Odds formation. Bookmaker's margin

Beginners the same as experienced gamblers are united by a single aim: bet on the most favorable terms, thereby improving the welfare. Your profit unconditionally depends on high odds set by a bookmaker. Therefore, sooner or later you ask yourself a question: Why do different bookies set different odds for the same event?

 

Let’s consider odds formation

Formation of the odds is based on two main factors – outcome probability and bookmaker’s margin. The first factor is quite obvious as the odds are dependent on the outcome: the lower are the odds, the more probable is the outcome and vice versa.Higher chances go to the outsider but not the chalk. Bookmaker’s office will drop the odds if the outcome becomes stronger.

Margin, in its turn, is the percent which goes to the bookie. Or, in other words, net earnings of the bookmaker’s offices disregarding arber’s win or loss. When you’re making a bet, you’re paying the margin without any realization of what you have already done.

The easiest way to illustrate the notion of margin is to fancy two equal rivals.  The chance of winning the event is going to be divided per two (50/50):

Probability:

The win of the first and the second team is going to be equivalent to 0.5.

Odds:

Logically, the bookmaker’s office should have set out 2. But they set the margin of 10% instead. In such a case we may observe the odds’ drop because of the high margin. But if the leverage is divided into two (per 5%) the chances go higher (55% instead of 50% or 0.55 instead of 0.5).

All in all:

50% chance bet – you have to play with 2 odds
55% chance bet – you have to play with 1.82 odds

 

Margin varies from bookie to bookie: from 2% to 20%. Pinnacle has the lowest margin – 2% precisely.  Policy of the given bookmaker lies in large amount of users. So they turn a profit with help of players and their bets but not the margin.

We suppose it goes without saying that you have to bet on beneficial terms only. Our service gives you a possibility of seeking the best variants of odds. Good luck!