Bookmaker margin explained

A bookmaker does not want to bet on a particular result; it wants to earn on every match. It does this through the margin, also called the overround or the bookmaker's edge. It offers slightly lower odds on each outcome than would be fair. If the money on both sides balances out, it keeps the difference.

How to calculate the margin

Add up the reciprocals of all the odds in a market. For a fair bet the result would be exactly 1, i.e. 100 per cent. Anything above that is the mark-up.

For a two-way bet at 1.90 and 1.90: 1/1.90 + 1/1.90 = 1.0526. The overround is 5.3 per cent. The actual margin, i.e. the share of stakes the bookmaker keeps on average, is 1 − 1/1.0526 = 5.0 per cent. Both figures are loosely called "margin"; the only thing that matters is using the same one when comparing.

Typical sizes

For top matches in the major leagues, the 1X2 margin is often between 3 and 6 per cent. In smaller leagues and for specials such as goalscorers, corners or half-time/full-time, 8 to 15 per cent or more is common. In-play bets also often have higher margins than pre-match bets. As a rough rule: the more outcomes a market has and the less money is traded in it, the bigger the mark-up.

Why the margin grows in accumulators

In an accumulator the odds are multiplied – and so are the margins. Three selections with a 5 per cent margin each do not add up to 5 but to around 14 per cent: 0.95 × 0.95 × 0.95 = 0.857. With five selections it is already over 22 per cent. That is the main reason why accumulators are expensive in the long run.

What this means for you

The margin is the price you pay for every bet. You cannot avoid it, but you can reduce it: compare odds across several bookmakers, prefer low-margin markets and use accumulators sparingly. Only those who find odds above the fair probability – by more than the margin – end up in profit over time.