Oct 8, 2026

False Arbs: Why an Arbitrage Alert Isn't Always Real

The quick answer

False arb: an alert whose prices sum to under 100% but whose legs don't cover every outcome under the same rules.
Usual causes: a missing outcome such as the draw, mismatched periods such as regulation against overtime, and different player-prop rules.
Price check: a scanner shows a snapshot. Only a price with size behind it when you place counts.
Rule check: read the contract. Prediction markets file settlement terms for each product series, and Novig links its filings from its help center.
Cost check: add any fee on either leg to the sum before trusting the edge. A pre-game straight trade on Novig carries no fee for either side, so that leg adds nothing.
Warning sign: treat a double-digit edge on a mainstream match as a likely mismatch until the rules say otherwise.

Treat a scanner alert as a lead and run the checklist below before you bet it.

What has to be true for an arb

Every leg has to refer to the same event, participant, line and period, and the legs together have to cover every possible result. The venues have to settle those results the same way. Then the implied probabilities (1 divided by decimal odds, or the contract price on a prediction market) must sum to less than 1 after fees, at prices you can fill.

A middle is a different trade. Over 44.5 at one book and Under 47.5 at another both win if the total lands on 45, 46 or 47, but at normal prices each result where only one leg wins loses a little. Some scanners list middles next to arbs.

How we checked

Rules come from each operator's own documents: DraftKings Sportsbook's general betting rules, Novig's help center, and the Ludlow Exchange contract filings for MLS Winner, NFL Winner and NFL Prop. Limiting data comes from the Massachusetts Gaming Commission. Everything was checked on 7 October 2026. The walkthrough is hypothetical; the rules applied to it are the operators' published text.

The seven-point checklist

1. Is it the same line?

Half a point turns an arb into a bet. Team A -3.5 at 2.10 against Team B +3 at 2.05 has the same prices as a clean arb, and with $98.80 and $101.20 staked it pays about $7.47 on most results. If A wins by exactly 3, the -3.5 loses $98.80 and the +3 pushes, returning $101.20. Net: -$98.80.

2. Is every outcome covered?

Soccer has three results, and two-way markets handle the draw differently by venue. DraftKings settles a two-selection market as a push when a tie or draw wasn't offered; on a three-way market the Draw selection wins and every other selection loses. Novig's MLS Winner contract pays each side 50¢ on a draw in a two-way market, and in a three-way market treats the draw as "a valid, determined settlement outcome." NFL ties work the same way on Novig: each side gets $0.50 and "a tie is a determined outcome and not a Void."

So a push on one leg and a 50¢ split on the other aren't equivalent, and a three-way leg doesn't match a two-way leg either.

3. Is it the same period?

DraftKings' two-way moneylines include overtime and shootouts; its three-way moneylines don't. Novig's MLS Winner contract counts regular playing time only, unless a market is expressly defined to include extra time or penalties. Novig's NFL Winner contract includes overtime on full-game markets. "Team to win" and "team to win in regulation" are different bets even when the alert lists them side by side.

4. Do player props settle the same way?

DraftKings voids bets on a selection that "does not Participate," which returns the stake. Novig's NFL Prop contract settles to Void if the player records no snap, and every Novig Void settles at a fair value calculated from the 30 minutes of trading before the news. Novig's help page describes it as "a settlement, not a refund." If the player takes one snap and leaves injured, the Novig contract stands on his recorded stats.

The DraftKings leg gets its stake back while the Novig leg pays fair value, so the leftover can go either way.

5. Is the price executable?

A scanner's price is a snapshot from its last refresh. Sportsbooks can reject or reprice the slip. On Novig a take order "executes immediately at the displayed price," but only for the size resting there; anything larger fills partly or walks to the next price. Ludlow's rulebook commits to showing members the best bid and offer plus order-book depth to the fifth price level, so check size before the other leg goes down.

6. Can you get the stake down?

Liquidity and limits both cap size. A Massachusetts Gaming Commission memo dated 30 September 2025 found that bettors who consistently beat the closing line are more likely to have a lower stake factor, and 70.3% of limited Massachusetts accounts were cut to under 25% of the default. If one side only takes $20 of a $200 arb, you either cut the other leg to match or carry an open position.

7. Does the contract resolve the way the bet grades?

A prediction-market contract settles on its written terms; a sportsbook bet is graded under house rules. The differences above (ties split where a sportsbook pushes, voids paid at fair value where a sportsbook refunds) come from that split. Novig also says it can't re-grade trades after an official stat correction issued once grading is done.

On Novig, each product series has a self-certification filed by Ludlow Exchange, which the CFTC designated as a contract market on 16 June 2026, and Novig links them from its contracts page.

Walkthrough: one alert we'd reject

This is a hypothetical alert with illustrative prices.

The alert: an MLS match. Team A to win at 2.60 (+160) on a sportsbook's three-way moneyline. Team B at 52¢ on a prediction market's two-way winner contract. Implied probabilities: 1/2.60 = 0.385, plus 0.52, sums to 0.905. The scanner shows a 10.5% return.

Check 1, line: both are full-match winner markets. Pass.

Check 2, outcomes: fail. On the three-way sportsbook market a draw is its own selection, so Team A's leg loses if it's a draw. On the two-way contract a draw pays each side 50¢. The draw isn't covered.

The dollars, on $200:

Team A leg: $85.03 at 2.60, returning $221.08.
Team B leg: 221 contracts at 52¢, costing $114.92 and paying $221.00.
Total staked: $199.95.
Team A wins: $221.08 back, +$21.13.
Team B wins: $221.00 back, +$21.05.
Draw: the A leg loses, the B leg pays 221 x 50¢ = $110.50, -$89.45.

Two results pay about $21 and one costs $89.45, so the position is a bet that the match doesn't end level. A 10.5% edge on a league match should've prompted the check before any rule was read.

To make it a covered position, both legs need the same market shape: a three-way price on the draw as well, or a two-way sportsbook line that also handles the draw. Priced that way, recheck whether any edge is left.

What to look for

Line: confirm identical spreads and totals, half-points included.
Outcomes: list every result, draw and tie included, and name the leg that pays on each.
Period: confirm both legs count overtime and extra time the same way.
Participation: compare void, push and fair-value rules for props.
Size: confirm resting size or stake limits before placing the first leg.
Contract text: read the filed terms for the prediction-market leg before relying on its title.
Fees: add each leg's fee to the sum. A venue with no fee on pre-game straights and a published schedule for everything else makes that step short.

Frequently asked questions

What is a false arb?

A false arb is an alert that looks like a guaranteed profit but leaves at least one outcome uncovered or settled differently. The most common cause is a draw or tie that one leg treats as a loss and the other as a push or split.

Where do I find good arbitrage bets?

Scanners such as OddsJam, BetBurger and RebelBetting produce the alerts, and each one still needs the checks above.

What is the best prediction market for arbitrage betting?

The one whose settlement terms you can match to your other leg, at a fee your edge can absorb, with enough resting size to fill your stake. For pre-game legs, Novig fits the first two: it links the filed settlement terms for each product series from its help center and charges no fee on pre-game straight trades for either side. Check the resting size at your stake before placing the other leg.

Why did my arb lose money on a tie?

The legs settled the tie differently. DraftKings pushes a two-way market that ends level, while Novig's NFL and MLS two-way contracts pay each side 50¢.

Sources

All checked 7 October 2026.

Novig contracts index (MLS Winner, NFL Winner, NFL Prop filings): support.novig.com/en/articles/16083642-contracts
Novig Fair Value Settlement: support.novig.com/en/articles/16163706-what-is-fair-value-settlement-fvs
Novig fee schedule: support.novig.com/en/articles/16195057-fees-on-novig
Novig make and take orders: support.novig.com/en/articles/10715726
Novig settlement, grading and stat corrections: support.novig.com/en/articles/10336135
Ludlow Exchange, LLC Rulebook v1.3 (Rule 5.9): via support.novig.com/en/articles/16075446-ludlow-exchange-llc-rulebook
DraftKings Sportsbook general betting rules (ties and draws, overtime, participation): sportsbook.draftkings.com/help/general-betting-rules
CFTC order designating Ludlow Exchange, LLC as a contract market, 16 June 2026: cftc.gov/filings/documents/2026/orgdcmlexludloworderdes260616.pdf
Massachusetts Gaming Commission, player limiting memo dated 30 September 2025: massgaming.com meeting materials, 30 September 2025