# 2015 Bookmaker Margin Survey

### UPDATE

The following are the results of a 2015 bookmaker margin survey covering eighteen bookmakers and two betting exchanges. Both fixtures and futures markets are surveyed along with a look at margin changes during the course of a week. The study also looks at the effective bookmaker margins achieved by combining bookmaker memberships. This survey is a follow up to our 2011, 2012 and 2013 surveys. Please note that the methodology used changes each year, which makes year on year comparisons less relevant.

### What are Bookmaker Margins?

The bookmaker margin, also known as the overround, vigorish, vig, juice, the cut or the take, is the hidden amount charged by a bookmaker for accepting a wager.

When a bookmaker sets the odds they first estimate the probability of each possible outcome. In a coin toss, for example, the bookmaker will assume the probability of Heads is 50%. When using decimal odds, the fair (true) odds equal the reciprocal of the bookmaker’s estimated probability, in this case 1 / 0.50 = 2.00. To fund their services, the bookmaker adjusts these odds downward to create a profit margin. Typical odds on a selection with a 50% chance of winning are 1.91. The gap between the bookmaker’s odds (1.91) and the fair odds (2.00) is due to the bookmaker margin.

The bookmaker margin is a measure of the bookmaker’s profit margin for an event and is a hidden transaction cost for punters. This profit is how bookmakers finance their services but bookmakers vary in the margins they apply. From a punter’s perspective, the lower the margin, the better. The difference between 1.90 and 1.92 line odds may not seem significant for a single wager, but when betting repeatedly this difference has a compounding effect. This can easily make the difference between winning and losing money.

### Calculating Bookmaker Margins

When using the decimal odds system, the bookmaker margin equals the sum of the reciprocals of the odds, minus 1. Below are calculation examples using two-outcome and three-outcome events.

The margin is amount by which the market exceeds 100%.

Note that for a 100.0% market the margin is zero. If you compile the best available odds across a number of bookmakers and the combined market is below 100.0%, then the margin is negative, which means an arbitrage opportunity may exist.

### Interpreting Bookmaker Margins

The margin measures the bookmaker’s profit if they were to receive wagers on each outcome in proportion to the odds. Suppose a bookmaker offers decimal odds a on outcome A and odds b on outcome B. If proportion b/(a+b) is wagered on outcome A and a/(a+b) is wagered on outcome B, then the bookmaker will receive the same profit regardless of the result.

For example, recall that the bookmaker margin for the two-outcome event above was 3.5%. Suppose \$100,000 in total is wagered on the market, with:

(1.64/(1.64 + 2.35)) x \$100,000 = \$41,102.76 wagered on Oklahoma City and
(2.35/(1.64 + 2.35)) x \$100,000 = \$58,897.24 wagered on Denver.

Depending on the outcome, the bookmaker will pay out one of the following two amounts:

If Oklahoma City wins: \$41,102.75 x 2.35 = \$96,591.48
If Denver wins: \$58,897.24 x 1.64 = \$96,591.48

The bookmaker accepts \$100,000 in wagers but only pays out \$96,591.48 to the winners. The profit margin is (\$100,000 – \$96,591.48)/\$96,591.48 = 3.5%, as calculated by the margin earlier.

To provide perspective on how odds relate to margins, the table on the right compares equal line odds (bets with a 50% chance of winning) to their respective margins. Note that 2.00 odds equate to a margin of 0%, where the bookmaker makes no profit on the market.

## Bookmaker Margin Survey

Bookmaker margins have been calculated for eighteen bookmakers plus the betting exchanges Betfair and Matchbook. The margins were calculated using odds observed on the Friday leading up to the weekend’s round of fixtures.

The Betfair odds have been adjusted to incorporate a 5% commission while Matchbook odds have been adjusted to incorporate their 1% commission structure.

Bookmakers that offer identical odds due to sharing the same parent company have been combined into the same column.

The survey results are provided in the following sections:

1. Fixtures – a look at head-to-head, line and total score margins
2. Lines – a comparison of even lines for popular sporting codes
3. Futures – a look at margins on futures markets, such as the AFL Premiership winner
4. Time of Week – a look at how margins change during the course of a week

### 1. Bookmaker Margin Survey Results – Fixtures

#### Fixture Results Summary

The table below ranks the betting agencies in ascending order by the average of their margins for each sport. More specific data is provided later for each sport and market.

Rank Name Type Licence Margin Equivalent Line
N/A Combination of all betting agencies 0.6% 1.988
N/A Combination of Betfair, Marathonbet, Matchbook and Pinnacle Sports 1.2% 1.975
1 Pinnacle Sports Bookmaker Curaçao 2.7% 1.948
2 Matchbook Exchange Channel Islands & the UK 2.7% 1.948
3 Marathonbet Bookmaker Curaçao 2.8% 1.946
4 SBOBET Bookmaker Philippines 4.4% 1.915
5 Betfair Exchange Tasmania (AU) 4.6% 1.912
6 Palmerbet Bookmaker NSW (AU) 4.8% 1.908
7 bet365 Bookmaker Northern Territory (AU) 4.8% 1.908
8 Luxbet Bookmaker Northern Territory (AU) 4.9% 1.907
9 CrownBet Bookmaker Northern Territory (AU) 4.9% 1.907
10 Unibet Bookmaker Northern Territory (AU) 5.1% 1.902
11 William Hill  /  Centrebet  /  Tom Waterhouse Bookmaker Northern Territory (AU) 5.1% 1.902
12 Sportsbet Bookmaker Northern Territory (AU) 5.2% 1.901
13 Ladbrokes  /  Betstar  /  Bookmaker Bookmaker Norfolk Island (AU) 5.5% 1.896
14 TopBetta Bookmaker Norfolk Island (AU) 5.5% 1.895
15 10Bet Bookmaker Curaçao 6.0% 1.886
16 ComeOn Bookmaker Curaçao & the UK 6.4% 1.879

The average surveyed margin was 4.7% while the median margin was 4.9%.

Pinnacle Sports, Matchbook and Marathonbet are in a league of their own, with margins consistently below 3%.

SBOBET and Betfair have the next lowest margins, followed by a cluster of Australian-licensed bookmakers.

The bookmakers with the highest margins were 10Bet and ComeOn, who were hurt by the bias towards Australian sports in this survey. They are generally much more competitive in international sports.

The ‘Combination of all betting agencies’ shows the average head-to-head margins achieved by using the best available odds from across the surveyed betting agencies. The low 0.6% margin highlights the value of shopping around for the best value. A 0.6% margin equates to an even line bet at 1.988 odds.

Because it’s impractical to hold so many active memberships, the ‘Combination of Betfair, Marathonbet, Matchbook and Pinnacle Sports‘ shows the head-to-head margins achieved by using the best odds from these four agencies. The result was a 1.2% margin, which is less than half the head-to-head margin achieved using Pinnacle Sports on its own.

#### Results by Sport

The margins in the table below reflect the average margin across a sample of fixtures for each league. The margins have been calculated for head-to-head, line and over/under markets, where available. These margins have then been averaged to give a representative margin per sport.

The lowest average margin is highlighted in green, while the highest margin is highlighted in red. “N/A” means odds were not available for that particular sport or league during the survey. The markets observed for each sport are denoted as:

H = head-to-head market (e.g. Melbourne Storm to beat the Canberra Raiders)
L = line market (e.g. Melbourne Storm -6.5)
O = total score market (e.g. over/under 38.5 points)

The ‘Australian Sports’ row combines the average margin for the A-League, AFL, NRL, Super Rugby and State of Origin, while the ‘International Sports’ row combines the average margins for the NBA, MLB, English Premier League and tennis.

Note that Marathonbet achieved a 1.9% margin for international sports compared to a 3.5% margin for Australian sports. This result is heavily influenced by the fact that Marathonbet offers home/draw/away head-to-head markets instead of home/away for the NRL, State of Origin and Super Rugby. The same applies to 10Bet and ComeOn.

#### Results by Market Type

The following table displays the average margins by market type, where:

H2H = head-to-head market (e.g. Melbourne Storm to beat the Canberra Raiders)
Line = line market (e.g. Melbourne Storm -6.5)
O/U = total score market (e.g. over/under 38.5 points)

Because 10Bet, ComeOn and Marathonbet use three-outcome head-to-head markets (home / draw / away) for rugby league while 10Bet, ComeOn, Marathonbet and Betfair use three-outcome head-to-head markets for rugby union, their calculated head-to-head margins are higher as a result. To facilitate a fairer comparison, the “Excl. Rugby – H2H” row displays each bookmaker’s average head-to-head margin, excluding rugby league and rugby union.

SBOBET stands out for it’s high head-to-head margins compared to its line and over/under margins. SBOBET caters heavily to the Asian market so its Asian Handicap offerings are much more competitive than its head-to-head odds.

With the exception of the betting exchanges Betfair and Matchbook, generally the line markets had lower margins than the head-to-head and over/under markets. This may be because line margins are easier to compare than head-to-head odds, e.g. a Warriors -4.5 at 1.92 / Roosters +4.5 at 1.92 market is clearly better value than Warriors -4.5 at 1.90 / Roosters +4.5 at 1.90, while in a head-to-head market, most punters wouldn’t be able to see that Warriors at 1.60 / Roosters at 2.30 represents a higher margin market than a competitor that is offering Warriors at 1.65 / Roosters at 2.25.

It is likely that line markets tend to have lower margins than over/under markets simply because of their greater popularity. It may also be the case that bookmakers are more confident in the accuracy of their chosen lines than their chosen totals.

### 2. Bookmaker Margin Survey Results – Lines

The table below shows illustrative even line odds for popular sporting codes. The results are displayed as decimal bookmaker odds rather than margins.

Pinnacle Sports and Marathonbet were the standout performers, followed by Matchbook then SBOBET.

The betting exchange Betfair was one of the least competitive, due to the lack of popularity of its line markets compared to its head-to-head markets.

### 3. Bookmaker Margin Survey Results – Futures

The table below shows surveyed margins on popular futures markets. A “N/A” denotes that no futures market was offered by that particular betting agency.

For each league the number of selections surveyed is shown in brackets. These were fairly low for the Super Rugby and tennis due to the fact that odds were observed late in the respective competitions.

Betfair dominates futures betting, with commission-adjusted margins that are substantially lower than standard bookmakers. The other betting exchange Matchbook was also highly competitive, however it was much more limited in the range of futures markets offered.

While margins are generally higher for futures markets compared to fixtures, using a combination of the best available odds still yielded a low 1.6% margin on average.

### 4. Bookmaker Margin Survey Results – Time of Week

All of the survey results presented thus far were based on odds observed on Friday afternoons. Bookmaker and betting agency odds vary during the week, however, so a Time of Week study has been included in this bookmaker margin survey.

The table below provides bookmaker margins for head-to-head markets on a token fixture for each league during the course of a week. The surveyed times were Monday at 11:00 AM, Tuesday at 11:00 AM, Wednesday at 10:00 AM, Thursday at 11:00 AM, Friday at 10:30 AM and Friday again at 5:00 PM.

The ‘Start Minus Fri’ rows show the difference between the first observed margin and the margin on Friday afternoon.

The “Betting Agency Average” column shows the average of the margins each day rather than the margin achieved using the best available odds. The average margin is consistently highest on Monday and lowest on Friday afternoon.

With the exception of Marathonbet, generally the betting agencies that offered the best odds on Friday were the slowest to offer markets, with odds often not available until Thursday.

### Conclusions

Pinnacle Sports, Matchbook and Marathonbet are the standout performers for fixture margins. All three have average margins in the 2.7%-2.8% range.

Betfair is the strongest overall performer for futures betting, however Matchbook is highly competitive for the limited futures markets that it does offer.

The Australian-licensed bookmakers generally offer similar value to one another, however Ladbrokes is surprisingly uncompetitive, with a 5.5% average margin. TopBetta had the highest margins of the Australian-licensed bookmakers, however it primarily markets itself for its tournament betting rather than its regular bookmaking service.

The international bookmakers 10Bet and ComeOn were relatively competitive for overseas sports, but were hurt by their performance in the Australian codes that were weighted heavily in this study. These international bookmaker memberships remain a good complement to Australian memberships, however, due to their provision of online live betting.

It should be noted that higher margins enable bookmakers to offer more services. Pinnacle Sports offers a simple betting service with limited markets, while a higher margin bookmaker like bet365 offers a flashier user interface, a larger array of sports and markets, live video feeds and access to team statistics. Ladbrokes was uncompetitive in this survey, but it’s promotions, such as 2.00 odds on selected favourites each week, are typically more generous than its rivals.

A major result of this survey was the significant impact of holding multiple memberships. The ‘Combination of all betting agencies’ had an average margin of 0.6%, compared to 2.7% for the most competitive bookmaker. This equates to a line bet at 1.988 odds. Using a combination of the four most competitive services: Betfair, Marathonbet, Matchbook and Pinnacle Sports, achieved a 1.2% margin on average, which equates to even 1.975 line odds.

Finally, please note that this survey was conducted between late May and early June, 2015. The surveyed margins were heavily dependent on the sample of sporting events used. Comparative margin levels may change over time and will differ for sports and leagues not covered in the survey.