Margin Calculator

Written by: Alex Windsor
Fact checked by Brian Webb  
Updated: June 19, 2024

Every time you place a bet at a bookmaker, they charge a commission. However, it’s baked into the odds and not visible without doing calculations. With the help of our tool, you’ll be able to instantly see what your bookie is charging without having to do any maths!

MARGIN & PAYOUT CALCULATOR

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Using Our Margin Calculator

To reveal the bookmaker’s margin, you first need to select your odds (American, decimal or fractional). Then, select whether your bet is a two or three-way market. A two-way market has only two options, for example, an over/under bet, while a three-way market has three options, like a 1X2 bet (Team A to win, a draw or Team B to win). Now, enter the odds for all options.

Our tool will then tell you the margin the bookie is charging, implied probability and the fair odds for both bets.

For example, if the bookie is offering 2.00 for over 2.5 goals being scored and 1.80 for under, you would select decimal odds and a two-way market. Then, simply enter 2.00 and 1.80 into the odds boxes.

Based on the above example, the bookie’s commission is 5.56%. The over bet has an implied probability of 50%, while the under bet’s implied probability is 55.6%. Unfortunately, due to the commission, you’re not receiving the true odds, which should be 47.37% for the over bet and 52.63% for the under wager.

How Do You Calculate Margin Manually?

Using a calculator to crunch the numbers and reveal the margin is much simpler, but it’s still good to know the underlying maths. Fortunately, it’s easy to compute by following these steps:

  1. Gather the decimal odds for all potential outcomes
  2. Divide 1 by the decimal odds and multiply by 100
  3. Add all of the numbers together and minus by 100
  4. The result is the margin as a percentage

Here is an example to make things a little more clear. Let’s say Man City is paying 1.80 to beat Arsenal. The Gunners are paying 3.50, and a draw is paying 5.00. To calculate the margin, simply:

  1. 1/1.80 x 100 = 55.55, 1/ 3.50 x 100 = 28.57,  1/ 5.00 x 100 = 20
  2. 55.55 + 28.57 + 20 = 104.12
  3. 104.12 – 100 = 4.12
  4. The margin is 4.12%

What Is a Bookmaker’s Margin?

A bookmaker’s margin is the profit they should make on a game. This is the hidden transaction you pay when you place a bet and is the difference between the implied probability and the fair odds.

Thanks to the margin, if the bookie has balanced their wagers across all betting options, they are guaranteed to profit no matter the outcome. Let’s say a bookie takes £1,200 worth of action on the underdog, paying 3.00, and £2500 on the favourite, paying 1.50. If the underdog causes an upset, the bookie will pay out £2400 and keep the £2500, resulting in £100 in profit.

If the favourite wins, then the bookie will pay out £1,000 and pocket the £1,200 bet on the underdog, creating a £200 profit. Before the game even started, the bookie had banked a profit.

The lower the bookie’s margin, the better for you as a punter. In a perfect world, you could place bets with zero margin and get the event’s true odds. In this scenario, even if you were an average sports bettor, you’d break even over the long term. It’d be like playing blackjack without a house edge.

What Is Implied Probability?

Implied probability is the likelihood of an event happening based on the odds you receive from a bookie. When you add up all of the implied probabilities for an event, you’ll notice it’ll equal more than 100%. This excess percentage is the margin charged by the bookmaker.

Before you place a bet, you should always calculate your wager’s implied probability, as it can help guide your betting decisions. For example, if Man Utd is paying 3.50 (28.6% implied probability) to beat Man City, but you think that Man Utd actually has a 38% chance of winning, then it’s worth placing that bet.

Avoid High Margin Betting Markets

Most punters are shooting themselves in the foot by placing bets with high margins of over 10%. The bigger the margin, the more difficult it is to become a long-term winner. For example, to overcome a 5% margin, you need to win 55% of the time, but to beat a 10% margin, you need to win 60% of your wagers.

Even the best sports bettors in the world don’t win 60% of the bets. This is why pros typically stick to low-margin markets like handicap and 1X2, where the margin is under 3%, and they only need to win just over 50% of their wagers to turn a profit.

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Alex, a ten-year iGaming industry veteran and Managing Editor at BettingTools specializes in sports betting and betting tools. He also provides insightful reviews, ensures the accuracy of all offers, and maintains content quality helping you make informed choices. Combining professional expertise with a passion for football and soccer, Alex ensures we offer you a reliable resource, focusing on betting tools to assist with odds, accas, and other betting strategies.