Sports Betting Guide

Betting margin

Betting margin

Bookmaker’s margin – what is it?

There are some areas in bookmakers’ bets which are not used by the players, especially those who treat betting as a form of entertainment. Bookmaker’s margin is an important part of betting. You ask what is it? We deal with margin in everyday life when buying general goods. Plainly speaking a margin is the difference between the price (of purchase or goods) and the marketing price of this product. In betting the situation is similar. When we already know what it is, how do we calculate it?

It can be done very easily with the help of a formula:
M = ( 1/odds1 + 1/oddsX + 1/odds2) - 1

Clarification:
M – bookmaker’s margin;
odds1- hosts’ victory odds;
oddsX – draw odds;
odds2 – guests’ victory odds;
Example:
Barcelona – Real Madrid, 1 – 2.00, X – 3.00, 2 – 3.50
M = (1/2 + 1/3 + 1/3.5) - 1
M = (0.5 + 0.3333 + 0.2857) - 1
M = 1.119 - 1
M = 0.119 = 11,9% ≈ 12%
 

The margin for the given example with the odds 2.00, 3.00, 3.50 equals ≈12%.

What is the bookmaker’s margin for?

One of the most interesting question for us is how do bookmakers make money if everyone can foresee the outcome of the given match? This comes out of our mistaken simplified logic. We think that if a great group of people bet for the certain result and win then the bookmaker will suffer losses. That's a common misconception. Due to a margin the bookmaker earns on every bet. Impossible? Not really. if it was the other way around, bookmakers offering bets on the internet would have huge expenses and would go bankrupt very quickly. A bookmaker’s margin is not only a determinant of odds which are offered by online bookmakers but it is also the level of percentage profit for the given stake which irrespectively of the result comes to the bookmaker’s pocket. In short a bookmaker’s marge is a net profit of his from a money that we bet.

Regularities of a bookmaker’s margin

Imagine what an important job sports analysts called oddsmakers do. Attention should be paid to the fact that the margin doesn’t have a constant value for all the bets presented in the offer of sports betting of the given bookmaker. Remember that not all the players betting having similar opinion, so in reality it brings to the fact that the bookmaker will decrease the odds for the given outcome of events if more players bet for this outcome, doing so the bookmaker limits the risk of potential expenses and attracts players to betting at the opposite outcome of the match the odds for which has increased.

At what types of betting margin is high and at what it isn’t?

Let’s begin with the fact that part of bookmakers establish odds for matches for which there is a definite favourite with understated margin. This is a profitable and intentional act because usually players will bet on the favourite and therefore the bookmaker doesn’t need to adjust the odds thereby providing an impression of being more stable compared with the competitors. Let’s get down to the gist and try to answer the main questions.
 

The value of the bookmaker’s margin by large depends on a sporting discipline we wish to bet on and also on the type of the bet. It is considered that a high margin is established for bets with three variants (1X2) especially for team types of sports – football, hockey, handball. Such a tendency is the result of two simple reasons: firstly, these are the most popular kinds of sports among punters, secondly, these are the most foreseeable disciplines therefore chances for a win are not big since there are three possible results.

1X2 type  bets are the most popular among beginner punters however not many of them pay attention to what leads to lower chances for a win.

A low margin is established for such kinds of sports as basketball or hockey where only two outcomes of a game (1 or 2) are possible; especially in case of online bookmakers since traditional bookmakers sometimes put odds of a draw for basketball and rugby.
Options of bets characterised by low margins:

  • Handicap with all variants;
  • Linear events (under/over by the sum of points for both teams, quantity of games in a match/set, fouls);
  • Bets of H2H type one to one (1 or 2).

Attention:
Take into consideration that a low margin doesn’t mean high odds although it is such in many cases. The reason for a low margin can be high odds for a draw or a team is considered an underdog in a match.

 

Comments

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Best betting site (my personal experience):
• offering the best odds
• providing the highest limits
• operating a unique Winners Welcome policy

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Hi..
If you
PO – 100% * 9.090
The result is not PO – 90.90%
Is PO - 909.09%

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Vittorio: Thank you very much for your perceptiveness. We have made rounding mistake, corrections have been already made. The margin of given odds is equal to 12%. However in the section "How is a bookmaker’s margin established?" we did not use the same calculations as in section "Bookmaker’s margin – what is it?", but just assumed that margin would equal 11%. If you have any other concerns feel free to comment. Cheers :)

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Calculations here are totally wrong!

How can you even think that 1,78 / 2,69 / 3,17 means a bookmaker margin of 11% ?

Being in this business, I would NOT recommend to follow this guide.

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nice explanation of the margin, thanks

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