What is sports betting margin: how to calculate bookmaker commission, formula and examples
The bookmaker earns through the margin, and not through the loss of the players. The offices do not care what you bet on and how much you win. In this article, we will analyze what the bookmaker's margin is in sports betting, how it affects the profit and how to calculate it.
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What is sports betting margin
Bookmaker margin - commission on the betting market. Due to the margin, the bookmaker will always be in the black at the distance.
The margin is easy to understand when betting on equiprobable outcomes. The probability of falling heads and tails when flipping a perfectly symmetrical coin is 50%.
Convert odds to odds using the formula :
100 / P , where P is the percentage probability.
Find the probability as a percentage by the inverse formula:
100 / K, where K is the coefficient.
Without margin, the odds for falling heads or tails are 2.00: 100/50.
The bookmaker can give odds on heads or tails, for example, 1.90. In this case, the probability of heads or tails is 52.63%: 100 / 1.90.
The sum of the probabilities is 105.26%: 52.63% + 52.63%. This extra 5.26% is the bookmaker's margin.Read about the theory of probability in sports betting here:
Types of margin
Bookmakers are divided into three types according to the amount of margin:
- Fundamental: with a margin above 5%
- Average margin: 3-5%
- Low margin: up to 3%
Most of the leading bookmakers in Russia operate with an average margin of 3-5%.
The lower the interest in the event, the greater the margin.
For example, for a Champions League football match, the margin will be less than for a match in the third division of the Vietnamese table tennis championship.
How to calculate the bookmaker's margin
To calculate the margin as a percentage, use the formula:
(1 / K1 + 1 / K2 +… + 1 / Kn - 1) x 100 , where n is the number of elections in one market, and K1, K2,…, Kn are the coefficients for each choice.
For example, in the match “Manchester City” - “Real Madrid” the bookmaker gives odds of 1.63 for the home win, 4.50 for the draw and 5.25 for the away win.
We calculate the margin:
(1 / 1.63 + 1 / 4.50 + 1 / 5.25 - 1) x 100 = 2.62%.
Also, use the online calculator to calculate the margin.Read about the mathematics of soccer betting here:
Influence of bookmaker's margin on profit at a distance
ROI is the ratio of net profit to the amount of bets.
Calculate ROI as a percentage using the formula :
net profit / bet amount x 100
For example, you made 100 bets of 1000 rubles each on events with two possible outcomes. Depending on the margin and pass rate, the results might look like this:
|Bookmaker margin||Equiprobable coefficient||ROI at 60% traffic||ROI at 50% traffic||ROI at 40% traffic|
To be successful in sports betting, you must know how to calculate your margin. The higher the margin, the greater the bookmaker's profit in the distance. With equiprobable outcomes, you need more than 50% flotation to be profitable.
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