The following are the results of a 2017 bookmaker margins and markets survey. Nineteen bookmakers and two betting exchanges were included in the study. The results include a day of the week survey that compared the changing margins and available markets over the course of a typical week. Also included is a survey of how frequently each bookmaker offered the best odds for particular selections.
This study follows up on our 2011, 2012, 2013 and 2015 surveys. The methodology used changes each year, which makes year on year comparisons difficult. The primary interest is the relative margins of the bookmakers in each survey.
This survey focuses on margins and the number of markets per fixture, but a key caveat is that betting limits are ignored.
Pinnacle offers far fewer markets per fixture than Marathon Bet, for example, but it offers higher limits. The liquidity on the betting exchanges Betfair and Matchbook is also ignored. The best available exchange odds were recorded regardless of whether $10 was available at those odds or $1,000.
In addition, some bookmakers offer higher limits but will quickly limit or close your account if you regularly win with high stakes wagers. Furthermore, some bookmakers offer frequent promotions in lieu of lower odds.
These aspects are all ignored in this survey so keep this in mind when viewing the results.
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 the decimal/European odds system the fair odds, also known as the true odds, equal the reciprocal of the bookmaker’s estimated probability, in this case 1 / 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 make the difference between winning and losing money in the long-term.
Calculating Bookmaker Margins
When using decimal odds 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%.
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.
2017 Bookmaker Margins and Markets Survey Results
From April through to June 2017, odds for selected fixtures as well as the total number of available markets(1) for those fixtures were recorded for nineteen bookmakers plus the betting exchanges Betfair and Matchbook. The Betfair and Matchbook odds were adjusted for commissions.(2)(3)
For each fixture the head-to-head, line (excluding football) and total score (over/under) margins were calculated. Fixtures from the following leagues were included in the survey:
Victorian Premier League (domestic Australian football), Indian Premier League, State of Origin, UEFA Champions League, ATP & WTA tennis, MLB, NHL, NBA, English Premier League, A-League, Super Rugby, NRL and AFL.
For the A-League, AFL, NRL and Super Rugby the odds of a Friday fixture, a Saturday fixture and a Sunday fixture were recorded on Friday afternoon. For the remaining sports the odds were recorded within 24 hours of the respective events commencing.
The figures below represent the average margins and average number of markets for the surveyed leagues. “Equivalent Line” shows what the equivalent line odds would be for the respective margins. The “Combined” margin reflects only the head-to-head markets, calculated by combining the best available head-to-head odds using the surveyed bookmakers.
Table 1 – Margins and markets survey results
|Betting Agency||Margin||Equivalent Line||Markets|
Pinnacle came out on top with the lowest margins at 2.9%, with Marathonbet close behind at 3.0%. Betfair, Unibet and bet365 had the lowest margins of the Australian-licensed services at 5.0%. The average margin when combining the best available odds was 0.7%, which highlights the value of shopping around for the best odds.
Marathonbet had the best combination of low margins and quantity of markets per fixture.
Day of the Week Margins Survey
A day of the week survey was conducted for the A-League, AFL, NRL and Super Rugby. Head-to-head and line odds were recorded for the AFL, NRL and Super Rugby, while head-to-head (home-draw-away) and over/under odds were recorded for the A-League.
For each league a Friday, a Saturday and a Sunday fixture was chosen. The same three fixtures were surveyed each night of Monday through to Thursday and then late Friday afternoon.
Table 2 – Day of the week margins survey results
The following table shows the average margins for the four surveyed leagues on each day of the week. The “Combined” margin reflects only the head-to-head markets, calculated by combining the best available head-to-head odds.
As expected, the median margin drops as the week progresses, starting at 5.4% on Monday before dropping to 5.3% on Tuesday and Wednesday, then to 5.1% on Thursday and 5.0% on Friday.
Betfair showed the biggest drop during the week, with an average margin of almost 22% on Monday before dropping drastically on Tuesday to 6.9% and finishing at 5.1% on Friday. These results highlight that while Betfair performed the best of the Australian-licensed services in the general survey, it benefited from the fact that the odds were recorded late in the week.
Betstar, Bookmaker, Ladbrokes and SBOBET’s results were thrown off by the fact that they didn’t offer A-League odds until Tuesday. This brought down their Monday average because three-outcome win-draw-loss football markets generally have higher margins than two-outcome markets.
It’s worth noting that the combined bookmaker margin also dropped as the week progressed and bookmakers dropped their margins. This came as a surprise because one could imagine bookmakers opening with disparate odds on Monday before converging towards a closer consensus on Friday. It appears the dropping in margins during the week outweigh this effect.
Table 3 – Day of the week markets survey results
The following table shows the average number of markets offered for the four surveyed leagues for each day of the week. The “Mon/Fri” column shows the ratio of the number of markets on Monday compared to Friday. As with the margin results, these figures represent the average number of markets on offer for the chosen Friday, Saturday and Sunday fixtures.
These results are highly relevant for those who like to bet earlier in the week when the odds are theoretically at their lowest levels of efficiency. The theory is that the closing odds (the odds just before an event starts) are at their most accurate from a market efficiency perspective, which suggests that the odds are less efficient earlier in the week, so more opportunities exist for sharp punters. Sportsbet, Crownbet and bet365 are the standout performers in this regard because they offer more markets, and therefore more opportunities, to hunt for bargains earlier in the week.
As expected the number of markets offered increases as the week wears on, however some bookmakers approach their maximum number of markets faster than others. Pinnacle, for example, is slow to offer markets. During the survey period it didn’t offer head-to-head markets on the AFL, NRL or Super Rugby until Friday and it didn’t offer any A-League markets until Thursday. At the other end of the spectrum, Crownbet offered two-thirds as many markets on Monday as it did on Friday.
Should you bet earlier or later in the week?
It depends. If you’re a sharp punter who can spot inefficient odds then it’s worthwhile hunting for advantageous odds early in the week before they shorten towards more accurate levels (relative to the true probability of winning) later in the week. If you’re a novice, however, you’re better off waiting until just before an event starts when the bookmaker margins are at their lowest.
Occurrences of Offering the Best Odds
Bookmaker margins only show part of the picture. Some bookmakers have higher margins yet will offer the highest odds on particular selections because they aren’t following the moves of other bookmakers. It’s worth comparing how frequently each bookmaker offered the best available odds for a particular selection.
Table 4 – Occurrences of offering the best odds survey results
The following table shows the number of times each bookmaker had the best odds for a particular head-to-head selection. If two or more bookmakers shared the best odds, they were all credited as having the highest. The Mon-Fri columns show the results for the day of the week study for the A-League, AFL, NRL and Super Rugby. The “All Other Sports” column shows the occurrences for every other surveyed sport (all at an arbitrary snapshot of time within 24 hours of the events commencing).
|Betting Agency||A-League, AFL, NRL, Super Rugby||All Other Sports||Total|
Sportsbet performed well too, despite finishing far further down in the margins survey. This highlights the fact that operating with higher margins doesn’t preclude a bookmaker from offering the best odds for particular selections.
Pinnacle was strong on Friday for the Australian codes as well as for all other sports, which were surveyed within 24 hours of the events starting. For Monday through to Wednesday for the A-League, AFL, NRL and Super Rugby, however, Pinnacle didn’t feature at all due to the fact that this survey concentrated on head-to-head markets, which Pinnacle tends to only offer late in the week for weekend fixtures.
Bookmaker Margins on Futures Markets
Futures markets such as tournament winner and wooden spoon recipient weren’t included in this particular study. Previous surveys have found that the betting exchanges dominate when it comes to the lowest margins on futures markets. Betfair is the strongest overall performer for futures betting, however Matchbook is highly competitive for the limited futures markets that it does offer.
For the general margins and markets survey, Pinnacle came out on top with the lowest margins at 2.9%, with Marathonbet close behind at 3.0%. Unibet came out on top for the number of markets per fixture, while Marathonbet had the best combination of low margins and quantity of markets per fixture.
The day of week margin study found that, as expected, the median margin drops as the week progresses, starting at 5.4% on Monday before dropping to 5.0% by Friday. The combined bookmaker margin also dropped as the week progressed and bookmakers dropped their margins.
In the day of the week markets studay, Sportsbet, Crownbet and bet365 were the standout performers for offering more markets, and therefore more opportunities to hunt for bargains, earlier in the week.
The frequency of offering the best odds study highlighted the fact that operating with higher margins doesn’t preclude a bookmaker from offering the best odds for particular selections. Sportsbet performed well despite finishing far further down in the margin survey. In contrast, SBOBET, 18Bet and Mansion M88 rarely offered the best odds for any selection despite their relatively low margins. This suggests they follow other bookmaker when setting odds.
A major result of this survey is the impact of holding multiple memberships. Taking the best available odds rather than relying one a sole bookmaker yielded an average effective bookmaker margin of 0.7%, compared to 2.9% for the most competitive bookmaker. This equates to line bet odds of 1.986.
A key caveat for these results is this survey focuses on margins and the number of markets per fixture, but betting limits are ignored. Pinnacle offers far fewer markets per fixture than Marathon Bet, for example, but it offers higher limits. The liquidity on the betting exchanges was also ignored. Also some bookmakers offer higher limits but will quickly limit or close your account if you regularly win with high stakes wagers. Lastly, many bookmakers offer promotions in lieu of lower odds. These aspects are all ignored in this survey.
Finally, please note that this survey was conducted between April and June, 2017. 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.
(1) The intention is to provide a general impression of the number of markets on offer. Bookmakers vary in the way they count markets so there may not be a substantial difference between, say 80 markets and 120 if the first bookmaker counts a “Pick Your Own Line” section as one market while the second bookmaker counts each line (-7.5, -6.5, -5.5, etc.) as a separate market.
(2) The Betfair odds were adjusted to incorporate a 5% commission on profits.
(3) The Matchbook odds were adjusted to incorporate Matchbook’s unique commission structure. A 1.5% commission was applied to those odds, which is the rate charged for accepting existing offers by other members. The Consumption tax of 15% that applies to Matchbook customers who reside in the UK was not factored into the margin calculations.