Betting Margins Explained

by Moneybag
Updated: 25/01/2022 15:22

Bookmakers are constantly claiming 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?

To start, bookies offer odds that are lower than the actual probability of an event occurring. This is known as the betting margin. Essentially 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 known as a 100% market which gives no advantage to either the punter or the bookie. But, this is not the case. In reality, each betting site will add on a certain margin to ensure they always have the advantage over punters.

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.

Working out betting margins using the decimal odds format is by far 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 greatly.

It’s important to remember, the higher the margin, the lower the value for a punter. Margins are easily the best way to compare odds and find their true value.

Also, live betting margins tend to be much higher than in pre-match markets.

To calculate the margin for a two-way market, like basketball or tennis use this example:

(1/decimal odds) *100 + (1/decimal odds) *100 = Betting margin

Unibet tennis: Casper Ruud 2.48 vs David Ferrer 1.54

(1/2.48) *100 +  (1/1.54) *100 = 40.3 + 64.9 = 105.2 = 5.2% margin

William Hill tennis: Casper Ruud 2.50 vs David Ferrer 1.50

(1/2.50) *100 + (1/1.50) *100 = 40 + 66.6 = 106.6 = 6.6% margin.

With this simple calculation, you can see that Unibet offer 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.

To calculate margins for a 1×2 market like football use this example:

(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 give you an idea of how much bookies actually “charge” you to place a bet.

In our football margins test, there was a massive difference in margins between the best and worst.

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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.

Check out the Betfair betting exchange if you are searching for a fairer market. They will charge a 2-5% commission on winnings only, whereas, bookmakers add their margins regardless of whether you win or lose.

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Steven is the product manager on BettingLounge and is an experienced iGaming writer who has been working in the industry since 2018.


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