Bookmaker margin: what it is and how to calculate it

The margin (also called overround or vig) is the built-in percentage the bookmaker adds to its odds. If the odds were fair, the implied probabilities of all outcomes would add up to exactly 100%. In real lines they add up to more.

How to calculate it

Take 1 divided by each decimal odd, add the results, and subtract 1. Example for a two-way market with odds 1.91 and 1.91: 1/1.91 + 1/1.91 = 0.5236 + 0.5236 = 1.0471. The margin is 4.71%.

Another example, 1.80 and 2.05: 0.5556 + 0.4878 = 1.0434, a margin of 4.34%.

Fair odds without margin

Divide each implied probability by the total. For 1.91 / 1.91 each side is 50%, so the fair odds are 2.00 on both. This is the line as the market sees it, before the bookmaker's cut.

Why it matters

A lower margin means better prices for the same outcome. Comparing margins between lines shows where you pay less for the same bet, and fair odds let you judge whether a price is really above the market.

Related

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