As someone with an interest in sports betting, you may have caught wind of discussions about something called arbitrage betting on Reddit, and may have seen YouTube videos come across your content feed, indicating that there is finally a way to beat the house at its own game.
But what exactly is arbitrage betting?
It is a gambling strategy that involves placing wagers on different possible outcomes (contrasting betting lines) of a sporting event with separate bookmakers to ensure a guaranteed profit. Essentially, a sports bettor not only hedges risk by making opposing wagers on an event, they position wagers so that they are guaranteed a profit no matter the outcome of the game.
Let’s look to a matchup between the Las Vegas Raiders vs Los Angeles Rams as an example. In this scenario, the Raiders moneyline is set at -300 at Sportsbook A, and the Rams moneyline is set at +330 at Sportsbook B. The bettor calculates what is required to attain the same payout value, beginning with the +330 moneyline (Rams) which requires a straightforward $100 bet to get a payout of $430. On the other side at Sportsbook B, it is calculated that to get the same payout of $430, a bet of $322.50 on the Raiders moneyline at -300 is required. No matter the outcome of the game (Raiders or Rams win) the payout is $430, while the total wager is $422.50, which nets the bettor $7.50. Not a huge amount, but when wagers are made using this strategy for all NFL matchups for the week, the number multiplies. And when spread out to include wagers on NCAAF, NBA, MLB, and other league matchups, the payouts grow exponentially.
| SPORTSBOOK | MONEYLINE ODDS | BET AMOUNT | PAYOUT |
| Sportsbook B | +330 (Rams) | $100 | $430 |
| Sportsbook A | -300 (Raiders) | $322.50 | $430 |
| Totals | $422.50 | $430 |
There are other betting types for which this strategy theoretically works, including OVER/UNDER wagers. However, the intent of this article is not to teach you how to participate in arbitrage betting, but to educate you on the innate risks and misconceptions about the math-based gambling strategy. As with all forms of gambling, there may be short term gains to be made, but in the long run the losses prevail, especially as it pertains to mental wellbeing. Let’s review.
Risks and Misconceptions Regarding Arbitrage Sports Betting that Vulnerable Americans Need to Know About
Slim Odds of Finding LEGAL Sportsbooks with Required Variances
The example laid out in the introduction makes arbitrage betting feel pretty enticing, doesn’t it? But instead of using a theoretical “Sportsbook A” and “Sportsbook B” let’s look to actual odds being offered today (June 26, 2025) by the two most popular sportsbooks in the United States, referencing the NFL Futures moneyline on the upcoming Dallas Cowboys vs Philadelphia Eagles matchup in Week 1 of the 2025-26 season. The goal is to attain a $500 payout.
| SPORTSBOOK | MONEYLINE ODDS | BET AMOUNT | PAYOUT |
| FanDuel | +280 (Cowboys) | $178.58 | $500 |
| DraftKings | -310 (Eagles) | $378.05 | $500 |
| Totals | $566.63 | $500 |
In this example, the total bet amount ($566.63) exceeds the $500 payout. The bettor lost $66.63. This result is proportionately the same for practically all wager amounts and for all NFL Week 1 matchups.
Why didn’t it work? Because regulated (legal) online sportsbooks in the United States maintain betting lines that may appear different, but they net relatively the same result. This hedges their risk against betting line variance exploitation.
Yes, if a bettor took the time to comb through each and every matchup on the sports betting calendar and ran the calculations on each, they may uncover a small percentage of scenarios for which the arbitrage betting strategy works. But the time and effort required would be so intense that only the likes of Laurence Kim Peek could make it work without there being some sort of a “hack”.
Proponents of arbitrage betting will state that artificial intelligence (AI) can help you identify where profitable odds discrepancies exist. In fact, an entire sub-industry has been built around this. Both developers and affiliate networks purport to have the best and latest arbitrage betting software, finder, and calculator on the market.
And it’s true, AI can absolute deliver the results to facilitate the strategy.
However, in nearly each and every instance, the online sportsbooks delivered (with odds offering the required variance) will be those from the unregulated offshore market. In other words; illegal online sportsbooks. This leads to the next risk.
Risk of Punitive Measures
In the section above, we showed that in order for the arbitrage betting strategy to potentially work in the United States, a bettor (yourself included) would have to look towards the illegal offshore market. And if you participate in betting with offshore sportsbooks, you place yourself at risk.
There are mental health risks (which we address in the final section) but we will first address the ones that resonate most with the average bettor who thinks they can make sports betting a side hustle through arbitrage betting. You see, governing bodies from your state and at the federal level are watching.
Gamblers have have been required to claim their winnings in the United States for over a century. Not doing so was a part of how the IRS was able to take down Al Capone. However, the average American gambler didn’t have much to worry about in this capacity, until 2018 when the federal ban on sports betting was removed by the US Supreme Court. Now, the IRS looks very closely at sports betting behavior being conducted by citizens. Sports bettors are required by tax law to claim all winnings made from sports betting. If you do, for arbitrage betting, you will therefore be admitting to using unregulated offshore operators. This comes with potential for prosecution as calls from regulated operators to shutdown the unregulated market are getting louder with each passing year. If the government can’t penalize offshore operators (who are located in Costa Rica, Curacao, Malta, etc.) their only recourse is to target unregulated market bettors on U.S. soil who are under federal and state jurisdiction. And if you don’t claim the winnings on your annual tax filing because you don’t want to divulge your offshore sources, you also face risk of IRS penalties and subsequent prosecution for hiding income.
It’s not worth the risk.
Opportunity Cost of Arbitrage Betting
Whether you are able to find requisite moneyline variances on the regulated market, or are comfortable participating in the illegal offshore market, the time required to make a short-term gains (more on longevity below) does not add up when considering other healthier avenues for earning income. This is where the opportunity cost of gambling cost comes into play.
Opportunity cost is an economic theory that addresses the potential benefits one misses out on by choosing one income-earning option over another, asking them to consider what could have been achieved or gained if a different choice had been made. In doing so, it also shows what can be lost. The known opportunity costs of gambling include the following:
- Lost opportunity to further education
- Lost opportunity to grow one’s career
- Lost opportunity to start a business one is passionate about
- Lost opportunity to focus on optimizing health and wellness (mental and physical)
- Lost opportunity to spend time with family and loved ones
View more on the opportunity cost of gambling.
Simply put, arbitrage betting (with or without software) consumes so much time and effort that it leaves little to no time for anything else in your life. And even if willing to forgo healthier opportunities for growth, the next section may be what puts the nail in the coffin of arbitrage betting aspirations.
Banned from Betting Platforms
As you may know, counting cards is technically not illegal in casinos. It is not considered cheating under state (i.e. Nevada) law because it does not involve altering the game’s mechanics or using external devices to gain an advantage. However, casinos that discover a gambler is counting cards have the right to ask the patron to leave and can (and generally will) ban them for life. This is directly analogous to arbitrage betting in sports.
Just as arbitrage bettors are leveraging AI to discover online sportsbooks offering odds variances to make a profit possible, operators are using algorithms and AI to catch players who they suspect are using their platforms for arbitrage betting. Further, in recognizing the rise of arbitrage betting, operators are coordinating to share player activity and information with one another to identify culprits. Their Terms & Conditions allow them to limit player bets to nullify the strategy or close an account, keep funds, and ban a player from their respective platforms for life. The more player monitoring technology grows, the less sustainable arbitrage betting strategies become. In fact, by the time you read this, it may be too late to make it out with any sort of lucrative score.
Attracts Thrill-Seeking Personalities (which is a problem)
The arbitrage betting risks addressed above provide a practical look at why it’s irrational to consider or continue the pathway. However, as America’s leading problem gambling support provider, we must address one risk that comes with the greatest consequence of all.
Arbitrage betting and all that comes with it attracts those with thrill-seeking personalities, perhaps even more so that traditional sports betting since U.S. based participants walk a fine line in terms of legality. If the thrill is a part of what attracts you to the strategy, we encourage you to assess where you stand with your mental health. Research confirms that people with thrill-seeking personalities are predisposed to developing problematic gambling behavior. Understanding this, you must be more mindful about your relationship with arbitrage betting. The excitement of running calculations and skirting gaming regulations, together with the potential for a payout, checks all of the boxes for a thrill-seeker, which may later manifest as habitual or compulsive participation. Compounding the concern, is that the unregulated operators needed to attain short-lived profit from the arbitrage strategy, do not abide by Responsible Gaming mandates. They offer players no mental health guardrails. View more on the mental health dangers associated with offshore sportsbooks.
Other Articles You May Be Interested In:
- Sports Betting Side Hustle is a Dangerous Myth
- Why is Sports Betting so Hard to Win in the Long Run?
Has sports betting in any one of its forms already taken a hold of your life? Get help today through Kindbridge Behavioral Health.
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