Betting Margins Explained
Odds play a significant role when it comes to sports betting. However, you can’t talk about odds without mentioning margins. Sportsbooks always want to have an advantage when assigning odds, so they introduce margins to get profit regardless of the game outcome. But that’s only the surface.
This article discusses all you need to know about betting margins on sportsbook odds. As a bettor, learning how it works can help you identify if a betting site is fair or not. Additionally, you can leverage the insights to improve your wagering strategies.
What Are Betting Margins?
Betting margins refer to sportsbooks’ built-in advantage on odds. The margin indicates how much of the total bets placed will be retained by the betting platform as profit, regardless of whether bettors win or lose. This concept is also known as the vig, juice, or overround.
To implement margins, sportsbooks often assign odds with lower probabilities than the actual chance of the event occurring. Consequently, the difference between the odds and the actual probability makes up the margin.
Purpose of Betting Margins
The primary reason sportsbooks apply margins is to get returns regardless of a sports event's outcome. Betting sites are companies with staff to pay salaries and infrastructure to maintain, which demands money. Therefore, they aim to generate profit from each wager.
Sportsbooks also use betting margins to balance risk. Sometimes, wagering patterns and other market conditions can push many bettors to stake on a high-likelihood event. If they all win, the bookie will have to release significant payouts, which can affect business. But with margins in place, they minimize the risk by retaining some profits from all the many bets.
For example, imagine a coin toss where both heads and tails represent a 50% chance each. This is known as a 100% market which would give no advantage to either the betting site or player. But, in reality, each betting site adds a certain margin on every market to ensure they have an edge over the players and profit no matter the outcome.
There is also something similar in the casino world known as the "house edge", a percentage return to the player which is always in favour of the house.
How Betting Margins Are Calculated
The moneyline odds format is the favourite for many Canadian bettors. However, to calculate betting margins, the decimal option is most suitable. Here’s the formula:
- Margin = (1/Odds A) x 100 + (1/Odds B) x 100
It’s that simple. The above is for a 2-way market, but if you’re calculating for 3-way, simply add (1/Odds C) x 100.
Betting Margin Calculation Example
To illustrate how the formula works, let’s calculate the margin for an NHL game between Nashville Predators and Vancouver Canucks. These were the moneyline odds we found on BetVictor, one of the best betting sites in Canada:
- Nashville Predators: -133 (1.75 in decimal)
- Vancouver Canucks: -105 (1.95 in decimal)
Using the formula, we have:
- Margin = (1/1.75) x 100 + (1/1.95) x 100
- Margin = 0.570 x 100 + 0.513 x 100
- Margin = 57 + 51.3
- Margin = 108.3%
By default, the combined probability of both teams is 1, which is 100%. Hence, the additional 8.3% is the betting margin — the difference between the sportsbook odds and the true probability. It means for all wagers on the moneyline market for Nashville Predators and Vancouver Canucks, BetVictor will keep 8.3% as profit, whether the bets win or lose.
Examples of Betting Margins
Betting margins significantly vary depending on sports and markets. The primary reason is that some events and predictions are more famous than others. So, sportsbooks offer lower margins on popular markets and games to attract more bettors.
Our earlier example was for an NHL game and a 2-way market. Let’s look at how the margins stand for sports like soccer and basketball.
Soccer Betting Margins
Here are the odds for the 1x2 market for a CSL soccer game between Cavalry and Vancouver FC on BetVictor:
- Home win: -167 (1.6)
- Draw: +260 (3.6)
- Away win: +360 (4.6)
If you calculate the margin, you’ll get a high 12.06%. Now, consider a more popular UEFA Champions League match between PSG and Borussia Dortmund:
- Home win: -200 (1.5)
- Draw: +333 (4.33)
- Away win: +425 (5.25)
From calculations, the margin is 8.81% — 3.25% less than the earlier game.
Basketball Betting Margins
For basketball, let’s calculate the moneyline odd margins for an NBA game between Orlando Magic and Cleveland Cavaliers:
- Orlando Magic: -182 (1.55)
- Cleveland Cavaliers: +138 (2.38)
The margin for the above odds is only 6.36%, which is much lower than what you get for soccer and the NHL. Note that the margins determine your payout. For instance, the 6.36% margin means the payout is 93.64% (100 - 6.36) if you win.
Here’s a chart of all margins we’ve computed and their payouts:
As the chart shows, lower margins lead to higher payouts.
The Impact of Betting Margins on Bets
We’ve established that you get better payouts from lower margins. As a result, the margins of odds you wager on can impact your profits over time. Simply put, if you bet more on odds with low margins, you get more returns in the long run. Therefore, it’s essential to pay attention to betting margins when selecting a Canadian sportsbook.
A simple tip we recommend is to compare odds on different betting sites. Use the formula and calculate the margins for the same event across various sportsbooks. Whichever has the lowest percentage offers the best value for your wagers.
Tips for Betting with Margins in Mind
Seeing how essential margins are, you don’t want to place your next bet without more consideration. We’ve outlined these valuable tips to help:
- Compare odds: We’ve already highlighted this, but the main point here is using odds comparison tools. You can’t always calculate margins manually, especially if you have a long list of sportsbooks to compare. So, we recommend leveraging free odd comparison tools in Canada to view many betting sites’ rates at a go.
- Access probabilities: The actual likelihood of an event gives you a quick insight into whether the odds are valuable. So, compare and access both to know if a sportsbook is being fair.
- Identify value bets: The point here is to locate odds with an implied probability lower than the actual likelihood. Such odds promise better returns if your bet wins.
- Continue learning: Always be on the lookout for resources and guides like this one to help you understand more about betting margins and probabilities.
Applying these simple tips above can improve your chances of long-term profitability when betting at Canadian sportsbooks.
Ijeoma Esther is an iGaming content writer and editor with over a decade of experience in the mobile casino industry. While initially diving into online casino gaming as a hobby, she soon found herself immersed in the enthralling world of mobile slot and live casino games. Through the years, she discovered that writing about her favourite pokies was just as fun as playing them.
