Weighing both sides of "Is arbitrage betting allowed?" leads to one event. Hedging and arbitrage both mean betting on more than one side of the same event. A hedge does it after a first bet is already placed, to lock in part of a win or cut a loss. Arbitrage does it at the start, across different books whose prices disagree, so that every outcome returns a little more than the total stake. What they share is the arithmetic of splitting stakes between opposite results.
How much to hedge a bet depends on the aim. To guarantee the same return on both sides, divide the first ticket's potential return by the decimal odds of the opposite side, and stake that. To only cover the first stake, bet less. Should I hedge my bet is a question about risk: every hedge pays the book's margin a second time, so a hedge bet strategy used on every ticket slowly costs money.
Arbitrage betting meaning, in one line: backing every possible outcome of one event at different books, at prices high enough that the total return beats the total stake. How arbitrage betting works shows in the inverse sum: add up one divided by each best price, and a total below one means an opportunity exists. How to calculate arbitrage betting stakes: split the budget in proportion to those same inverse prices.
Is arbitrage betting allowed? Placing bets on both sides of an event is legal almost everywhere, and is hedge betting legal for the same reason. Books still dislike the practice openly, and does arbitrage betting get you banned is the practical question: accounts that only take arbitrage prices get limited or closed. Is arbitrage betting profitable, then? In small sums and only briefly, until those limits arrive and end the run.
Related questions
Why compare settlement rules between books?
Two books can settle the same event differently, for example on retirements or overtime, which can leave one side of an arbitrage unpaid.
Is arbitrage betting worth the time it takes?
Gaps are usually one or two percent and last minutes, so the return has to be weighed against the hours spent searching for them.
Do books limit accounts that take arbitrage prices?
Yes. Accounts that only take arbitrage prices tend to be limited or closed, which ends most runs while the sums are still small.
How are stakes split in an arbitrage bet?
The budget is divided in proportion to the inverse of each best price, so every possible outcome returns about the same total.
Does hedging every bet cost money?
Yes. Each hedge pays the book's margin a second time, so a habit of hedging every ticket slowly eats into the overall return.