Betting Margins Explained

What Are Betting Margins?

As betting sites are always claiming to offer the highest odds, how do we know which bookie is telling the truth? Firstly, betting sites ensure they make money on a market by pricing it in a way that does not represent the true probability of the outcome. The margin is the difference between the odds on offer, and the true probability of the outcome occurring. Essentially, a betting margin is how much a bookmaker "charges" you to place a bet to ensure the operator always has an edge over the player regardless of the outcome.

As bookies price a market, they attempt to set odds that will attract betting on both sides of the market to balance liability on the possible outcomes. But, a balanced liability could mean that they will not make any money, so they add a margin to make sure there is a profit even if the liabilities are balanced.

For example, imagine a coin toss where both heads and tails represent a 50% chance each. This is known as a 100% market which would give no advantage to either the betting site or player. But, in reality, each betting site adds a certain margin on every market to ensure they have an edge over the players and profit no matter the outcome. There is also something similar in the casino world known as the "house edge", a percentage return to the player which is always in favour of the house. All online casinos have a house edge, but some are better/worse than others.

How to Calculate Betting Margins

As betting margins can vary vastly depending on the betting site, sport, event, and market, we recommend learning this simple calculation for working out the best betting margins available. The margins will not be the same across the sites, but it still gives us an idea of which betting sites offer the lowest betting margins, and which betting sites to avoid if they continually offer high margins. It's important to remember the lower the margins, the better value for punters, and vice versa.

Three-Way Market Betting Margin Calculation

To calculate the betting margin for a three-way market, like soccer:

(1/home odds) *100 + (1/draw odds) *100 + (1/away odd) *100 = Betting margin

As an example, let's use bet365's markets for the Dinamo Brest vs Dinamo Minsk match:

bet365: Dinamo Brest 2.15 (home) X 3.20 (draw) Dinamo Minsk 3.50 (away)

(1/2.15) *100 + (1/3.20) *100 + (1/3.50) *100 = 46.5 + 31.7 + 28.57 = 106.7% = 6.7% Betting Margin

bet365 offer a respectable 6.7% betting margins for this match, now let's compare the margin on Betway.

Betway: Dinamo Brest 2.10 (home) X 3.20 (draw) Dinamo Minsk 3.20 (away)

(1/2.10) *100 + (1/3.20) *100 + (1/3.20) *100 = 47.6 + 31.2 + 31.2 = 110% = 10% Betting Margin

Now, Betway is usually a lot lower than this in our tests, but this serves as a good example for how much they can differ across bookies, sports and events.

Two-Way Market Betting Margin Calculation

To calculate the margin for a two-way market, like tennis, use the same calculation, but exclude the draw market odds.

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

As an example, let's compare 22Bet and 888Sport's betting margins for a random match of tennis.

22Bet: Dustin Brown (1.67) vs Jan Choinski (2.18) | (1/1.67) *100 + (1/2.18) *100 = 59.8 + 45.8 = 105.6% = 5.6% Betting margin

888Sport: Dustin Brown (1.60) vs Jan Choinski (2.30) | (1/1.60) *100 + (1/2.30) *100 = 62.5 + 43.4 = 105.9% = 5.9% Betting margin

Both 888Sport and 22Bet perform well in our independent test, but this only serves as an example, with a much larger sample size needed to get a clearer picture.