Betting Margins Explained
Learning how to calculate betting margins is a crucial skill for every punter. Once you master this simple calculation, you can easily find the best odds in every market.
What Are Betting Margins?
Bookmakers constantly claim to have the highest odds available, but with so many claiming to have the best odds, how do we know who’s telling the truth? Easy. On BettingLounge, you can compare betting odds across 10+ UK bookmakers. These odds are updated in real-time, so you know who has the best odds.
To start, UK betting sites offer odds lower than the actual probability of an event occurring. This is known as the betting margin. Essentially, it is the added price a betting site “charges” you to place the bet, ensuring a profit regardless of the outcome.
As an example, imagine betting margins as a coin toss. In this example, both heads and tails represent a 50% chance each. This is a 100% market that gives no advantage to the punter or bookie. But this is not the case. In reality, each betting site will add a margin to ensure they always have the advantage over punters.
Working out betting margins using the decimal odds format is the easiest way. If you struggle with decimal odds, check out our betting odds guide.
How to Calculate the Betting Margins
There is a simple equation we use to calculate the betting margins. You can use this calculation across all the sports and markets, as they tend to differ significantly.
It's important to remember the higher the margin, the lower the value for a punter. Margins are the best way to compare odds and find their actual value. Also, live betting margins are much higher than in pre-match markets.
Two-Way Market Margin
To calculate the margin for a two-way market, like basketball or tennis, use this formula: (1/decimal odds) *100 + (1/decimal odds) *100 = Betting margin
- Unibet tennis: Carlos Alcaraz 2.48 vs. Jannik Sinner 1.54
- (1/2.48) *100 + (1/1.54) *100 = 40.3 + 64.9 = 105.2 = 5.2% margin
- William Hill tennis: Carlos Alcaraz 2.50 vs. Jannik Sinner 1.50
- (1/2.50) *100 + (1/1.50) *100 = 40 + 66.6 = 106.6 = 6.6% margin.
This simple calculation shows that Unibet offers a 1.4% better margin than William Hill for this tennis event. This is important for value over the long run. Find the best odds with the lowest margin to increase your potential profit.
Three-Way Market Margin
To calculate margins for a 1X2 market, like football, use this formula: (1/home odds) *100 + (1/draw odds) *100 + (1/away odd) *100 = Betting margin
- Unibet football: Wolfsburg 1.75 (home) X 3.70 (draw) Norwich City 3.95 (away)
- (1/1.75) *100 + (1/3.70) *100 + (1/3.95) *100 = 57.1 + 27 + 25.3 = 109.4 = 9.4% Margin
- William Hill football: Wolfsburg 1.70 (home) X 4.0 (draw) Norwich City 4.0 (away)
- (1/1.70) *100 + (1/4.0) *100 + (1/4.0) *100 = 58.8 + 25 + 25 = 108.8 = 8.8% Margin
Now you can see William Hill is slightly better, with a 1.6% margin less than Unibet. These are only meant as examples to show how much bookies actually “charge” you to place a bet.
Betting Margins Conclusion
Now you know how to calculate betting margins for two way and three-way markets, you can now easily identify the best odds and lowest betting margins across bookmakers.
Although betting margins are ever-changing, you can still use them to get an idea of the best bookies to use if you want the most value for your money.
Steven is an experienced iGaming content writer who has been working in the industry since 2018. He is passionate about sports betting and enjoys writing about all aspects of the industry, including bookmaker reviews, betting tips and strategies, and news and analysis. If you have any questions about online gambling in the UK, please don't hesitate to contact him.