michaelschecht Arbitrage Scanner — Cross-Market Profit Opportunities
Identify, calculate, and evaluate arbitrage opportunities where odds discrepancies across platforms guarantee profit regardless of outcome.
When to Use This Skill
USE when:
- Comparing odds across multiple sportsbooks / prediction markets
- Calculating whether an arbitrage exists and its profit margin
- Evaluating middle bet opportunities
- Building a systematic line-shopping workflow
- Checking if a position can be hedged for guaranteed profit
DON'T USE when:
- Learning bet types → use
/sports-betting - Building predictive models → use
/odds-modeling - Sizing value bets (not arbs) → use
market-mechanics-betting
What Is Arbitrage?
ARBITRAGE: When odds across different platforms imply probabilities
that sum to LESS than 100%, guaranteeing profit regardless of outcome.
Example — Two-outcome event:
Sportsbook A: Team X at +150 (implied 40.0%)
Sportsbook B: Team Y at +130 (implied 43.5%)
Total implied: 40.0% + 43.5% = 83.5% ← UNDER 100% = ARB EXISTS
Arb margin: 100% - 83.5% = 16.5% guaranteed profit
Typical reality:
Most arbs are 1-5% margin (not 16.5%)
After vig removal, many apparent arbs vanish
Execution risk (odds change, limits, account restrictions)
Step 1: Arb Detection
Two-Outcome Arb Formula
Given:
Odds A (decimal) = best odds on Outcome 1 (from any book)
Odds B (decimal) = best odds on Outcome 2 (from any book)
Arb exists if: (1/Odds_A) + (1/Odds_B) < 1
Arb percentage = (1 - ((1/Odds_A) + (1/Odds_B))) × 100
Example:
Best Outcome 1: 2.50 (decimal) at BookA
Best Outcome 2: 1.80 (decimal) at BookB
Check: (1/2.50) + (1/1.80) = 0.400 + 0.556 = 0.956
0.956 < 1.0 → ARB EXISTS
Arb %: (1 - 0.956) × 100 = 4.4% guaranteed profit
Three-Outcome Arb (Soccer, etc.)
Odds A = best Home win odds (any book)
Odds B = best Draw odds (any book)
Odds C = best Away win odds (any book)
Arb exists if: (1/A) + (1/B) + (1/C) < 1
Example:
Home: 3.20 (BookA) | Draw: 3.60 (BookB) | Away: 2.40 (BookC)
Check: 0.3125 + 0.2778 + 0.4167 = 1.007
1.007 > 1.0 → NO ARB (but close — monitor for movement)
Stake Calculation
def calculate_arb_stakes(total_stake, odds_a, odds_b):
"""Calculate how much to bet on each outcome for equal profit"""
inv_a = 1 / odds_a
inv_b = 1 / odds_b
total_inv = inv_a + inv_b
if total_inv >= 1:
return None # No arb exists
stake_a = total_stake * (inv_a / total_inv)
stake_b = total_stake * (inv_b / total_inv)
profit_if_a = (stake_a * odds_a) - total_stake
profit_if_b = (stake_b * odds_b) - total_stake
return {
'stake_a': round(stake_a, 2),
'stake_b': round(stake_b, 2),
'profit_if_a': round(profit_if_a, 2),
'profit_if_b': round(profit_if_b, 2),
'arb_pct': round((1 - total_inv) * 100, 2),
'roi': round(min(profit_if_a, profit_if_b) / total_stake * 100, 2)
}
# Example
result = calculate_arb_stakes(1000, 2.50, 1.80)
# stake_a: $418.60, stake_b: $581.40
# profit_if_a: $46.51, profit_if_b: $46.51
# arb_pct: 4.40%, roi: 4.65%
Step 2: Types of Arbitrage
Pure Arbitrage (Sure Bets)
DEFINITION: Guaranteed profit with zero risk
MARGIN: Typically 1-4%
FREQUENCY: Rare on major markets, more common on:
- Cross-sport props
- Niche leagues (lower divisions, esports)
- Newly posted lines (before market corrects)
- Cross-platform (sportsbook vs. exchange)
EXECUTION WINDOW: Seconds to minutes
→ Requires fast multi-account execution
→ Software tools are almost mandatory for consistent arbing
Middle Bets
DEFINITION: Bet both sides at different spreads — win both if result
falls in the "middle" window. Guaranteed small loss if it doesn't.
Example:
BookA: Team X -3.5 at -110
BookB: Team X +4.5 at -110 (from opponent's perspective)
If Team X wins by exactly 4:
-3.5 bet wins (they won by more than 3.5) ✓
+4.5 bet wins (opponent lost by less than 4.5) ✓
→ WIN BOTH SIDES
If Team X wins by 5+: Win -3.5 bet, lose +4.5 bet → small loss
If Team X wins by 3 or less: Lose -3.5 bet, win +4.5 bet → small loss
COST: ~$9 in vig per $100 staked on each side
MIDDLE HITS: ~8-12% of the time on 1-point middles in NFL
EV: Positive if middle probability × payout > guaranteed vig cost
Closing Line Arbitrage
DEFINITION: Bet early at one book, then bet the other side at closing
when the line has moved in your favor.
Step 1: Bet Team A -3 (-110) early in the week
Step 2: Wait — line moves to Team A -5
Step 3: Bet Team B +5 (-110) at another book
Middle window: Team A wins by 4 → both bets win
Worst case: Small vig loss on one side
REQUIRES: Ability to identify line movement direction
→ See /market-sentiment for sharp money indicators
Cross-Market Arbitrage
SPORTSBOOK vs PREDICTION MARKET:
Sportsbook: Chiefs to win Super Bowl +500 (16.7% implied)
Prediction Market: Chiefs Super Bowl "No" at $0.78 (22% implied "Yes")
If the prediction market implies a higher probability of "Yes":
Bet "Yes" at the sportsbook (+500)
Bet "No" on the prediction market ($0.78)
→ Different margin structures create opportunities
→ Prediction markets often have lower vig than sportsbooks
SPORTSBOOK vs EXCHANGE:
Sportsbook: Team A at 2.10
Exchange: Lay Team A at 2.00 (bet against)
Back Team A at 2.10 (book)
Lay Team A at 2.00 (exchange)
→ Guaranteed profit from the odds gap
→ Exchange commission reduces margin (typically 2-5%)
Step 3: Line Shopping Workflow
Without Arbing — Pure Value Capture
Even if no arb exists, line shopping saves money:
SAME BET, DIFFERENT PRICES:
BookA: Team X -3 at -115
BookB: Team X -3 at -110 ← SAVE $5 per $100
BookC: Team X -3 at -105 ← SAVE $10 per $100
IMPACT OVER TIME:
1,000 bets at $100 each:
At -115: Need 53.5% win rate to break even
At -105: Need 51.2% win rate to break even
Difference: 2.3% fewer wins needed = ~23 fewer wins per 1,000 bets
→ LINE SHOPPING IS THE SINGLE EASIEST EDGE IN SPORTS BETTING
Multi-Book Strategy
TIER 1 — SHARP BOOKS (set the line, high limits):
Pinnacle, Circa, Bookmaker
→ Use for: reading the market, identifying true odds
→ Rarely limited but vig is low
TIER 2 — MAINSTREAM BOOKS (follow the line, medium limits):
DraftKings, FanDuel, BetMGM, Caesars
→ Use for: best promos, boosts, occasional soft lines
→ Will limit winning accounts over time
TIER 3 — SOFT BOOKS (slow to adjust, low limits):
Smaller regional books, offshore books
→ Use for: arb opportunities, stale lines
→ Limit quickly, but softest odds
STRATEGY: Track lines at Tier 1, bet at Tier 2/3 when discrepancy exists
Step 4: Risk & Limitations
Why Arbs Fail
| Risk | Description | Mitigation |
|---|---|---|
| Odds change | One side moves before you place the second bet | Bet simultaneously; don't arb margins <1.5% |
| Account limits | Sportsbooks limit or ban arb bettors | Round bet amounts, vary patterns, mix in recreational bets |
| Max bet limits | Can't place full arb stake at one book | Check max before committing to the other side |
| Voided bets | Book cancels one side (palpable error rule) | Never arb obviously wrong lines (likely to be voided) |
| Settlement differences | Books settle the same event differently (OT rules, etc.) | Verify settlement rules match before arbing |
| Correlation | Two "independent" outcomes are actually correlated | Verify true independence of arb legs |
| Capital lock | Money tied up in futures arbs for months | Accounts for opportunity cost in ROI calculation |
Account Longevity Tips
STAY UNDER THE RADAR:
✓ Round bets to natural amounts ($50, $100 — not $47.83)
✓ Mix arb bets with recreational bets
✓ Don't arb every market — be selective
✓ Deposit and withdraw at normal intervals
✓ Take promotions / boosts (looks recreational)
✗ Don't bet exclusively on obscure markets
✗ Don't max-bet every arb at the exact limit
✗ Don't withdraw immediately after every win
REALITY: On soft books, profitable accounts get limited eventually
→ Diversify across many books
→ Focus on exchanges (Betfair, Smarkets) for unlimited arbing
Step 5: Arb Tracking Spreadsheet
| Date | Event | Book A | Odds A | Stake A | Book B | Odds B | Stake B | Total Stake | Arb % | Result | Profit |
|------|-------|--------|--------|---------|--------|--------|---------|-------------|-------|--------|--------|
| 3/30 | NYK vs LAL | DK | +145 | $420 | FD | -135 | $580 | $1000 | 2.1% | NYK W | $21.00 |
MONTHLY SUMMARY:
Total arbs placed: [count]
Total capital deployed: [sum of stakes]
Total profit: [sum of profits]
Average arb margin: [avg %]
Failed arbs (odds moved): [count]
Capital utilization rate: [active capital / total bankroll]
Output
Save arb analysis to artifacts/prediction-markets/arb-[event/date].md
Guidelines
- Line shopping is mandatory even if you never arb — always get the best price
- Arbs under 1.5% aren't worth the execution risk for manual bettors
- The best arb is the one where you also have a value opinion on one side
- Prediction markets (Kalshi, Polymarket) vs. sportsbooks are an underexplored arb surface
- Soft books will limit you — budget for account attrition as a cost of doing business
- Use
/sports-bettingto understand the markets you're arbing - Use
market-mechanics-bettingfor optimal stake calculation - Use
/market-sentimentto predict which side of an arb will move (bet the moving side last)