Sports Betting

Effective Ways to Protect Against Arbitrage Gambling

January 20, 2023
May 13, 2024
Table of Content

Arbitrage gambling reduces profit margins and causes financial losses to bookmakers. Fight arbing, decisively, with CAF to protect genuine users and the integrity of the online gambling environment

Arbitrage gambling, also called arbitrage betting or arbing, is a strategy where a player makes guaranteed profit by exploiting differences in odds across multiple bookmakers and placing bets on all possible outcomes of a sporting event. For instance, arbing in a tennis match would mean placing two bets, one on each player’s win.

Factors leading to the rise of arbitrage gambling

The global online gambling and betting industry is likely to register a whopping 190% increase in a decade rising to $184.28 billion by 2032 and this is fueling the growth of arbitrage gambling. Bettors are increasingly using arbitrage betting to maximize their profits, as arbing guarantees a win, regardless of the outcome of the game.

The proliferation of online betting platforms and mobile betting apps has increased accessibility for players to a wider range of betting markets and odds, facilitating arbitrage opportunities even for players with little or no technical expertise.

As sports betting markets go global, odds set by numerous global bookmakers translate into variations in pricing, which creates a number of opportunities for arbitrage. This is supplemented by the advancements in technology, such as automated betting software, bots, and odds comparison websites that allows bettors to quickly identify and capitalize on arbitrage opportunities. Growing globalization is also making information, about live scores, injury updates, or adjustments in odds, available in real-time, enabling bettors to make informed decisions and exploit discrepancies in odds across several bookmakers.

In jurisdictions where the sports betting market is improperly regulated or not regulated at all, the barriers for exploiting pricing differentials are lowered, contributing to the growth of arbitrage gambling.

Consequences of arbitrage gambling on businesses

Arbitrage gambling is not illegal in countries where gambling and betting are permitted. As a result, bettors do not risk facing legal action. However, businesses run the risk of reduced profit margins and financial losses.

Businesses may have to limit account or cancel bets to avoid arbitrage betting, which may lead to discontent among genuine players and affect the brand equity of their platforms. Arbitrage gambling can also lead bookmakers to engaging in fierce competition in order to adjust their odds.

Indicators of attempted arbitrage gambling

Security teams trying to fight arbitrage gambling can watch out for the following red flags:

  • Consistently High Betting Volumes: Accounts placing consistently large bets or with unusually high frequency across multiple markets.
  • Rapid Succession of Bets: A series of bets on the same event, market, or less popular sports, in quick succession, especially if the odds change swiftly.
  • Unusual Betting Patterns: Such as placing maximum bets on all possible outcomes of an event or unusual bet sizes.
  • Types of Bets: Certain types of bets such as where bettors wager only on profitable opportunities.
  • Account Activity Across Multiple Bookmakers: Accounts active and consistently exploiting differences in odds across several betting platforms simultaneously.
  • Consistent Profits: Accounts with a pattern of consistent profits over time, especially with profits achieved by exploiting small differences in odds.
  • Use of Automation: Use of bots or software to automate placing of bets and facilitating quick exploitation of odds discrepancies.
  • Frequent Withdrawals: Frequently withdrawing funds or transferring money between several betting accounts.

Steps to take on detecting arbitrage betting

To detect players engaging in arbitrage gambling and mitigate the impact of their activities, bookmakers can consider taking the following steps:

  • Set Limits on Bets: Impose limits on the maximum bet amount or restrict specific betting markets for accounts suspected of engaging in arbitrage betting. Ban the bettor trying to breach this limit.
  • Cancel the Bet: Void a user’s all current bets, if found engaging in arbitrage gambling.
  • Shut Down the Account: Close the accounts of bettors and either refund the amount in the account or leave them with nothing.
  • Adjust Odds: Adjust the odds to reduce the profitability of such bets.
  • Enhance Monitoring: Use smart monitoring systems to detect patterns indicative of arbitrage gambling and minimize losses with swift countermeasures.
  • Take Legal Action: Pursue legal action if bettors are found breaching the platform’s terms and conditions or engaging in fraudulent activities.

Techniques to prevent arbitrage gambling

To prevent arbitrage gambling, bookmakers and gambling platforms not only need to adopt robust policies and procedures, but also leverage technological solutions that enhance security posture and safeguard their operations and profitability. Some effective techniques to help prevent arbitrage gambling are:

  • Advanced Data Analysis: To analyze vast amounts of betting data in real-time, detect patterns indicative of arbitrage betting, and automatically flag suspicious activity for further investigation.
  • Odds Monitoring Software: Monitor odds across a range of bookmakers to identify potential arbitrage opportunities quickly and adjust their own odds or inform taking other preventive measures quickly.
  • Machine Learning and AI: Identify evolving patterns of arbitrage gambling more accurately using historical data, continuously improve detection capabilities, and adapt to new tactics used by arbers.
  • Pattern Recognition: Identify specific patterns associated with arbitrage gambling, such as placing simultaneous bets on multiple outcomes of the same event.
  • Behavioral Analysis: Detect suspicious betting behavior on the basis of factors such as betting frequency, bet sizes, and withdrawal patterns.
  • Automated Account Monitoring: Identify and flag accounts engaged in arbitrage gambling in real-time for further investigation.
  • Fraud Detection Tools: Identify and prevent fraudulent activities associated with arbitrage gambling, such as money laundering or account manipulation.
  • Livenes: Authenticate users and establish ownership of accounts to prevent multiple accounts fraud.
  • AML Screening: Verify users to ensure bettor is not involved in any financial crime or other illegal activities.
  • Terms and Conditions Enforcement: Prohibit arbitrage gambling and take appropriate action against errant accounts, such as suspending or closing accounts.
  • Regular Audits and Reviews: To identify attempted arbitrage gambling and take proactive prevention measures.
  • Collaboration: Work with peers and share information and security servers to identify arbers and collectively fight the problem.

Trust CAF to eliminate arbitrage gambling

CAF’s BetID solution is designed to accurately identify all users coming to a betting platform and fight fraud. We help betting platforms establish robust monitoring systems to detect and prevent suspicious betting activities associated with arbing. With its superior technology and market-leading solutions, CAF can help proactive detection of arbitrage gambling to help betting platforms mitigate risks and create a trustworthy digital betting environment that promotes responsible gambling.

To learn how CAF can safeguard your platform from arbitrage gambling, talk to an expert now.

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"Effective Ways to Protect Against Arbitrage Gambling"