I will start by stating the fact that there is rarely anything that is risk free, but arbitrage betting comes real close to it, at least on paper. Arbitrage betting is based on the fact that now-a-days there are a variety of trust worthy online bookmakers that offer different odds on the same sporting event.This variantion on the same sporting event can be quite significant.This is because some bookmakers favor one outcome, while other bookmakers favor another outcome. Here is a fictional soccer match example that should help you understand better. Let's say that Barcelona will host Real Madrid for an "El Clasico" match. These are the best odds in the entire market:

Barcelona vs. Real Madrid home win -1.90 (Bookmaker 1) draw - 3.60 (Bookmaker 2) away win - 5.75 (Bookmaker 2)

The best odds on the market are from Bookmaker 1 (for home win) and Bookmaker 2 (for draw or away win).

Now let's divide 1 with each odd like this : 1/1.90 = 0.53 => a bet of 0.53$ returns 1$ 1/3.60 = 0.28 => a bet of 0.28$ returns 1$ 1/5.75 = 0.17 => a bet of 0.17$ returns 1$

If we add up all these numbers (0.53 + 0.28 + 0.17) we obtaine 0.98.

That means that for every 0.98 $ staked we get in return 1.00$. Let's invers it 1/0.98 = 1.02 which means that for every 1$ staked we get in return 1.02$. So, if we were to stake 1000$ we would et back 1020 $ for sure, which is a 20$ sure net profit. The downfall of arbitrage betting would be the fact that you have to spot these sporting events, search odds from diffent bookmakers and do a lot of research that takes a lot of time.As this might not be actually such a big problem as there are services that inform you about these arbitrage matches. There still is one major problem in arbitrage betting and that is that sometimes or better said most of the times, you are unable to place the desired bet with the sum of money you want and risking quite a lot.Most bookmaker have a restriction on the sum they allow you to bet.Other times odds might change.While you place your first two bets for home and draw, the odds for away might change, and so all your calculations are worth nothing.