What’s Arbitrage Betting and How Is It Used in Horse Racing?

min read
Horses galloping down a track during a horse race.
BetMGM @BETMGM Feb 16, 2023, 7:30 AM

Losing a bet and losing money feels terrible. But what if there was a way to wager on every outcome and ensure a small win every time? Arbitrage betting is known by many names in the sports community. Some call it value betting, miracle bets, or sure betting. But how do arbitrage bets work, and can they guarantee a profit for bettors? Read on to learn more about arb bets and how to use them in your online sports betting

What is arbitrage betting?

In sports betting, the way odds are calculated is not the same in different venues and websites. This means one website can have slightly different odds compared to another, even if they’re analyzing the same race. Arbitrage betting, or arbing for short, is when bettors back and lay the same outcome in a sports event or race. In other words, they bet both for and against an outcome. 

This type of bet exploits the mathematical differences in the available odds between betting platforms and ensures a profit regardless of the outcome. Even though the profit margin is sometimes minimal, when done correctly, arbitrage bets guarantee you won’t lose any money. 

How do arbitrage bets work?

Sure betting works by finding odds from different platforms or bookmakers where the sum of the opposite bets is below 100%. This means these bookmakers disagree on the chances of the outcomes. Betting odds can differ because betting sites include an overround in their pricing to give them an edge. This overround affects the percentage and replaces the true odds with a number that may differ from other sites. 

This difference ensures a profit if you bet on both outcomes but with different bookmakers. To illustrate the point and make the mathematics easier to understand, let’s study a horse racing example.

A simple arbitrage betting example

Arbitrage bets are all about odds and margins. To truly understand and take advantage of these bets, you need to learn how to read horse racing odds. Let’s say there was an upcoming match race between Flightline and Nature Strip. In this example, Flightline is the clear favorite, but betting sites differ on just how much of an advantage he has. On BetMGM, the odds of Flightline winning were set at 1.20, with Nature Strip’s odds at 4.70. But on another sports betting website called Good Bets, Flightline’s odds were placed at 1.29, and Nature Strips’ at 4.00. This setup would be an arbitrage bet opportunity.

Let’s find the highest odds for both horses. The highest odds for Flightline would be 1.29 at Good Bets and the highest odds for Nature Strip are 4.70 at BetMGM. If you bet on both of them, you can get a guaranteed profit no matter who wins. If we decided to wager $500 on both websites, we’d be guaranteed a minimum of $506.09 back. The profit of $6.09 is equal to 1.22%. 

1.22% might not seem like much, but arb bettors usually compound these wins and bet often. Arbitrage bets usually have a one to 10% profit. So to make the effort worthwhile, you need to bet large amounts. The upside is that sure bets can be made last minute by people with zero sports knowledge.

How to find arbitrage bets

Making correct calculations is critical when you’re applying this strategy. A small error can turn a guaranteed win into a costly betting mistake. To find arbitrage bets to place on different types of horse racing events or other sports competitions, you can use arbitrage checker websites. This can save you a lot of time. However, it does mean betting websites can use these very same sites to see if any of their odds can be exploited by sure bettors. Alternatively, you can check and find arb bets yourself. Here’s how:

1. Use odds-checking websites

Use a website to compare odds for sporting events with only two outcomes. You can focus on a website that analyzes NYRA bets or one dedicated to your sport of choice.

2. Calculate odds to find an arbitrage opportunity

You can use an online arbitrage bet calculator for this. If you enjoy mathematical equations, you can calculate this yourself. If you use one betting site or bookmaker, the total percentage of all the outcomes bet simultaneously will add up to more than 100% because of the website’s edge. If the results from different sites add up to less than 100%, this is a sure bet. Here is a formula to calculate this percentage and work out your possible profit.

Arbitrage % = ((1 / decimal odds for first outcome) x 100) + ((1 / decimal odds for second outcome B) x 100)

If we used our earlier example, Flightline’s percentage at Good Bets would be 77,52%, and Nature Strip’s at BetMGM would be 21.28%. This, added together equals 98.8%, showing a 1.2 arbitrage profit. 

3. Calculate your stakes for each betting site

Calculate how much you can afford to bet on each betting site. Make sure your bet is large enough to yield a reasonable profit, with payment fees accounted for. 

4. Place your bet

Once you’ve done all the math, it’s time to place your bet. Read the terms and conditions to find any hidden fees that could nullify your bet profit. Also, make sure you aren’t consistently placing large sure-bets. Betting sites can notice this pattern and terminate your account. 

Arbitrage betting in horse racing

Even though our horse racing example showed two horses racing each other, the reality is that most horse races have six to eight competitors and not two. So how does arbing work in horse racing betting? 

Lay betting to create two outcomes

Betting on each outcome and horse in a race is either impossible or incredibly expensive. This is why arb bettors use lay betting in horse racing. In this strategy, you choose just one horse instead of two. Then you back the horse (bet on it winning) and lay it (bet on it losing) on another betting site. You’ve now reduced the race to two outcomes where one of them will definitely take place and secure you your arbitrage profit. The same equation can be used, but only the highest odds percentages of the horse winning and losing will be calculated and added together. 

With arbitrage horse racing bets explained, you now understand how players take advantage of this loophole in their sports gambling strategy. Are you ready to take your chances and bet on the strongest teams and fighters? Let BetMGM introduce you to the world of sports betting.

You’re always a winner with BetMGM

You don’t need to place arbitrage bets to feel like a winner. With BetMGM, we make players feel victorious regardless of the outcome. When you create a new BetMGM account, your First Bet Offer is up to $1,000. If you lose, you get the amount back in bonus bets. Register to start betting with confidence.

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Our BetMGM editors and authors are sports experts with a wealth of knowledge of the sports industry at all levels. Their coverage includes sports news, previews and predictions, fun facts, and betting.

Our BetMGM editors and authors are sports experts with a wealth of knowledge of the sports industry at all levels. Their coverage includes sports news, previews and predictions, fun facts, and betting.