So what exactly is arbitrage ?

Sports arbitraging is a particular case of arbitrage arising on betting markets due to either bookmakers' different opinions on event outcomes or plain errors. When conditions allow, by placing one bet per each outcome with different bookmakers, the bettor can make a profit regardless of the outcome.

What this means is you can bet for everything to happen at the same time,  and i you pick your odds correctly (from more than one bookie) you'll always be in plus, regardles of what the actual outcome is.

Here's an example:

This is an arbitrage on NBA basketball, where only 2 outcomes can occur.
 Either Team1 (Washington Wizards) or Team2 (Golden State Warriors) can win (there are no draws in basketball)
Following the suggested stake calculation here is what could happen to your money:

Team1 wins
Dashbet:            £37.32 * 2.8 = £104.50 (£67.18 profit)
PaddyPower:     -£62.68

Overall position: £67.18-£62.68 =  + £4.50

Team2 wins
Dashbet:            -£37.32
PaddyPower:     £62.68 * 1.667 = £104.49 (£41.81 profit)

Overall position: £41.81-£37.32 =  +£4.49


And that's it. No matter which team wins, the punter wins +£4.50 using £100 investment, which is 4.49% return.

Obviously stakes can be higher, and profits bigger, its all a subject to limitations of how much the particular bookmaker will take for a bet at certain odd.

Also those opportunities don't last forever, bookmakers adjust their odds, which is why you need a software to find those discrepencies as soon as possible.