We’ve published a few articles on the bookmakers’ margin on this very site: what is it, what does it tell us and why punters should be aware of this margin or ‘overround’ when selecting which bookie to bet with.
As a quick reminder, we can translate betting odds into probabilities and add the percentages for each selection together to see how the bookies’ book balances out.
So, if they were offering odds on the coin toss ahead of a cricket match, in a ‘fair’ market they would offer evens for England to win the toss and even money on Australia too. Why? Because heads and tails have an equal chance of being spun:
But if the bookies did offer even money on a coin toss, they would be leaving their profitability on that market completely to chance – they may run that book at a profit or a loss, depending on how many bets for each side come in and which face of the coin is spun.
Now look what happens if the bookmaker offers odds of 10/11 on heads and the same on tails:
- Heads (10/11) – Implied Probability –> 52.38% (margin of 2.38%)
- Tails (10/11) – Implied Probability –> 52.38% (margin of 2.38%)
- Total bookmaker margin -> 4.76%
For a simple, two-sided betting book, the bookmaker is able to lock in a 4.76% margin and punters – at least those not aware of value odds – are essentially none the wiser.
So that’s one single bet in which you are giving up positive expectation to the bookies. Now imagine if you placed five bets on heads at 10/11 in an accumulator – well, clearly, the bookmaker’s advantage is maximised and you place more ‘bad’ bets accordingly.
With an acca, you multiply the odds on your selections to ensure an enhanced return if all win – but, if each pick already has an overround built into its price, then aren’t you simply just multiplying the bookies’ margin as well?
Calculating Bookie Margins – Accumulators
Let’s say there are five cricket matches in a single day and the bookies are offering 10/11 on heads and the same odds on tails.
You bet on heads each time:
| – | Odds | Probability | Margin |
|---|---|---|---|
| Bet 1 | 10/11 | 52.38% | 2.38% |
| Bet 2 | 10/11 | 52.38% | 2.38% |
| Bet 3 | 10/11 | 52.38% | 2.38% |
| Bet 4 | 10/11 | 52.38% | 2.38% |
| Bet 5 | 10/11 | 52.38% | 2.38% |
To calculate the accumulative margin, we must run the following math: 2.38 x 2.38 x 2.38 x 2.38 x 2.38.
The answer? A whopping 76.36, which confirms that the bookmakers’ margin on this particular accumulator would be 76.36%.
Clearly, this is a bad bet to be placing, with an overwhelmingly negative expectation both on this wager and those placed at similar terms in the future.
And that explains why understanding bookmakers’ margins is crucial in furthering the success of your betting.
Understanding Value Bets
We use implied probabilities to work out the bookies’ margin compared to fair odds, and we can do the same to find value bets as well.
Let’s imagine a bookie falls victim to a major in-house rick that seems them price heads at 11/10 and tails at 11/10. We can do the same math as above to work out that betting on either would have a positive expectancy in the long run:
- Odds on heads -> 11/10 -> Implied probability = 47.6%
- True odds for heads -> Evens -> Implied probability = 50%
- Discrepancy = 2.4%
So, if you ever see a bookmaker offering odds of 11/10 on a genuine 50/50 market, you should probably bite their hand off.
Implied probability really is the key to successful long-term betting.
When you can bet on picks that have better odds than you would have expected, you are placing a value bet – it may win or it may lose, but in the long run if you continue to exclusively place value bets then you can expect to do better than the average, casual punter, that’s for sure.
Beating the Bookies’ Margin on Accas
Quite simply, a bookmaker will impose a margin on every single one of their betting markets that puts you, the humble punter, on the back foot.
Does that mean you can’t win? No. Does it explain why many large-scale betting operators turn over billions of pounds each year? Yes.
When you place an acca, you are simply multiplying the bookmakers’ edge with every leg you add – and that explains why betting on accumulators is, sadly, such an unprofitable exercise.
However, there is one caveat to that. If you find an edge in a market – maybe you are an expert in a niche sport/league, or have compiled your own unique proprietary data that can be translated into an edge – then you can place value bets, turning the tables on the bookies.
If you find three or more value bets, then you can place an acca of some note – this is the key to successful multiples betting on your chosen sport(s).
That is a rare old day indeed, but not all accumulators are bad bets when you have a well-defined, repeatable edge to work with.