**Do you know what a 'margin' is and how crucial it is to your betting? The bigger the bookmaker's margin, the more accurate you have to be with your bets to make a long-term profit. Find out more.**

**Margin and Best Odds**

In essence the margin - also known as a betting over-round or market
percentage - is the additional amount over 100% that the odds on all equally
exclusive outcomes of an event imply.

Let's use a fair die toss as an example. Each outcome (number) has the
same probability (1/6) of occurring. Therefore for example, every £1 bet placed
on rolling a ‘3’ should return £6 (including your £1 stake).

The decimal odds for this example is 1/probability = 1/(1/6) = 6.00
while its equivalent moneyline odds are +500.

However, a betting company needs to make a profit and therefore would
offer odds of 5 rather than 6, which doesn’t fairly reflect the implied
probability. Over six die tosses, your number is expected to come up once.
Therefore if you staked £6 but received £5, the bookmaker makes £1 in profit.

It is however, important to note that in reality streaks are possible.

In this case, the implied probability per outcome is 20% (1/5). However
if you calculate all six outcomes, the sum of probabilities would be 120% (6
outcomes x 20% per outcome). The difference between the 100% and this sum of
probabilities is the margin. In this case it is 20%, in favour of the
bookmaker.

**So how do margins affect your betting?**

Essentially, the higher the bookmaker margin is, the more the odds are
stacked against the bettor.

In the example given above, at odds of 5.00, the bettor must make
correct guesses of the outcome 20% of the time. Out of 100 guesses, the bettor
would need to make 20 correct guesses to break-even.

Therefore for a bookmaker margin of 20%, the bettor would need to
correctly predict three extra rolls of the die – as the bettor needs to make 17
correct guesses (1/6 of 100) if there is no margin.

Let’s now examine the break-even point with different margins to
highlight how this impacts your betting. We used four examples - a coin toss, a
roll of the die, an event that has a 90% chance of occurring and an unlikely
event that has a 10% chance - with each tested over 100 simulations.

For a coin-toss, the fair odds would be 2.00 on any outcome. In this
case bettors would need to make 50 correct guesses to break-even. However, if
the margin was 5%, then the odds provided would be 1.904.

In this case, 53 guesses from 100 are needed to break-even. As can be
proven mathematically, the graphs bellow all indicate a similar trend, the
higher the bookmaker margin, the more correct bets a bettor must make.

**What have we learnt?**

All strategic long-term bettors seek to maximise their returns by
obtaining the highest odds possible. The higher the margin, the lower the odds
are, and to compensate, an increase in correct guesses by the bettor to obtain
break-even is needed.

Essentially this increase is a rounding up of the margin multiplied by
the break-even if the margin was zero. For example in a coin toss, the
break-even, if the margin was zero, is fifty guesses. When a margin of 3% is
applied, the increase is 3% of 50, which is 1.5, but this is rounded up to 2.

Therefore 52 guesses would be required if the margin was 3%. Markets on
popular sports are offered as low as 2% at Pinnacle Sports compared to an
industry average of 5% - clearly resulting in more value.

This article identifies how crucial margins are to betting. The bigger
the margin, the more accurate your bets must be to win in the long run.