This is a part of the betting field that is not familiar to new bettors. However, experienced bettors are aware of how a bookmaker’s margin work and how it can affect your profits in the long term. If you’re finding yourself in the first situation, this article will help you discover the secrets of a betting margin and how you can use it to your advantage.
As you might have guessed, bookmakers have to somehow make money. A margin set by a bookmaker is a form of commission that the house collects in order to generate profit and cover additional costs. The betting house's margin is incorporated into the odds offered for various sporting events.
If this aspect hasn’t go bothered you so far, now it might. How a bookmaker makes money needs to interest you, as it’s important for your profits in the long term.
As a first thing you need to know, this margin can be found with many other names. If you will find it confusing at first, don’t worry, as they are all the same thing. You can find it as a commission, vig, or cut, depending on the country you’re reading this from.
In order to understand this concept better, we should start with the fact that every single time, the bookmaker has to have its value worth more than yours. Therefore, some of them might take a lower margin, and some of them might take a higher margin. In both cases, they are on the winning side at the end of the day.
Their goal is to determine the odds in a way in which, no matter what outcome you’re going to choose, they are still going to make money. This is why you won’t find odds that are even, especially in football betting. Both sides of the market need to be profitable for the bookmaker.
The easiest way to look at how a bookmaker set its margin, and the most notorious way in which you’re going to find it explained online, is a fictive coin toss.
Let’s say that you are going to find a bookmaker that has even odds for a coin toss. Therefore, the chances for both sides of the coin will be 50%. In the event that you will place a 1$ bet, your winnings will be 2$, doubling your initial stake.
In a case like this, the bookmaker can’t make any profit. You doubled your initial stake on a 50% bet.
This is why bookmakers are usually constructing the odds in a way in which the combined chances are going to be more than 100%. Therefore, everything above the 100% mark will be considered the bookmaker’s margin.
Next, we are going to explain this process so you can paint a bigger image of how a bookmaker’s margin work.
After finding out what a bookmaker’s margin is, we need to explain how this process works. In order to make this as easy as possible, we are going to imagine a fictive match between Real Madrid and Barcelona.
Considering we just have two options, normally, the odds should be even, especially considering that these teams are both giants in the football world.
Despite this, all bookmakers won’t allow this to happen, as the combined chances will be only 100%, meaning the margin would be 0.
Instead, they are going to determine the odds so that they will have a certain margin.
Let’s imagine that the odds for this event are these:
Real Madrid to win 2.30
Draw 3.30
Barcelona to win 3.10
In order to calculate what the margin is, there is a certain formula that we have to use. Don’t worry, as the calculations are not tough, so the math shouldn’t be a problem.
All we have to do is divide 1 by every one of the odds presented by the bookmaker. Therefore, the results should be 0.430, 0.322, 0.303. The total would be 1055, or 105,5%. This means that the bookmaker’s margin will be 5,5%.
In the betting world, this would be considered a high margin. On the other hand, a low margin would be considered at 2% and under. Despite the fact that it might look like even the 5% margin is low and can’t generate profit, consider the number of bettors that are wagering daily.
One very important factor is that you don’t need to rely your bets solely on the margin. There can be cases where the margins are high, yet the bet is still profitable for you and the odds are great. In those cases, don’t hesitate to take your chances at a profitable bet for you.
In conclusion, the bookmaker’s margin exists. However, this doesn't mean that you can’t make profits or you can’t gain an edge above the bookmaker by researching the market and documenting yourself. Also, an odds comparison tool like the one on BetBrain will always be helpful for a bettor would looks to maximize his profits.
In order for you to have a final perspective about bookmaker’s margin we are going to list down some of the key points from this article that should interest you:
A bookmaker’s margin is the percentage that a bookmaker adds to the market in order to generate a profit, regardless of the outcome chosen by the bettor.
Certainly. With enough research and documentation, you will be able to use the bookmakers’ margins to your advantage.
No. All bookmakers have to set a margin in order to generate money. However, you may find bookmakers with lower margins that can help you secure bigger profits.
