It is not only arbitrage betting. The bookie mistakes sometimes, they can mix up the teams and one bookie will give you high odd on the strong team. And the other can give big enough odd at draw or win of the weak team. In such situations you can get 50-200% of your bet as a profit. And it is really possible. I saw such matches myself few times without any software. The problem is that i find them accidentally and it may be one match per month. And the software can analyze all matches and find such matches regularly.
Casinos are always trying to find those mistakes on the odds to avoid a scenario like that, so the window of opportunity that you have is not very wide to find it, however a computer software which could scrape all the odds from several different casinos can find this difference in seconds and notify you about it, and in fact there are many gamblers which coding skills which do this and are able to improve their odds of making money using this method.
Yes, they try. But, as i said, i find several such matches without any software. It means that the program can find more such mistakes and faster. It is possible to develop software that will bet such matches. I`m not a programmer but i`m sure that it is not a problem. And even 2-3 such matches per week can give us nice profit.