Arbitrage betting on horse races is a technique that allows you to generate risk-free profits regardless of the outcome. This done by taking advantage of significant mismatches between the odds of a horse or horses winning.
What is an arbitrage bet?
An arbitrage bet is a bet that guarantees a profit, regardless of the outcome of the event.
Arbitrage bets are made possible when there is a discrepancy in the odds offered by different bookmakers.
Arbitrage bets are often made by gamblers who use sophisticated software to identify mismatched odds in real-time. Many online bookmakers now offer Odds Matching services which make it easy for punters to find and take advantage of arbitrage opportunities.
Suggested Resource: Check out our article on the best horse betting books where we list out some awesome and highly entertaining reads. You will learn more than you ever thought you would about arbitrage betting and how odds work!
How does an arbitrage bet work for horse betting?
An arbitrage bet is a type of bet where you place two bets on the same event with different bookmakers — one bet to win and one bet to lose. You bet in opposite directions on the same event with different bookmakers offering different odds on that event.
In order for this to work, you must find two bookmakers with significantly different odds on the same event.
This is done by using a simple formula:
(odds at bookie 1 * stake at bookie 2) – (odds at bookie 2 * stake at bookie 1) = guaranteed profit
Here’s an example to illustrate:
- Bookmaker 1 is giving 3/1 or 1.5 odds for Horse A to win.
- Bookmaker 2 is giving 3/1 or 4.0 odds for Horse A to win.
Here are the odds each Bookmaker is offering for Horse A to win:
| Bookmaker | Fraction Odds | Decimal Odds | Probability | Arb Leg & Amount |
| Bookmaker 1 | 3/1 | 4.0 | 25% | BET $100 |
| Bookmaker 2 | 2/1 | 3.0 | 33.3% |
Here are the odds each Bookmaker is offering for Horse A to lose (lay bet):
| Bookmaker | Fraction Odds | Decimal Odds | Probability | Arb Leg & Amount |
| Bookmaker 1 | 1/3 | 1.33 | 75% | |
| Bookmaker 2 | 1/2 | 1.5 | 66.7% | HEDGE BET $266.67 |
To profit from this difference in odds between Bookmaker 1 and Bookmaker 2 on the same horse, you would place two wagers as follows:
Bet for Horse A to win: $100 with Bookmaker 1 at 3/1 or 4.0 odds.
Hedge bet for Horse A to lose (lay bet): $266.67 with Bookmaker 2.
Your total stake is $100 + $266.67 = $366.67
If Horse A wins, you get a payout of $400 from Bookmaker 1 (4.0 x $100 = $400) and you lose your stake of $266.67 from Bookmaker 2. The net payout is $133.33. Subtracting your $100 stake with Bookmaker 1 results in a profit of $33.33.
If Horse A does not win, you get a payout of $400 from Bookmaker 2 (1.5 x $266.67 = $400) and you lose your stake of $100 from Bookmaker 1. The net payout is $300. Subtracting your $266.67 stake with Bookmaker 1 results in a profit of $33.33.
This is risk-free profit opportunity to make $33.33 by finding Bookmaker 1 and Bookmaker 2 who had sufficiently divergent odds on Horse A to win the race.
In real life, you also need to take into account each bookkeeper’s fee, which is the amount they take out of the bet in exchange for matching bets, doing the accounting, collecting wagers and paying out to winners. Unless you’re great at complex math, it’s always better to use arbitrage software to calculate the odds.
The key to making a profit from an arbitrage bet is to ensure that you place your bets at the correct odds. This can be done by using a horse racing betting calculator or arbitrage software.
The benefits of arbitrage betting
Arbitrage betting is a great way to make money betting on horse races. The key is its risk-free nature.
#1 You can make a profit no matter the outcome
Arbitrage betting is a technique that allows you to place bets on all possible outcomes of an event and guarantee yourself a profit. This is possible because bookmakers constantly update their odds to reflect the latest information about an event, but the bookmakers don’t always get it right.
By placing bets on all possible outcomes, you can exploit these discrepancies and guarantee yourself a profit no matter what happens. Arbitrage betting is a legal and risk-free way to make money from sports betting. It’s not gambling because you’re not relying on luck, you’re using your knowledge of the sport to place bets that will always give you a profit. There is no element of chance involved. You are simply taking advantage of the fact that bookmakers don’t always get it right when they set their odds.
There are many different types of arbitrage bets, but the most common and simplest to understand is the surebet.
A surebet is a bet on two outcomes where you will make a profit no matter which one wins. For example, if Horse A is quoted at 2/1 and Horse B is quoted at 3/1, you would bet $10 on Horse A and $20 on Horse B. If Horse A wins, you would make a profit of $10 (your stake plus winnings). If Horse B wins, you would make a profit of $10 (your stake plus winnings). Either way, you would end up $10 in profit. By placing surebets, you can be certain of making a profit no matter what happens in the event.
#2 You can hedge your bets
The key to successful arbitrage betting is to find the two bookies with the most different odds, then bet in opposite directions with the right stake sizes.
Betting on the same event in opposite directions is called a “hedge”. But it’s only a correct hedge if the stake (bet size in dollars) on both sides is made equivalent on a risk-adjusted basis.
You can’t just bet equal amounts on both legs of an arbitrage bet. Since the odds given by both bookmakers are different, then the payouts are not equivalent, either. So the stake size of the hedge bet (the lay bet with Bookmaker 2 against Horse A in the example above) must be risk-adjusted according to the size of the main bet (the bet with Bookmaker 1 above). The key to making an arbitrage bet risk-free is to size the hedge bet correctly, and that takes some math.
Again here’s the formula:
(odds at bookie 1 * stake at bookie 2) – (odds at bookie 2 * stake at bookie 1) = guaranteed profit
For example, let’s say that Bookie A is offering odds of 2.0 (decimal) on Horse A to win, and Bookie B is offering odds of 3.0 on Horse A to win. We know that we will make a profit if Horse A wins, so we need to place our bets accordingly. Using the formula above, we get: (2.0 * 100) – (3.0 * 100) = 100 – 300 = -200 This means that we need to place a bet of $100 with Bookie A and a bet of $300 with Bookie B. If Horse A wins, we will receive $200 from Bookie A and $300 from Bookie B, giving us a total profit of $100.
#3 You can take advantage of bonuses and promotions
Arbitrage betting takes advantage of the differences in calculated payouts between different bookmakers in order to guaranteed profit. Bookmaker websites often have bonuses or promotions available that, in essence, change the odds of making a bet in one venue vs. another. This can create arbitrage opportunities that you can take advantage of between online bookmaker sites.
There are various websites that list arbitrage opportunities, or you can do your own research using odd comparison websites. Once you’ve found an arbitrage opportunity, all you need to do is place your bets with both bookmakers and then sit back and wait for the event to take place.
This video should help understand different ways to bet on horses, including arbitrage bets:
The Risks of Arbitrage Betting on Horse Racing
If you are careful and do your research, arbitrage betting can be a profitable way to bet on horse racing. However, it is important to be aware of the risks involved before getting started.
Arbitraging Horse Bets Can Get Very Complex Fast
You need to be VERY good at utilizing horse racing statistics and calculating complex odds.
Multiple horses run in every race. This means the odds of any one horse are a combination of all the odds of all the horses winning or losing. While you can simplify arbitrage betting by betting on a winning horse, then betting against that same horse with a lay bet elsewhere, these arbitrage opportunities can be fairly rare.
So if you’re going to get into arbitraging horse bets, you need to be able to efficiently take advantage of the odds on muliple horses at once, across multiple bookmakers. You need to place multiple bets very quickly. This gets mathematically complex, but it can also be more profitable and offer more frequent risk-free bets.
With this added complexity comes risk — if the odds of the horses you bet on change (and they do constantly), you could end up losing money by not keeping up with the latest odds across multiple horses and multiple bookies.
You need to have an excellent understanding of odds
In order to be successful with arbitrage betting, you need to have a good understanding of odds. Odds are the probability of an event occuring, and are usually expressed as a ratio. For example, the odds of flipping a coin and it landing on heads is 1:1, or 50%. The odds of flipping a coin and it landing on tails is also 1:1. The odds of rolling a dice and it landing on six is 1:6, or 16.67%.
Calculating odds can be done by taking the number of ways an event can occurr, and dividing it by the number of ways it cannot occur. For example, the odds of rolling a dice and it landing on six is 1 (because there’s only one way it can happen) divided by 6 (because there’s five other numbers it could land on), which equals 0.1666667, or 16.67%.
When you’re arbitrage betting, you’re looking for situations where the odds offered by different bookmakers are not the same. For example, let’s say that bookmaker A is offering odds of 2:1 (or 33%) on horse A to win a race, and bookmaker B is offering odds of 5:2 (or 28%) on the same horse. In this situation, you would bet $10 with bookmaker A and $20 with bookmaker B. If horse A wins the race, you would receive $30 from bookmaker A and £50 from bookmaker B, for a total profit of $20.
To make this work, you need to not only understand fractional and decimal odds, but the probabilities each represents. If you place multiple bets on a race to capture the cumulative probabilities across horses and bookmakers, then you not only must understand the odds intimately, but have powerful software at your fingertips and fast access to different bookmakers’ odds in real time.
You need to be quick
Arbitrage betting is all about being quick. The aim is to find two bookmakers offering different odds on the same event, then place your bets so you lock in a profit whatever the outcome. To do this you need to be able to act fast, and that means having your bookmakers’ accounts ready to go before you start looking for arbitrage opportunities. You should also have your betting strategy planned out in advance.
Finally, arbitrage betting can be time-consuming and complex. You need to carefully research the odds offered by different bookmakers before placing your bets, and then monitor the odds throughout the race to make sure that they don’t change unexpectedly.
You need to have enough money to cover all your bets
You need to have enough money to cover all your bets. If one of the horses you bet on ends up losing, you will still need to pay out on the other bets. This means that you could end up losing money if the race doesn’t go as expected.
Second, there is always the chance that one of the bookmakers will refuse to pay out on your bet. This is relatively rare, but it can happen if the bookmaker suspects that you are arbritage betting.
Steps to Place an Arbitrage Bet
Step 1: Find a suitable race
You should look for a race with at least eight horses running. The more runners in a race, the more likely that there will be some discrepancy in the odds offered by different bookmakers. You should also try to find a race where there is a clear favorite. The favorite will usually have odds of around 3/1, which means that you will need to find two other horses with higher odds in order to make a profit from your bet, or at least one other bookmaker with significantly different odds on one of the top horses.
Step 2: Find significantly differing odds
This is often the hardest part, and it’s why you need to be quick and use arbitrage software most of the time. Ideally, you are looking for two or more bookmakers where the implied probabilities on the same horse at least 8-20% different. From our example above you can see Bookmaker 1 and Bookmaker 2 have probabilities that are 8.3% different (column 4 in the table below).
| Bookmaker | Fraction Odds | Decimal Odds | Probability |
| Bookmaker 1 | 3/1 | 4.0 | 25% |
| Bookmaker 2 | 2/1 | 3.0 | 33.3% |
Step 3: Calculate and place your bets
You will need to have accounts open with multiple bookmakers in order to take advantage of the opportunity. Once you’ve found a differing odds opportunity between bookmakers, you will then need to calculate how much money you need to bet at each bookmaker in order to guarantee a profit (use the formula above or arbitrage software to calculate your stake sizes). Then simply place your bets at the respective bookmakers.
Be sure to keep track of the odds and bets placed. The odds can change rapidly so you need to lock in the bet as soon as possible.
It is also important to note that some bookmakers may limit or prohibit arbitrage betting. If this is the case, you will need to hide what you’re doing somehow, or find another bookmaker that does not have such restrictions.
FAQs About Arbitrage Horse Betting
Is arbitrage betting worth it?
There are often slim profit opportunities in arbitraging horse racing bets. Because software has made things highly efficient, and bookmakers have gotten good at calculating their own odds, you’ll often find that profit ranges from 1 to 2% of your whole stake. If you place a $1,000 total wager on an arb, a 1% profit margin will only net you $10.
How do you spot an arbitrage bet?
3 methods for locating arbitrage betting opportunities:
- By looking through the bookmaker websites and using free calculators to see if there is any potential for arbitrage.
- Finding arbitrage betting chances for you using free arb hunting software.
- Using software for compensated arbitrage betting.
How do you make money laying horses?
Picking horses to lose is not at all simple. A new frame of mind is needed. When you place a lay bet in an arbitrage situation, you are not only betting against a favorite (typically), but you must carefully calculate the stake size so you get a proper risk-adjusted hedge. And you need to do it very quickly.
Placing a lay bet against a horse winning in an arbitrage situation is different than simply betting against a horse winning nakedly. The former is part of a riskless arbitrage bet, while the latter carries substantial risk and you could lose money as easily (or easier) than you win money.
How do I arbitrage my bet without getting caught?
- Generally, you should not bet so accurately that you’re including the cents or pence in the stake size. That’s a dead giveaway that you’re using arbitrage software. Instead, round you bets up or down to the next dollar or ten dollars (if you’re betting large).
- Further, you should keep withdrawals from your accounts to a minimum — no more than once or twice a month. This ensures your bookmaker sees you as a regular customer, and not one who is sniping arbitrage bets then running with the money.
- Every once in awhile, place a wager on a rare parlay bet.
- A betting exchange can be used to gain some privacy and avoid having all your activities tracked by bookmakers.
- Don’t always place maximum bets. Make some small ones, medium-sized ones and occasional big ones.
- Distribute your arbitrage bets across multiple bookmakers.
- Never place 100% of your bets on smaller markets.
How do I arb a free bet?
If a sportsbook offers you a free bet, you may use it to back one side of a two-way market while backing the other side with real money to ensure a win. This is how you can take advantage of free offers and bonuses to gain risk-free arbitrage opportunities on the horses.
Can you get rich by arbitrage betting?
The quick answer is that you are likely to profit between 1-5% of the stakes you bet with via arbitrage betting. This implies that you may win between $1 and $5 for every $100 you wager in arbitrage bets. Obviously, you need much bigger stakes to really get rich, because 1-5% is very small profit on small bets. Making a living, let alone getting rich, from arbitrage betting on horse races would be quite a challenge.
Aside from the percentages, it might be hard to maintain multiple bookmaker accounts where you’re betting substantial sizes — $10k and above — on every horse race you arbitrage. The market might be just too thin for the size you need to really make big profits.
Is horse betting arbitrage illegal?
Because it improves market efficiency, arbitrage trading is not only permitted but also encouraged in the United States. Arbitrageurs also perform a vital function by serving as middlemen and making markets more accurate and efficient. This includes gambling on horse races.
How does $1000 risk-free work at BetMGM Sportsbook?
A risk-free bet with a $1,000 maximum is available at BetMGM Sportsbook. You may get up to $1,000 in bet credits if it loses. You will earn free bets in increments of 20% if your wager is $50 or more. This implies that you will earn five $200 free bets if your $1,000 wager is unsuccessful. This is not a real arbitrage opportunity — rather it’s a promotion to get you betting more often.
This Video Should Help:
Arbitrage betting is a type of bet that involves the use of a system to profit from discrepancies in prices between markets. It has been used by many different types of people including gamblers, speculators, and traders. Reference: arbitrage betting formula.
Conclusion
A horse betting arbitrage bet is one that allows you to win more money than the odds would normally allow. In it’s simplest form, it is done by betting on the same horse with two different bookmakers in opposite directions. The bookmakers must have sufficiently different odds to create an arbitrage opportunity. If the bets are sized and placed correctly, an arbitrage bet generates risk-free profits.
In conclusion, an arbitrage bet in horse racing is a bet in which you attempt to secure a profit by placing two bets on the same race, with one bet being on the winner and the other bet being on the second, third or fourth place finisher. By doing so, you are effectively hedging your bets and ensuring that you will make a profit no matter which horse wins the race.
By utilizing numerical discrepancies in the available odds, arbitrage betting ensures a profit regardless of whether the back or lay wager wins.
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I am Lawrence (aka “The Horse Better”). I spent 20+ years in financial risk management where I ran large-scale statistical betting models in complex situations. I grew up around horses and I’ve been betting on horse races for about 10 years with good success. I hope my articles provide good value!