Is Arbitrage Worthwhile Pursuing? Is Arbitrage Betting Legal?

Arbitrage Betting is ‘Sure Betting’

In the world of sports betting the art of arbitrage involves wagering on both or all sides of an event with the right combination of odds and stakes in place to make a profit whatever the outcome of that event.

The principle of arbitrage is ‘sure betting‘, supposedly with minimum risk (for the seasoned arbitrageur) and long-term, guaranteed profits.

Surely this is the closest you can come to attaining the “Holy Grail” in betting? Or maybe not?

Let’s examine why the reality rarely matches the myth.

If It’s So Good, Why Isn’t Everyone Doing It?

Despite the apparent rewards on offer, the number of professional sports arbitrageurs worldwide is estimated to be in the low tens of thousands — and likely not more. For context, Deutsche Börse AG, which operates the Frankfurt Stock Exchange, employs over 13,500 staff.[1]

But — you may say — RebelBetting? One of the largest providers of automated arbitrage services that claims hundreds of thousands of sign-ups.

Hey! Please think!!!

Most users likely never move beyond trial use, and probably only a tiny fraction operate at the professional level required to sustain long-term profits. It’s marketing talk you’re reading there, not a real report. And notice: RebelBetting holds back its actual user numbers.

Without knowing how many users were involved, we can’t tell whether this represents 100 professionals earning €2,870 each, or 3,000 hobbyists making just €95. That lack of detail makes the claim informative at best, but far from conclusive as evidence of sustainable professional income.

But one thing you can take for granted from these reasoning is that the number of professional arbers is in the low tens of thousands.[2]

Why may that be?

So, why such a relatively small group of customers taking advantage of the so-called ‘guaranteed’ gains averaging between 1.5% and 3.5% per bet (a typical ‘arb‘ provides around 2.5%), with perhaps 15-25% potential profit on the capital employed each month? That’s a far higher reward than any bank, building society, or share dividend offers!

Is Arbitrage legal?

There is no question that arbitrage is legal because the arber is simply exploiting price differences in the market, effectively buying and selling (bets) as any trader does. There is nothing illegal about this.

However, even when arbitrage betting is legal, since 2020 many countries (especially in the UK and EU) have introduced stricter regulations on online betting platforms – making it now even more difficult for arbers:

• KYC (Know Your Customer) – mandatory identity checks and source-of-funds documentation
• AML (Anti-Money Laundering) – stronger scrutiny of deposit/withdrawal behaviour
• Geo-blocking – limiting access based on user location (VPN use often violates terms)
• Betting limits – faster stake restrictions for accounts flagged as “professional” or “unprofitable”

Even if these regulations don’t make arbitrage illegal, they’ve made it significantly harder to sustain over time without being detected, blocked, or penalised.

Of course, it should be understandable that bookmakers are not fond of arbers — as arbers do not care if they win or lose, do not take any accumulators, and are not available for any of the marketing offers bookmakers use to attract losing customers. And as every company has the right (even arbitrarily) to decide who their customers should be, many bookmakers therefore prohibit arbers from their books. As soon as suspicion is aroused, accounts are quickly limited or even closed.

High Capital Requirement and Personal Characteristics

Successful arbitrage betting ultimately guarantees small returns but the sacrifice is that the process requires large funds. The money is tied-up in the venture for a potentially long period of time.

Pursuing an average 2.5-3.0% profit per betting round and targeting a return of 15-25% of the capital employed per month, the ‘arber’ needs, for example, a starting bank of at least 25,000 € in order to make 5,000 € profit per month.

Wow! A lot of money required at the start to make it worthwhile, and entering the arbitrage arena on these terms will be impossible for many.

Of course, arbitrage betting is a pretty safe investment, but in addition to substantial funds it requires not only great expertise but also some strong personal characteristics to make it possible at all:

• Many time-consuming calculations must be performed. Ouch, lots of maths!
• Clear and complete records of every transaction must be kept. How boring!
• Discipline and consistency has to be maintained at all times. Far too unsocial!

And lastly, a really stable, reliable and fast internet connection is essential, without any limitations to any bookmaker or exchange worldwide.

However, the average punter is perhaps not such a ‘professional’ investor, but bets for fun and/or the excitement of watching an event knowing that money is riding on the outcome. Of course, he hopes to profit from the wager but his are gambles, not investments. Is that the reason why there are so few ‘arbers’ out there and active in the market?

Sports Arbitrage Betting – Cost and Effectiveness

Although arbitrage is legitimately described as “risk free”, it is still not absolutely free of risk as our article risks of arbitrage betting and solutions explains.

One ‘arb’ gone wrong can cost the profits of approx. 20 successful ‘arbs’. Therefore no more than 5% of the available capital should be used per arb. This means that of our total working capital of 25,000 €, approximately 1,000 will be employed per arb, earning between 20 and 35 € each time.

Do not underestimate the effort necessary to live from arbitrage betting!

To achieve a profit target of 5,000 € monthly, approx. 250 (!) successful arbitrage trades per month are needed and assuming 20 working days per month (with enough games to trade), around 12 trades per day are necessary, including recording, accounting and monitoring. Professional arbitraging is definitely a full-time occupation.

In addition to the time requirements, for anyone thinking of becoming a professional arbitrageur several other considerations need to be made:

So, arbitraging, it’s not just hard work — it’s isolating, repetitive, and high-pressure and, in addition, attaining significant, tax-free arbitrage profits usually takes several years of experience until a knowledge level is reached where a comfortable living can finally be made.

Here, we are talking about an annual income in the region of 50,000-70,000 €.

Whether this level of fortune is worth the effort and the sacrifices necessary, or if it represents success at all, is down to the individual to decide.

It is therefore a very personal decision if sports arbitrage betting is actually worthwhile pursuing…

Arbers may need to act below the radar of most bookmakers

There are very few bookmakers who openly welcome arbers as customers and Pinnacle Sports is one of the few we can name with any confidence.

Therefore, it may be necessary to act below the radar of most bookmakers and use a friend or family member as “a front”. In other words, registering with bookies using different names and/or different IP addresses. And while technically legal, using fronts or VPNs may violate terms and risk withheld balances.

There are probably many other ways to fool bookmakers regarding your true identity, but any such method is likely to increase your risks and costs.

The ultimate penalty is having an account closed by the bookmaker. This could be made worse if they decide to retain your account balance on the grounds that you have broken their rules and regulations, leaving you in a quandary of how to get it back. This in turn could result in several bookmakers black-listing you, making it difficult to re-enter the arbitrage arena online.

Conclusion

The market place for arbitrage transactions is comparatively small. There are hundreds, likely approaching 1,000, active online bookmakers worldwide—though only a few dozen are major players with significant market share. The vast majority operate on a much smaller scale, and most are hostile to arbitrage bettors. Stake limits, account closures, and geo-blocking are now routine responses to detected arbitrage activity.[3]

Arbitrage betting is a balancing act of pursuing a perfectly legal occupation but to be permanently treated as an ‘unwanted’ customer. Moreover, the potential income is perhaps limited to a maximum of 50,000-70,000 € per annum due to bookmaker stake limits, own capacity, betting bank size, time constrictions, etc.

Before you decide to give arbitrage a go please consider carefully whether it is in fact a good use of your time to learn and master. There are other things you can do to learn a new trade and make money in a profitable, but more socially acceptable way.

If you are curious about arbitrage betting then it may be worthwhile checking out the experiences of a professional trader: Alan Seymour’s Sports Arbitrage Review. Alan has been arbing since 2002 and his blog describes his experiences both honestly and openly. Really great advice on his site!

Sources & Reasoning:

[1]Deutsche Börse AG. Annual Report 2022, p. 52

[2]🔍 Assessing the Claim: “Low Tens of Thousands of Professional Arbers Worldwide”

[3]🔍 Reality Check

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