A sports arbitrage situation occurs when bookmakers' prices differ enough that we can back all possible outcomes of an event and guarantee a risk-free profit no matter what the outcome.
Sports arbitrage betting opportunities are often referred to as an "arb", "surebet", "underround" or "overbroke".
Yes they do!
Bookmakers don't create arbitrage opportunities with their own prices. If this does ever happen it's because of a mistake. You can't go to one bookmaker and bet on all outcomes without losing money.
You must use at least two different bookmakers. Betting on all outcomes at the same bookmaker won't work. You have to find at least two bookmakers whose prices differ and are high enough on opposing outcomes so that an arb is created.
This was previously quite a challenge, in the days when betting shops and telephone betting were the only options. But with the number of bookmakers offering online betting growing all the time, we now have vastly more odds to compare than before.
Imagine a fictional tennis match. "Bookmaker A" gives Andy Murray odds of 2.00 (1/1 in fractional odds format) and Roger Federer odds of 1.91 (10/11 in fractional). You couldn't make a profit by betting on both players at "Bookmaker A".
Let's say you then visit "Bookmaker B" and they're offering Andy Murray odds of 2.40 (7/5 in fractional) and Roger Federer odds of 1.66 (4/6 in fractional) . Again you couldn't bet on both players at "Bookmaker B" and make a profit.
However on a total investment of £100, if you placed £42 on Andy Murray at "Bookmaker B" at odds of 2.40 (7/5 in fractional) and also £58 on Roger Federer at "Bookmaker A" at odds of 1.91 (10/11 in fractional) you would be guaranteed a profit of over 6% of your total stake no matter which player won.
Learn more with our in-depth sports arbitrage example.