The bookmaker’s margin: what it is, how to measure it and what it costs you

What the margin is

A bookmaker does not predict results better than you; it prices every outcome slightly short of fair and pockets the difference. If a coin toss were priced at 1.91 on each side instead of 2.00, a bettor staking 100 on each side would get back 191 for 200 staked. The 4.5 percent missing is the margin, also called the overround or, in America, the vig.

How to measure it

Convert every outcome to implied probability (1 divided by the decimal odds), add them up, and subtract 100 percent. It takes thirty seconds on any market.

What we measured

Across the twenty-two operators in our ranking, on the same forty football matches, the spread was wide. The Asian bookie and the exchange sat between 1.5 and 3 percent on main markets. The large European brands sat between 4.5 and 7 percent on top leagues, climbing to 8 and 10 on lower leagues and player markets. Some international platforms were sharp on the Premier League and Champions League and above 10 percent on the leagues nobody watches. The number changes by market, by sport and by hour, which is why a single "payout" figure quoted on a comparison site tells you little.

What it costs

The margin is a tax on turnover, not on losses. A bettor who stakes 100 a bet, ten bets a week, turns over 52,000 a year. At a 2 percent margin the expected cost is about 1,000; at 7 percent it is about 3,600. No bonus in this industry is worth the difference. It is the reason we weight odds so heavily in our scores and the reason the Asian bookie sits in a ranking dominated by bigger brands.

Where margins are widest

Accumulators, because the margin compounds leg by leg; bet builders, where the operator prices correlated outcomes with an extra cushion; outrights, where money sits for months; niche sports and low leagues, where the book has less information and protects itself; and live betting in the closing minutes. Where they are thinnest: main markets on major football, tennis and basketball, the hour before kick-off, and anything an exchange also trades.

Using it

Compare the same market across two or three of our operators before a bet and take the price with the lowest total implied probability. Over a season the difference between the best and the worst price on the same bet is larger than any promotion you will be offered.