What do Amazon, Jim Bean, HarperCollins, and your favorite sportsbooks have in common? They’re focused on maintaining profitability for their owners and shareholders. Regardless of whether it’s a sports betting site or a brand of Kentucky Bourbon, there needs to be a set of unique strategies to ensure that their books stay in the black.
Arbitrage betting severely cuts into sportsbooks profit margins, and they consider arbitrage bettors (arbers) to pose a massive market risk. Consequently, the majority of sportsbooks limit or restrict arbers.
Keep reading about why sportsbooks look at arbitrage betting so negatively, and how bettors use some nifty strategies to avoid getting their accounts shut down or restricted!
What Is Arbitrage Betting Again, Exactly?
Are you new to arbitrage betting? Not to worry! We’ll provide you with a great refresher course.
Arbitrage betting is when—thanks to astute line shopping—bettors can use two (or more) sportsbooks to bet on all possible outcomes of an event. This means that the bettor is guaranteed a profit, regardless of the event’s outcome. Thanks to odds discrepancies at different books, bettors are able to lock in “sure-thing” bets.
To maintain profitability and solvency, these sports betting sites rely on square recreational bettors and generally frown upon finely tuned ‘sharp’ strategies like arbitrage betting.
Why Isn’t Arbitrage Betting More Popular?
The majority of the time, profit margins on arbitrage bets are between 1-5% of an initial stake. As such, it’s challenging to “win big” unless you’re placing huge wagers. If you’re only laying down $10 wagers, it’s not really worth your time.
Because arbitrage betting is so difficult to execute successfully (and profitably), it’s usually associated with sharp bettors. Most recreational bettors and aspiring sharps don’t have the time or resources to make arbitrage betting worthwhile.
But just because you lack the bankroll, time, or expertise of a sharp doesn’t mean you can’t spot and capitalize arbitrage opportunities. Finding great value on your lines is likely the best strategy for regular bettors to grow their bankroll, and having knowledge of arbitrage betting adds a valuable approach to anyone’s repertoire.
If you want to know more about the nuances of this classic sharp strategy, you can check out our comprehensive guide to arbitrage betting.
Will a Sportsbook Penalize Me for Engaging in Arbitrage?
Yes, more often than not. Sportsbooks consider betting arbitrage to be unfair. Simply put, sportsbooks believe anyone using their lines as a way to guarantee a profit is a cheater.
Even with the vigorish, sportsbooks’ margins are relatively thin. You might be asking yourself why a sportsbook would care about arbitrage betting. After all, isn’t it likely that bettors will spread their winning and losing arbitrage bets equally across different sportsbooks?
Theoretically, yes. In practice, however, this isn’t what usually happens.
Most of the time, bettors end up placing a disproportionate amount of bets that win at one sportsbook. Any bettor who wins over 50% of their bets cuts into a sportsbook’s profits. Of course, because the majority of arbitrage bettors place extra-large bets because the profitability is so low, sportsbooks remain extra vigilant.
For this reason, many sportsbooks cooperate with each other via shared security servers to weed out and identify arbitrage bettors. Just like casinos ban professional card counters from gambling, sportsbooks have the right to refuse service to anyone (so long that doesn’t violate the person’s constitutional rights).
Read Your Sportsbook Terms and Conditions Closely
By reading the fine print of sportsbooks’ terms and conditions, you’ll see that they actually expressly prohibit arbitrage betting. It shouldn’t come as a surprise when they act to limit or restrict bettors engaged in this practice.
You’ll notice that many sportsbooks state they are specifically intended for “recreational use,” or “recreational bettors.”
The majority of sportsbooks will have terms and conditions with similar rules and regulations, stating that their intention is to cater to “recreational” bettors only.
The last thing most sportsbooks want is to have a reputation for welcoming arbitrage betting unless they specifically accept arbitrage bettors (More on that later.).
How Often Do Sportsbooks Catch Arbitrage Bettors?
Getting a straight answer can be difficult. Sportsbooks don’t often readily reveal the particularities of their methods and business practices, but the evidence of sports betting sites taking action against arbitrage bettors is clear.
If you peruse the sports betting community, you’ll find examples of bettors complaining about being shut down by sportsbooks. Here’s one prominent case of bettors swapping arbitrage betting horror stories on Reddit.
We won’t overwhelm you with examples, but rest assured, sportsbooks almost always take action against arbitrage bettors.
There Are Rare Sportsbooks Who Encourage Arbitrage Betting
There are actually some sportsbooks that encourage arbitrage betting. This is because they have a different business model than the most online sportsbooks.
A sportsbook that welcomes high limit bettors is often—but not always—friendly to arbitrage bettors. These books operate a different business model, as they simply try to encourage the highest volume possible. Determining a bettor’s intent isn’t their focus.
These sportsbooks are often the ones with the most capital, and they can afford to lose a high amount of bets and still remain solvent. Their guiding philosophy is that, over time, high betting volume plus the juice bettors are charged will keep them profitable.
What Are the Actual Consequences of Getting Caught?
If you’re suspected of arbitrage betting, sportsbooks will just send you a message saying that they’ve detected unusual activity on your account. They will then say that you’ve violated the terms and conditions of the sportsbooks, as you are a “professional” and not a “recreational” bettor.
From there, there’s a good chance that your sportsbook void all of your currently existing bets. Any funds that are in your account (including your deposit) will be refunded.
While it may be possible to restart your account in the future, suspected arbitrage bettors will likely have their limits drastically reduced once they’re reinstated.
Tips and Tricks Bettors Use to Avoid Getting Their Accounts Locked
Thankfully, there are some ways for bettors to avoid detection if they decide to try their hand at some arbitrage betting. Of course, there’s no foolproof method to avoid getting found out (and sportsbooks are fairly adept at identifying arbitrage bettors), but the following tips can greatly improve a bettor’s chances of avoiding account restriction.
1. Using a Virtual Private Network (VPN)
A VPN acts to let users send and receive data anonymously over the internet, as it encrypts your online traffic. VPNs accomplish this by randomizing IP addresses within a more extensive network.
Much like a firewall protects the data that lives on your computer, a VPN anonymizes the information you transmit over the internet.
Many bettors are known to use NordVPN.
2. Sometimes, It Pays Off to Round Up or Down on Bets
If you’ve played around with some of the arbitrage calculators we recommended, you’ll notice that the mathematics often dictate uneven and highly specific wager amounts.
In an arbitrage bet, a calculator might dictate that you place one bet for $100, and the other bet for a figure like $102.57.
Sportsbooks will notice this, especially if a bettor starts to win with regularity. Highly specific bet amounts are an easy way to tip off sportsbooks that bettors are engaging in arbitrage betting.
As such, every once in awhile, bettors round up to at least the dollar (eg. from $102.57 to $103). Even better, they could round from $102.57 to $105. The more bettors round, the lower the chance they’ll be flagged for unusual activity by your sportsbook.
3. A Longshot Bet That’s Likely to Lose
Sometimes, it helps to place a bet that doesn’t have a great chance of succeeding. This could be anything from a long-shot prop bet on an MLB game to a far-flung futures bet.
The bettors who use this strategy are usually heavily invested in arbitrage betting (we wouldn’t suggest anyone place reckless bets with the intention of losing under any other circumstances). Every bet they lose, no matter how small, affects the size of their bankroll.
However, if they stand to earn, say, over $100 on an arbitrage bet, it doesn’t hurt to place a $10 bet that is expected to lose. Sure, their profit would be $90 instead of $100, but bettors are less likely to get your account restricted or frozen. Having more opportunities to arbitrage bet again in the future is worth it.
Think about that lost $10 as a long-term opportunity cost.
4. Limit Deposits and Withdrawals as Much as Possible
Continually withdrawing and depositing to fund arbitrage opportunities will raise a lot of eyebrows in your sportsbooks’ financial department. If bettors can make a large deposit and use the funds to lay a series of wagers, it’s less probable they’ll catch on.
Similarly, if bettors withdraw sporadically (instead of after every win), sportsbooks will probably grant them a little more leeway.
There are real-life financial pressures outside of sports betting that everyone has to deal with, and it may not be possible to manage for everyone to manage their bankroll in this way. We recommend limiting deposits and withdraws as much as possible.
Quite simply, if bettors are arbitrage betting, anything that keeps them off a sportsbooks’ radar is good practice.
Get Started Today!
Betting arbitrage is just one of many strategies that we recommend to start growing your bankroll. If you’re looking for quick tips for your next sports bet, check out our article on ten simple strategies to improve your winning percentage.
Otherwise, check out the rest of our strategy guide for a more comprehensive look at the tools you can use to bet like a seasoned sharp.