How To Determine Odds In Betting

4/11/2022 admin

Explain How Betting Odds Work
How To Determine Odds In Betting
How Do Betting Companies Calculate Odds
How Sports Betting Odds Work

So the Decimal odds for a coin being heads is 1 (certainty) divided by the probability of it occurring which we know is 0.5, producing decimal odds of 2.0. At this point you can equally take odds and reverse engineer the implied probability with the inverse of the equation for turning probability into odds: 1/decimal odds = probability. How Are Odds Determined? Odds are engineered to attract equal action on both sides of a betting line. In a perfect world, a sportsbook receives equal betting volume on both sides of a wager then, win or lose, they’ll make 5-10% on the juice (or ‘vig’). American odds (aka moneyline odds or US odds) are popular in the United States. The odds for favorites are accompanied by a minus (-) sign, indicating the amount you need to stake to win $100.

Bookmakers are constantly claiming to have the highest odds available, but, with so many claiming to have the best odds, how do we know who’s telling the truth?

To start, bookies offer odds that are lower than the actual probability of an event occurring. This is known as the betting margin. Essentially the added price a betting site “charges” you to place the bet, ensuring a profit regardless of the outcome.

As an example, imagine betting margins as a coin toss. In this example, both heads and tails represent a 50% chance each.

This is known as a 100% market which gives no advantage to either the punter or the bookie. But, this is not the case. In reality, each betting site will add on a certain margin to ensure they always have the advantage over punters.

Learning how to calculate betting margins is a crucial skill for every punter. Once you master this simple calculation, you can easily find the best odds in every market.

Working out betting margins using the decimal odds format is by far the easiest way. If you struggle with decimal odds check out our odds guide.

How to Calculate the Betting Margins

There is a simple equation we use to calculate the betting margins. You can use this calculation across all the sports and markets as they tend to differ greatly.

It’s important to remember, the higher the margin, the lower the value for a punter. Margins are easily the best way to compare odds and find their true value.

Also, live betting margins tend to be much higher than in pre-match markets.

To calculate the margin for a two-way market, like basketball or tennis use this example:

(1/decimal odds) *100 + (1/decimal odds) *100 = Betting margin

Unibet tennis: Casper Ruud 2.48 vs David Ferrer 1.54

(1/2.48) *100 + (1/1.54) *100 = 40.3 + 64.9 = 105.2 = 5.2% margin

William Hill tennis: Casper Ruud 2.50 vs David Ferrer 1.50

(1/2.50) *100 + (1/1.50) *100 = 40 + 66.6 = 106.6 = 6.6% margin.

With this simple calculation, you can see that Unibet offer a 1.4% better margin than William Hill for this tennis event.

This is important for value over the long run. Find the best odds with the lowest margin to increase your potential profit.

Explain How Betting Odds Work

To calculate margins for a 1×2 market like football use this example:

(1/home odds) *100 + (1/draw odds) *100 + (1/away odd) *100 = Betting margin

Unibet football: Wolfsburg 1.75 (home) X 3.70 (draw) Norwich City 3.95 (away)

(1/1.75) *100 + (1/3.70) *100 + (1/3.95) *100 = 57.1 + 27 + 25.3 = 109.4 = 9.4% Margin

William Hill football: Wolfsburg 1.70 (home) X 4.0 (draw) Norwich City 4.0 (away)

(1/1.70) *100 + (1/4.0) *100 + (1/4.0) *100 = 58.8 + 25 + 25 = 108.8 = 8.8% Margin

Now you can see William Hill is slightly better with a 1.6% margin less than Unibet.

These are only meant as examples to give you an idea of how much bookies actually “charge” you to place a bet.

In our football margins test, there was a massive difference in margins between the best and worst.

BetVictor consistently offer the best odds and lowest margins for betting on football in our tests.

Bet £5 get £30 with BetVictor today!

18+ New Customers only. Deposit, opt in and place a £5 qualifying bet at odds of 2.00 or greater within 7 days of opening a new account; excludes cashed out bets. Receive 2x £10 Free Sports Bets, valid on set events only at odds 2.00 or greater, expires in 7 days. Plus a £10 Game Show Bonus, selected games, wager 40x to withdraw a max of £250. T&Cs Apply. Please Gamble Responsibly.

Betting Margins Conclusion

Now you know how to calculate betting margins for two way and three-way markets, you can now easily identify the best odds and lowest betting margins across bookmakers.

Although betting margins are ever-changing, you can still use them to get an idea of the best bookies to use if you want the most value for your money.

Check out the Betfair betting exchange if you are searching for a fairer market. They will charge a 2-5% commission on winnings only, whereas, bookmakers add their margins regardless of whether you win or lose.

Claim your £20 Exchange Free Bet

Betfair welcome offer