What is bookmaker’s margin

 

You have already probably encountered a term bookmaker's margin or cut or juice. This is basically a term that specifies the amount every bookmaker in the world takes from taking your bets. Of course they are taking their cut as they aren't charity organizations. In the beginning of sports betting, bookmaker would take a cut out of winner's winnings and it was even polite from winning bettor to round up this amount to a higher number. Now days, bookmakers take a cut from every bet you make, but it is less obvious to notice it as this percentage is incorporated into odds. What do we mean by incorporated and what is a bookmaker's margin today actually?

 

How margin is calculated?

 

Bigger odds mean lower margin. Lets take for example a tennis match between Murray and Nadal and lets say that due to certain circumstances chances for either one to win is 50%. When you transfer this into odds you get 100% divided by 50 % equals odds 2 (+100 on American odds or 1/1 – evens on UK odds).

 

Now bookmaker knows that if he offers 1000 of matches with the same chances of win at odds 2-2 he will break even if his odds are correct. The way bookmaker can make money is that they won't off odds 2, but odds 1.85-1.85. When you calculate 100/1.85+100/.185 you get 108%. this means that this bookmaker has 8% of margin on this market. Some other might offer 1.91-1.91 on this same match meaning he has lower margin in order to attract more money on it. This, in the long term, secures that bookmaker makes a certain percentage of every bet made. Their goal is not to take all of your money, but to take their cut out of using their services.

 

Which markets have the lowest margin?

 

In general, 2-way markets have the lowest margins. The margin that is applied on this market also depends on whether it is a high profile event such as NFL, NBA, Grand Slam match or a low profile match like ITF Bogota. On ITF it is only normal for bookmakers to have bigger margins to secure profit as these events are more risky to offer, there is less information available about players etc. Margin also depend it it is a main market like 2-way win or a minor market like who wins the next point. On minor markets not only that it is usual to have bigger margins, but it is also common for bookmakers to accept only smaller amount of bets. So besides 2-way win, markets that usually have lower margin are: Asian handicap and over/under. Betting on these markets means that you leave anywhere from 2 up to 8% depending on a bookmaker.

 

After 2-way markets, there are 3-way win or 1x2 markets. Margin on these markets ranges from 4-12% depending on a bookmaker. They also offer bigger odds on major events like Champions League, Premier League... and main markets like full time win. Half time win market usually has bigger margin attached to it therefore lower odds.

 

On markets with 4 or more possible outcomes bookmakers usually apply margin from 12-50%. This is not only because these markets have high odds and therefore carry bigger risk of high payouts, it is also because these markets are considered to be a very minor ones and by itself present a risk for bookmaker to offer in the first place.

 

Choice of bookmaker

 

It makes a difference when you win on 1 bookmaker the same selection at odds 1.83 and on other bookmaker at odds 2.05, but we must also warn you that the quality of odds is not the only criteria you must look at when choosing a bookmaker. Other important factors are security of money and payments, how wide it the coverage of markets and sports, additional features like cashout and of course frequency and amount of bonuses they offer. It also depends on what do you want to bet on, because some bookmakers will offer higher odds on NBA matches, other will offer better odds on Bundesliga, third ones will have the best odds on horse racing.

 

Every good bettor has open account on several bookmakers. They always choose ones that are secure with payments, have solid bonuses and additional features. The reason why they choose several bookmakers is because there isn't one bookmaker in the world that offers all the best qualities. So we divide them into 3 categories. Ones that have great betting limits and great odds, ones that have good odds and very wide coverage and betting exchanges as a must have for any serious betting activity. On betting exchanges you can hedge out any bet at any given time with almost any amount you want and be sure that your bet will be accepted by bookmaker. By hedging out on betting exchanges you will not raise suspicion and your account will never be limited or banned. Some bookmakers don't like you to do this.

 

Betting margin on multiples

 

When you are betting on 15 or 20 matches in 1 betslip, you give bookmaker more juice. They have much bigger margin as margin of every event adds up to a total of 80% or 90% of margin. This is what bookmakers make the most money from. Small stake multiples with huge potential winnings. You might win this kind of bet once in a life time, but be assured that you will pay much more money to bookmaker before you win it.

 

Betting on multiples with 2-5 selections with higher stake is much more profitable in the long run. Betting on singles with huge stake can be even more profitable, but it is very risky to take such action. Hitting a bad run will destroy your bankroll despite the fact you took the best price on the market with lowest margin.

 

Margin on favorites versus margin on underdogs

 

It is well known that all bookmakers want to be attractive on major events. They also want to be more attractive on favorites to attract more money, to be more competitive considering other bookmakers. This is because they think that if they have odds 1.91 on Arsenal to win and their competition has odds 1.89 this will make a huge difference on where bettors will open their account. In general, they think we are stupid. I know that because I worked for several major bookmakers and been betting for 15 years.

 

This means that the margin on high profile matches is not equally distributed. On favorites they take less margin than on underdogs. Underdogs to win at odds 5 or 6 present more risk for a bookmaker because guys who make odds will not be held responsible and nobody will ask them questions if there is a big payout on low odds. This is considered natural to happen. But if there is a big payout on odds 6 and someone finds out odds could have been 5, there is a problem.

 

Also, almost nobody bets on draws. So most of them remain high with odds on draw as they know it will not attract a lot of money. Except for draws in Argentina B League, Italian Lega Pro, French 2nd League and similar leagues where the chance of draw is much higher for some reason and therefore odds on draw are lower.

 

Conclusion

 

Margins of bookmaker are not some evil they impose in order to rob you off your money. Margins are simply the way bookmakers charge you for using their services. It is up to you to choose the bookmaker or more of them you want to place your bets on. Be sure to have in mind the potential difference in profits in the long run and not to choose a bookmaker with horrible odds. But also consider other factors of betting as well. We wish you good luck and invite you to take a look at some other articles we prepared just for you.

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