In gaming and betting, it is said that the house always wins. However, some bettors are constantly looking for loopholes to guarantee a profit no matter the outcome of their bets. They have even developed sophisticated software tools to help with a controversial tactic called arbitrage betting, which costs the industry millions each year.
In this blog we’ll look at how arb betting works, the arb bot tools being used to facilitate it, and how bookmakers are fighting back against this troublesome practice.
What is arbitrage betting?
Arbitrage betting, or arb betting, is a tactic used to guarantee a profit when making a series of opposing bets on the same event.
First, the arb bettor places a bet on an event with a bookmaker or betting site, before “laying” that bet on the same event using a betting exchange — in other words, betting on the opposite outcome. Essentially the arb bettor is selling the bet for more than they bought it for, so that no matter the outcome of the bet, they will turn a profit.
For example, the arb bettor will place a bet on a horse to win a race, whilst betting on an exchange that the horse will not win. If the odds are imbalanced, they will make a profit no matter whether the horse wins the race or not.
Why are bots essential for arb betting to be effective?
Bets that will yield a profit in this way exploit odds imbalances, which are often hard to come by and exist mainly in smaller or niche sports. Suitable events that generate opportunities for a profitable arbitrage bet are also time consuming to find, and do not yield a big profit individually.
Arb bettors can make the practice worthwhile by using tools, like arb bots, that automate the process of finding these opportunities, whilst calculating the profit they are guaranteed to return.
Netacea’s threat research team has been supporting our clients in the gaming and betting industry by researching some of the most popular arb betting automation tools for this purpose.
How do arb betting bots work?
Bot attacks are often made up of several distinct actions or stages (for more information see the BLADE™ — or Business Logic Attack Definition — framework). Our research revealed that, at their core, arb betting bots are facilitated by scraper bots.
These arb bots “scrape” (or extract) the content from multiple bookmaker websites and betting exchanges, specifically the up-to-the-minute odds for available bets, and feed this information into an algorithm to determine where arb bets can be made for guaranteed profit.
Some arb betting bots are even capable of automating the entire process of placing and laying the bets, using similar functionality for this stage as a retail or ticket scalper bot.
In one such arb betting tool, the user is presented with a list of arbitrage betting opportunities. Each is given a profitability rating based on the current odds on a bookmaker website versus the same lay bet on an exchange. This rating is based on the guaranteed payout for a bet of £100 — for example, if the rating is 120, the user is guaranteed a return of at least £120 minus their £100 stake, no matter the outcome.
The best profitability rating we saw whilst investigating one such tool was 134.44, promising a profit of £34.44 on a £100 bet. These tools are thus important for arb bettors to maximize their efficiency.
However, odds can change rapidly, and most opportunities are only available for a very short period, making arb betting a time-sensitive operation. As a result, the scraper bots feeding data into arb betting tools often attack their targets aggressively to ensure the information is always accurate.
How much are arb betting bots costing bookmakers?
Bookmakers want to stop arbitrage bettors because these people take advantage of loopholes to always make a profit. Arb bettors are not taking on the most profitable bets for the bookmakers, so serving them costs the bookmakers money in the long run.
Aggressive scraping activity by sports betting bots also adds unwanted costs to hosting infrastructures, as the bookmakers are forced to serve this traffic despite it not coming from legitimate customers. The cost of doing this can be significant, reaching millions of dollars per year, as scrapers account for most of the traffic making requests on a bookmaker’s site or API at peak times.
How can bookmakers prevent arb betting?
Although bookmakers routinely ban and block users who are gaining an unfair advantage or going against their terms of service, arb bettors are often hard to distinguish, and the task is manual and painstaking. Banning such users also does not stop the costly scraping activity carried out by automated arb betting bots.
Because arb betting opportunities are time-bound and will quickly become invalid as bookmakers shift the odds for each event, scrapers must aggressively collect data to be effective. By slowing down or blocking this scraping activity, arb betting tools become ineffective to their users, and the bookmaker saves substantial money by not serving these requests.
Netacea has worked extensively with one of the biggest bookmakers in the world to identify and block scraper bots linked to arb betting activity. Using patented technology powered by machine learning algorithms, Netacea Bot Management reduced overall website requests by 40%, decreased unwanted bets by 85% and saved £3 million in infrastructure costs for the client.
Get a free demo of Netacea Bot Management today.
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