odds inconsistencies based on their take and aspects like localized preference (a Texas book will always have shorter odds on a Texans win, for example), there’s another significant element of arb betting that, in many ways, is the pot of gold at the end of the rainbow: unchecked human error.
Mistakes are most commonly found in niche markets that aren’t linked to an API, or that don’t have a trader continually assessing the odds.
“A lot of the time when it comes to live betting and pre-event (bets), there will be odds provider services that change the odds (for the bookie),” says the Trader. “But when it comes to certain types of bets, like futures, political events, etc. typically there’s someone behind the screen changing those odds.
“If the person doesn’t stay up to date or pay attention to the information, or is just flat out not updating the odds after a while, those odds get stale, and stale odds are profitable odds.
“And error when it comes to a market, means potential for profits.”
According to the Trader, arbs are a sign of “negligence” on behalf of the sportsbook and bettors have every right to exploit it.
No wonder, then, that another great place for arbitration bets are, as he puts it: “Niche leagues like the WNBA, Premiere Lacrosse League, and even 2nd League Czech Floorball.
“The smaller the league, chances are someone is doing it themselves, and when someone is doing it themselves human error creeps in.”
“There’s just not a lot of data that goes into those. And because there’s not a lot of people betting or punting on it, not as much profit from a sportsbook perspective, they won’t put as much money into predicting the markets.
“They just want to offer it to have it available for those five people, like myself, that want to bet on it.”
Arbitrage vs Investing
What attracts many people to sports betting is the potential of greater returns than traditional financial investments. Of course, there are also significant risks when taking a punt on sports in the traditional way. Your bet can always lose.
Arbitrage acts as a mid-point between sports betting and investing. You bet within an expected level of return and lock in small profit every time.
“All arbs are bets, but not all bets are investments.”
“The way I see it, investments and arbs are the exact same,” says the Trader. “I know an arb is worth the risk of getting caught or limited by calculating the return. If an arb doesn’t yield 3-4% YoY annualized, then it is not worth doing.
“The return you get from arbing is better than what you can guarantee off the stock market. The stock market goes up roughly 7% annualized YoY over the past 30 years or so.
“Seven percent when it comes to arbs isn’t that hard to beat. Seven percent of $4,000 is $280. That’s not that hard to make over the course of 365 days.
“You make a dollar per arb over the course of the entire year, you’ll make more than you’d make hypothetically on the stock market.
“It’s always better to do the arbs, but it’s just a matter of how well you can find them, how often you can find them, and how much you can take advantage without a sportsbook potentially limiting you.”
The Trader admits that sportsbooks eventually get wind of what arbers are doing, and move to limit their activity.
For that reason, investing remains a more secure long-term financial choice.
“You can’t do more than a few thousand into all of your arbs combined across all your books without being limited,” he says.
“I invest over a broad range of risks between high, medium, and some bonds and GICs to diversify my portfolio.
“That said, in a dream world with the same capital, you’ll make more and steadier money (arbing) than in investments into the stock market.
“But that’s the big thing though, we’re not talking the same amount of capital. When you are on the stock market, you can invest hundreds of millions of dollars if you so please. When arbing, you only get up to $2,000-4,000 as initial capital if you want to do it indefinitely.
“Arbs can beat the stock market on percentage return. Investing wins in absolute dollars.”
The Myth of “Vegas Knows” – Odds are an API Product with a Markup
Not many people know more than the Trader about how the odds work. Most of us assume sportsbooks set their own odds, and have teams of people pouring over markets and game schedules.
But he explains that the majority of odds are automatically set through third-party services, with the bookie creating a discrepancy based on their take.
“These sports books have odds providers that grant them odds through their APIs,” says the Trader.
“It’s up to the sportsbook to then take those numbers or percentage odds and then warp them into being prices that users can bet on in their games.
“Maybe they’ll take a 2% margin… Sometimes they’ll take it up to 7 or 10% depending on the odds.”
“So, if you operate in Texas and you’re a Texas sportsbook, chances are you’ll give worse odds on the (Texas) Rangers or (San Antonio) Spurs to win games because people will bet on it regardless, because they’re homers.”
Sportsbooks predominantly use APIs to get odds for traders, yet the price customers receive can vary across sites. That’s why different teams may be favorites to win the World Series or Super Bowl, depending on who you’re betting with.
“When it comes to certain types of bets, like futures, political events, etc. typically there’s someone behind the screen changing those odds,” the Trader adds.
And it’s these human-controlled markets that stand out for arbitrage bettors.
How Sportsbooks Spot Sharps and How to Stay Invisible
Arb betting has a lifespan much shorter than investments because sportsbooks eventually spot what the arbs are doing. After all, sportsbooks evaluate customers based on:
- Profitability and success rates
- Bet types
- Percentage of niche bets
Books can spot sharp behavior even if you’re losing, particularly if you’re hopping between niche sports and ignore the popular markets.
“Erratic betting habits between the amount bet, sports, leagues, and teams are red flags. If you want to avoid a limit or ban, there also needs to be at least a minor level of consistency across your betting or a willingness to chuck some change at the casino.”
“You can be a terrible bettor but still win eight straight bets looking like some kind of genius, but over the course of 1,000 bets, you’re going to end up losing money,” says the Trader.
“There’s a multitude of ways traders will evaluate the potential profitability of a customer and whether or not they want them to play on their book.
“This could range from whether they’re betting on arbs that they can see on other large books in the region, odds before they change minutes or seconds before they change, or it could be a bunch of different factors and that’s where intuition and data come in as a sports trader.”
How He Stays Invisible
Betting under the radar is a skill that has to be learned with patience and practice.
The Trader’s advice is clear: “You can keep the spotlight off by never placing a bet higher than $70 or $80 a bet. You won’t make as much from the arb, but it’s better to live another day than to be limited.
“If you want to live dangerously, drop $5,000 at it, get limited within a month, and leave with $1500 more in your pocket.”
You can also play “dumb bets” and throw a chip or two at an online casino to look more like a normal bettor. Even if you win, playing casino games shows your account is willing to play against the house and table odds.
What Arbitrage Reveals About Modern Markets
Arbitration betting exists because modern sportsbooks leave themselves exposed, usually through human error.
Sportsbooks provide odds on niche events and small props, in the hope of attracting more bettors. However, these betting markets can carry discrepancies across bookies, as they’re not created and monitored by an API or centralized system.
The odds discrepancies are never too big to cause the industry harm, so arb bettors get away with making a few thousand dollars before eventually being limited by sportsbooks.
Arbs exist because humans exist. And, as the Trader puts it, “error when it comes to a market, means potential for profits.”
