What is Betting Margins and How to Calculate it?
Nowadays the sports betting industry is vast, growing every single day, and there are a lot of available sportsbooks that fight for the customers. There is is vast majority of esports betting websites out there and one of the most important things for you as a bettor to figure out is what betting margins are they offering you. Choosing the right bookmaker is essential because you will need to have respected and legally regulated bookmaker, that offer the fair game and fair odds to the players. how you should go about choosing the right esports betting site you can read about here. But lets get in to the real reason you entered this article. Betting Margins.
In this article you will learn about betting margins, how it works, how to understand it and how it impacts you. Here is what we cover, in case you want to jump over certain parts:
- What is betting margins?
- How betting marings affect your betting?
- How to calculate betting margins.
What is betting margins?
The sports betting industry is a very competitive sector where you have thousands of sport betting companies that offer customers their services. Many of those companies claim to have the best odds and the lowest margins, but almost none of them are completely truthful. In simple words, betting margins is the way bookmakers make a profit. They adjust the odds to attract bettors to place bets at their websites, but in the same time, they make those odds in the right proportion to secure the profit no matter what the outcome of the selected game will be. So the bookmaker margins is the percent what bookie will charge you to place a bet at their betting site.
The easiest way to understand betting margins is on the coin toss example.
When you flip the coin, there are two possible outcomes, heads or tail. So you have the 50% chance to make a correct decision. In sports betting terms, 50% outcome that something will happen is represented by 2.00 odds. So in the perfect situation, you will get 2.00 odds on heads and 2.00 odds on tails.
In sports betting terminology, this situation is called 100% market, because there is no advantage to either side. So in this situation, there is no margin at all. But in real sports betting scenario, you will rarely find this kind of situation, as every sportsbook have a betting margin. Plain and simple the goal of the bookmaker is to make a profit, and they make a profit from every single game by using a margin.
In balanced matches where there is no heavy favorite sportsbooks give to the bettor’s odds close to 2.00, but slightly lower. For example, instead of 2.00 odds on both sides, they will offer you 1.92 odds. In this case sportsbook margin is set at 4.17%, and that means that bookie will make a profit regardless of how the match ends.
Sportsbooks have another trick in their sleeve. They are always trying to balance the action on both sides of the bet. If they see a lot of bets on Team A, they will adjust the odds (or the line) in order to attract bettors to place their bets on Team B. The goal is to have similar amount of money placed on both outcomes, and when they manage to do that, they let margins work for them.
How Margins Affect Your Betting?
Answer on this question is rather straightforward. Sportsbooks with higher margin will affect your betting bank and your profit in the long run significantly. And that’s why it is important to choose the sportsbook with low margins.
We will explain this on coin toss example:
In the perfect situation where there is no betting margin, and you have 2.00 odds on a coin toss, you will need to predict correctly 51 times out of 100 to make a profit (51 x 2.00 = 102 units – 100 units staked).
But if the bookie offers you 1.85 odds (9.20 % margin), you will need to predict the correct outcome 55 times (55 x 1.83 = 100.65 units – 100 units staked)
On the other hand, sportsbook with low margins will give you odds around 1.94 (3% margin), and you will need to predict correctly the outcome “only” 52 times (52 x 1.94 = 100.85 units – 100 units staked).
On this simple example, you may see the true difference between average and excellent sportsbook. Just by picking the right sportsbook you will get an advantage and be able to make more profit in the long run.
How to calculate betting margins?
Now when we explained the importance of betting margin and good sportsbook, we will explain to you how to calculate betting margin in the 2-way betting market, as that market is used in E-sports betting.
To calculate the margin on the two-way betting market, you should use this mathematical equation:
(1 / odds on Team A to win) * 100 + (1 / odds on Team B to win) * 100 = bookmaker margin
When you learn how to calculate margins, you will see every day that different bookmakers have different margins and that is the place where you can exploit different odds. Best bookmakers have relatively low margins in the range from 2.5% to 5%, while some average and below average bookmakers have margins higher than 10%.
You should always choose the bookmakers that have low margins. That way you will get a decent long-term advantage over the bookmakers. Online bookmakers have lower margins, and local shops have higher margins, and that is why we recommend you to bet online and to look for the sportsbooks that offer the lowest possible betting margins.
That’s why it is extremely important to know how to calculate the margin and determine if the odds are worth your money and risk. Once when you learn how to calculate betting margins you will be able to spot so-called “value bets.” Value bet represents the situation where odds offered by the sportsbook reflect the probability that is the less to the actual probability of that outcome occurring.
There are several excellent free calculator tools on the web, but it is nice for every sports bettor to know how to calculate the betting margin manually.
Every sport has his own margins, and in general, lowest margins are in US sports, while football has the highest margins.
The essential thing that you need to know before you start betting on sports is to learn and see where bookies make a profit and how you can exploit their weaknesses. Difference between odds and margins is one of the ways where you can make a difference. When you know how to calculate margin and to find value in the odds, you will have an advantage over the bookmaker. Be wise and choose wisely your bookmakers. You need every trick in the book in order to be profitable in the long run. Sports betting is a complex discipline.
What is Betting Margins and How to Calculate it? Nowadays the sports betting industry is vast, growing every single day, and there are a lot of available s