Margin (Vig/Juice)

Margin is how bookmakers guarantee profit. Instead of offering fair odds where implied probabilities sum to exactly 100%, bookmakers inflate odds slightly, creating an overround above 100%. This difference is the margin—the bookmaker's guaranteed cut of every betting market. Understanding margin is essential for identifying value and maximizing long-term betting returns.

How Margin Works
Calculating Margin
Margin by Bookmaker Type
Margin by Market Type
Finding Fair Odds from Margin
Minimizing Margin Impact

How Margin Works {#how-it-works}

Imagine a fair coin flip. True probability is 50/50, so fair odds would be 2.00 on each side. A $100 bettor on heads and$ 100 bettor on tails would exactly cancel out—the bookmaker makes nothing.

Instead, bookmakers offer 1.91/1.91:

Outcome	Fair Odds	Bookmaker Odds	Implied Prob
Heads	2.00	1.91	52.4%
Tails	2.00	1.91	52.4%
Total	100%		104.8%

The total implied probability exceeds 100%—the extra 4.8% is the margin.

Bookmaker's Guaranteed Profit:

$100 bet on heads at 1.91
$100 bet on tails at 1.91
Total collected: $200
Any outcome pays: $191
Bookmaker keeps: $9 (4.5% of total)

Calculating Margin {#calculation}

Basic Margin Formula (Two-Way Market)

\text{Margin} = \frac{1}{\text{Odds}_1} + \frac{1}{\text{Odds}_2} - 1

Example: Tennis Match

Player A: 1.65
Player B: 2.30

\text{Margin} = \frac{1}{1.65} + \frac{1}{2.30} - 1 = 0.606 + 0.435 - 1 = 0.041 = 4.1\%

Three-Way Market Formula

\text{Margin} = \frac{1}{\text{Odds}_1} + \frac{1}{\text{Odds}_X} + \frac{1}{\text{Odds}_2} - 1

Example: Football 1X2

Home (1): 2.40
Draw (X): 3.30
Away (2): 2.90

\text{Margin} = \frac{1}{2.40} + \frac{1}{3.30} + \frac{1}{2.90} - 1 = 0.417 + 0.303 + 0.345 - 1 = 6.5\%

General Formula (Any Number of Outcomes)

\text{Margin} = \sum_{i=1}^{n} \frac{1}{\text{Odds}_i} - 1

Converting Margin to Percentage

\text{Margin \%} = (\text{Overround} - 1) \times 100

Where Overround = sum of all implied probabilities.

Margin by Bookmaker Type {#by-bookmaker}

Sharp vs Soft Bookmakers

Bookmaker Type	Example	Typical Margin	Target Customer
Sharp	Pinnacle, Betfair Exchange	2-3%	Professional bettors
Standard	Bet365, William Hill	4-6%	Regular bettors
Soft	Regional books, new operators	8-15%	Casual bettors

Why Margins Differ

Sharp bookmakers (low margin):

High volume compensates for low margin
Welcome professional bettors
More accurate odds (adjusted by sharp money)
Limited promotions

Soft bookmakers (high margin):

Higher profit per bet
Limit/ban winning bettors
Offer promotions to attract recreational bettors
Less accurate odds (slower to adjust)

Margin Comparison Example

Same market across bookmakers:

Bookmaker	Home	Draw	Away	Margin
Pinnacle	2.48	3.42	2.95	2.8%
Bet365	2.40	3.30	2.90	6.5%
Soft Book	2.25	3.10	2.70	10.4%

Impact on $1,000 wagered:

Pinnacle: Expected loss $28
Bet365: Expected loss $65
Soft Book: Expected loss $104

Margin by Market Type {#by-market}

Typical Margins by Market

Market Type	Typical Margin	Why
Main match odds (1X2, ML)	3-6%	Most liquid, most scrutinized
Asian Handicap	2-4%	Popular with sharps
Over/Under totals	4-6%	Moderately liquid
Both Teams to Score	5-8%	Less liquid
Correct Score	15-30%	Hard to price, many outcomes
First Goalscorer	15-25%	High variance
Prop bets	10-30%	Low liquidity, hard to price
In-play	5-15%	Risk compensation for speed

Why Some Markets Have Higher Margins

More outcomes = More opportunities to hide margin
Less liquidity = Less competition, less sharp money
Harder to price = More uncertainty for bookmaker
Higher variance = Risk compensation

Margin Across Sports

Sport	Typical Margin	Notes
Football (soccer)	3-6%	Most liquid market
Tennis	3-5%	Two-way market, efficient
Basketball (NBA)	4-6%	High volume
American Football	4-6%	Spread betting popular
Horse Racing	15-25%	Many runners, high variance
Esports	5-10%	Growing, less efficient

\text{Fair Odds}_i = \text{Odds}_i \times \text{Overround}

Example:

Bookmaker odds: 1.91/1.91 (4.8% margin, 104.8% overround)
Fair odds: 1.91 × 1.048 = 2.00 / 2.00

Method 2: Proportional Distribution (More Accurate)

Margin is often larger on longshots:

\text{Fair Probability}_i = \frac{1/\text{Odds}_i}{\sum(1/\text{Odds}_j)}

\text{Fair Odds}_i = \frac{1}{\text{Fair Probability}_i}

Example: Three-Way Market

Odds: 2.40 / 3.30 / 2.90
Sum of implied: 0.417 + 0.303 + 0.345 = 1.065

Fair probabilities:

Home: 0.417/1.065 = 39.2%
Draw: 0.303/1.065 = 28.4%
Away: 0.345/1.065 = 32.4%

Fair odds:

Home: 1/0.392 = 2.55
Draw: 1/0.284 = 3.52
Away: 1/0.324 = 3.09

Fair Odds Table

Bookmaker Odds	Implied Prob	At 5% Margin	Fair Odds
1.50	66.7%	63.5%	1.58
1.91	52.4%	49.9%	2.00
2.00	50.0%	47.6%	2.10
2.50	40.0%	38.1%	2.63
3.00	33.3%	31.7%	3.15
5.00	20.0%	19.0%	5.26

Minimizing Margin Impact {#minimizing}

Strategy 1: Use Sharp Bookmakers

Primary strategy—lower margin = better odds = higher returns.

Annual Impact on $50,000 Wagered:

Bookmaker Margin	Expected Loss	Difference
2% (Pinnacle)	$1,000	Baseline
5% (Standard)	$2,500	+$1,500
10% (Soft)	$5,000	+$4,000

Strategy 2: Odds Comparison

Always compare odds across multiple bookmakers:

\text{Effective Edge Gained} = \frac{\text{Best Odds} - \text{Average Odds}}{\text{Average Odds}}

Strategy 3: Focus on Low-Margin Markets

Prioritize markets with lower margins:

Instead of...	Consider...
Correct score (20% margin)	Asian handicap (3% margin)
First goalscorer (20%)	Over/Under goals (5%)
Multi-way props	Two-way markets

Strategy 4: Line Shopping

Different bookmakers have different opinions. Find where your selection has best odds.

Example: Liverpool to Win

Bookmaker	Odds	Implied	Your Edge (if 55% true)
Book A	1.80	55.6%	-0.6%
Book B	1.85	54.1%	+0.9%
Book C	1.90	52.6%	+2.4%

Same bet, wildly different value.

Strategy 5: Betting Exchanges

Exchanges like Betfair charge commission (typically 2-5%) instead of margin:

You bet against other bettors, not the house
Often better odds than traditional bookmakers
Commission only on winnings

Margin and Profitability {#profitability}

Breaking Even Requirement

To break even, your edge must exceed the margin:

\text{Required Win Rate} = \frac{1}{\text{Odds} \times (1 - \text{Margin})}

Odds	At 3% Margin	At 6% Margin	At 10% Margin
1.50	68.7%	70.9%	74.1%
2.00	51.5%	53.2%	55.6%
3.00	34.4%	35.5%	37.0%

Long-term Impact Calculator

\text{Expected Profit} = \text{Edge} - \text{Margin}

Your Edge	3% Margin	6% Margin	Result
2%	-1%	-4%	Losing
5%	+2%	-1%	Depends
8%	+5%	+2%	Profitable

Analyze margins with these tools:

Margin Calculator - Calculate margin from odds
Fair Odds Calculator - Remove margin to find true odds
Odds Converter - Convert between odds formats

Margin