A bookmaker margin is the extra a bookmaker builds into its prices, so that the chances they imply add up to more than 100%. Add 1 / decimal odds across every outcome in a market: the total is the market percentage, and the amount above 100% is the margin. Two sides at an illustrative $1.90 add up to 105.3%, a margin of 5.3%.
The margin is what a bet costs you on average. If the true chance in that market is 50-50, each $1 staked returns 0.50 x 1.90 = 95 cents on average, whichever side you back, and the missing 5 cents is the bookmaker's. The margin sits on top of the basic price maths in how betting odds work: return, implied chance and fair price.
How to calculate a bookmaker margin
Two lines do it:
- market percentage = the sum of (1 / decimal odds) across every outcome, x 100
- margin = market percentage - 100%
Step by step:
- List every outcome in one bookmaker's market: both teams, the draw if one is offered, every runner still in a race.
- Divide 1 by each price.
- Add the results and multiply by 100.
- Take away 100.
Example: a line market with both sides at $1.90, illustrative prices rather than a real game. 1 / 1.90 = 0.5263 for each side, and 0.5263 + 0.5263 = 1.0526, so the market percentage is 105.26%, which rounds to 105.3%, and the margin is 5.3%. With no margin, the same line would be $2.00 a side.
The bookmaker margin calculator does the adding up for a market of up to 30 selections.
Write the date and time beside every total, and compare it only with the same market, every outcome included, at other bookmakers at about the same time, because prices move. A single bookmaker's market that adds up to less than 100% usually means an outcome is missing from the sum or a price was copied down wrongly.
What the margin costs you in dollars
The margin is easiest to judge as money. If it shortens every price by the same proportion, each $1 staked in the market returns the same amount on average, whichever outcome you back:
- average return per $1 = 100 / market percentage
- average cost per $1 = 1 - 100 / market percentage
At 105.26%, that is 100 / 105.26 = 95 cents back and 5 cents kept. Over $2,000 of bets on lines priced like that, the expected cost is about $100, although every single bet wins or loses in full.
So one margin produces two percentages. The 5.3% overround measures the prices against a 100% market; the 5.0% cost measures the same margin against the money staked, which is the bigger base. A bookmaker holding equal money on both sides keeps exactly that 5.0%. Whether it does depends on how the bets arrive, and how bookmakers work shows what a lopsided book does to the result.
Overround, vig, juice and hold: one idea, different words
Most of the words for a bookmaker margin describe the same gap between a bookmaker's prices and fair ones. What changes is the base a figure is measured against:
| Term | Where you hear it | What it measures | Two sides at $1.90 |
|---|---|---|---|
| Margin | Australia | Usually the overround; some writers quote the share kept, so check the base | 5.3% |
| Overround | Australia and the UK | Market percentage - 100% | 5.3% |
| Market percentage, book percentage | Racing | The total itself | 105.3% |
| Vig, vigorish, juice | The US | The bookmaker's cut, usually quoted as the share of stakes kept on a balanced book: 1 - 1 / market total | 5.0% |
| Hold | The US | The share of stakes a bookmaker keeps: priced into a market (theoretical hold, the same 1 - 1 / market total as the vig) or actually kept after paying winners over a period (actual hold) | 5.0% priced; the actual figure depends on results |
| Commission | Exchange | A charge on net winnings in a market, taken after the result, not built into the prices | None in the price |
| Commission (takeout) | Tote | A share of each pool taken out before the dividend is declared, so it sits inside the dividend | No fixed price to total |
So overround and vig mean the same thing, measured on two bases. Two US prices of -110 are 1 + 100 / 110 = $1.90909 each in decimal odds. They add up to 2 / 1.90909 = 1.04762, or 104.8%: a 4.8% overround, or a vig of 1 - 1 / 1.047619 = 0.04545, about 4.5% of stakes.
Actual hold is a result rather than a price, so a bookmaker's hold over a month can sit above or below the margins in its prices, depending on which bets won.
How a bookmaker builds the margin into its prices
Whether a bookmaker makes its own estimate of each outcome's chance or follows other markets, it then shortens the prices, and where the margin goes is a choice. Take a game it rates 60-40, so fair prices of $1.667 and $2.50, and two illustrative ways to build a book of about 106%:
| Version | Favourite | Outsider | Market | Return per $1 on the favourite | Return per $1 on the outsider |
|---|---|---|---|---|---|
| Fair | $1.667 | $2.50 | 100.0% | 100.0c | 100.0c |
| Margin spread evenly | $1.57 | $2.36 | 106.1% | 94.2c | 94.4c |
| Margin loaded on the outsider | $1.62 | $2.25 | 106.2% | 97.2c | 90.0c |
Working: spreading the margin evenly multiplies each fair chance by 1.06, giving 63.6% and 42.4%, so 1 / 0.636 = $1.57 and 1 / 0.424 = $2.36. On the last row, 0.60 x 1.62 = 0.972 and 0.40 x 2.25 = 0.900.
The two books carry almost the same margin, yet in the second one a backer of the outsider gives up 10 cents per dollar and a backer of the favourite only 2.8 cents. The market percentage cannot show that split.
Long shots returning less per dollar than favourites is called the favourite-longshot bias, and it is why the methods in how to remove the bookmaker margin disagree most on long prices. How bookmakers set odds covers where the starting estimate comes from.
Why margins differ by market type
Three things push a market's margin up: more outcomes to price, less money and information behind each price, and more risk that the people betting know more than the bookmaker. As patterns to check rather than fixed figures:
| Market | Outcomes | Why its margin tends to sit where it does |
|---|---|---|
| Head to head, line, total | Two, or three with a draw | Few prices, plenty of money and close comparison between bookmakers keep them tight |
| Race win market | Every runner in the field | Bookmakers tend to leave more margin in bigger fields, so the total tends to rise with the number of runners; market percentage covers race fields |
| Player props | Many per game | Thinner betting and less public information on each player, so a bookmaker prices in more protection |
| Futures | Many, settled weeks or months later | A long wait, and every possible winner needs a price |
| Multis and same game multis | One combined price | The margin compounds leg by leg, and a same game multi gets one price for the whole set of linked legs |
With illustrative prices, a player market at $1.85 a side adds up to 2 / 1.85 = 1.081, or 108.1%, against 105.3% for the $1.90 line. A multi multiplies whatever its legs carry. If each leg comes from a market like the $1.90 line and its true chance is 50%, each leg returns 95 cents per dollar on average, and the legs compound:
| Legs | Average return per $1 | The multi's market percentage |
|---|---|---|
| 1 | 95.00c | 105.26% |
| 2 | 90.25c | 110.80% |
| 3 | 85.74c | 116.64% |
| 4 | 81.45c | 122.77% |
| 5 | 77.38c | 129.24% |
Working for three legs: 0.95 x 0.95 x 0.95 = 0.857375, and 1 / 0.857375 = 1.1664. Multis vs singles sets a multi against the same legs bet as singles. To test any pattern in the first table, total a dated sample of each market type at the same bookmakers and at the same time before the start, then compare the averages.
Why a lower margin is not the same as better value
The margin describes a whole market, while a bet is one price on one selection, and its value is that price against the true chance. With illustrative prices for one game at two bookmakers:
| Team A | Team B | Market percentage | |
|---|---|---|---|
| Bookmaker A | $1.75 | $2.15 | 103.7% |
| Bookmaker B | $1.68 | $2.32 | 102.6% |
Bookmaker B runs the tighter market (1 / 1.68 + 1 / 2.32 = 1.026, against 1 / 1.75 + 1 / 2.15 = 1.037 at Bookmaker A). But if you want Team A, Bookmaker A pays 1.75 / 1.68 = 1.042, about 4.2% more for the same result.
The tighter market is still useful, because it is the better place to estimate a fair price. Scaling Bookmaker B's prices to 100% gives Team A about 58.0% (59.52% / 1.0263), a fair price of about $1.724. Against that estimate, Bookmaker A's $1.75 has an edge of 1.75 / 1.724 - 1 = 1.5%. Its $2.15 on Team B sits about 9.7% below a fair price of about $2.38 (2.32 x 1.0263 = $2.381), since 2.15 / 2.381 - 1 = -9.7%.
So estimate the fair price from the tightest market you can find, then take the best price available against it, wherever it sits. Which bookmaker has the best odds runs that comparison across bookmakers.
Risk: Betting involves risk. A price above a fair estimate is better only on average, the estimate itself can be wrong, and on these numbers Team A still loses about 42 times in 100. See responsible gambling for limits and support.
Totalling a market's margin from Terminal prices
Totalling one market at several bookmakers is quicker when the prices already sit in one place. B337's Terminal puts racing and sports prices from 40+ bookmakers in side-by-side columns, picks out the best available price on each runner or selection, and sets Betfair back and lay beside them. Prices are shown as at the time displayed, so compare totals read close together, and check that a column covers the whole market, because some bookmakers skip some races and games.
The Terminal gathers prices in repeated sweeps rather than one tick at a time, so a column can lag the bookmaker's own price: check it with the bookmaker itself before you bet. A free account opens a limited view of the Terminal with live odds. Betfair prices are not part of the free view.
B337 itself takes no bets, sets no prices and never holds your money: it is software, not a bookmaker. Bookmaker names are trade marks of their owners. B337 is not affiliated with them.
Risk: Betting involves risk. Paying less margin makes each bet cheaper on average, but it loses just as often as before, and a bookmaker can cap your stakes or void bets under its terms.