How To Calculate Arbitrage In Football And Other Markets

How To Calculate  Arbitrage In Football And Other Markets

We have only considered betting markets with just two outcomes, team A wins or team B wins. But what about a football 1X2 market or even a horse race featuring 12 runners? Well the principles remain the same.

#1 – Calculate the implied probabilities of all possible market outcomes

#2 – Calculate the sum of the probabilities of all possible market outcomes

#3 – Divide the implied probability of each individual outcome by the sum of all probabilities

Let’s say we have an upcoming Premier League match between Manchester City and Arsenal. We are looking here at the 1X2 betting market. We have three possible outcomes:

• Manchester City win, at odds of 2.80
• Drawn match, at odds of 3.60
• Arsenal win, at odds of 3.20

Let’s see if we have an arbitrage opportunity. As we did in our previous examples, we calculate the implied probability for each individual outcome.

• Manchester City at odds of 2.80

implied probability = 1 / 2.80

= 0.3571 = 35.71%

• Drawn match at odds of 3.60

implied probability = 1 / 3.60

= 0.2778 = 27.78%

• Arsenal win at odds of 3.20

implied probability = 1 / 3.20

= 0.3125 = 31.25%

We then add each probability to come up with our market total.

= 35.71% + 27.78% + 31.25%

= 94.74%

Great news! As the market total is below 100%, we have identified an opportunity to make a guaranteed profit. We now need to work out how much to stake on each outcome to guarantee the same profit no matter the outcome. Let’s say we want to stake a total of N5000.

• Manchester City at odds of 2.80

= 35.71% / 94.74%

= 37.693%

So we will stake 37.693% of N5000, a total of N1884.7 on Manchester City to win.

• Drawn match at odds of 3.60

= 27.78% / 94.74%

= 29.323%

So we will stake 29.323% of N5,000, a total of N1466.2 on the Drawn match.

• Arsenal at odds of 3.20

= 31.25% / 94.74%

= 32.984%

So we will stake 32.984% of N5000, a total of N1649.1 on Arsenal to win.

If we bet each of these amounts, we will be guaranteed a profit on the match of roughly N280 no matter what happens.

Problem With Arbitrage Betting

There is a diminutive size of typical returns. In almost every arbitrage betting opportunity you will earn a relatively small profit from each transaction, a return of more than 3% on your investment will be a rare event. So while this gain is almost certain, you have to consider the rare nature of Surebets. This means you need a lot of capital to invest in each opportunity, to justify even the high expenditure of time.