What are Sports Betting Margins? - Understanding & Calculating Betting Margins Guide
Sports betting has never been bigger. Here at Stake, you can find all the top betting markets, including all the biggest sports like football, soccer and tennis. With that, though, comes all different ways of betting and terminology to describe it.
While that can be daunting for beginner bettors, we’re here to demystify sports betting terms and how to apply different bet types. Here, we’re going to break down betting margins and explain what that means when you bet at Stake Sportsbook.
What are Sports Betting Margins?
Put simply, the margin in sports betting refers to the difference between the odds on an event and that event's outcomes’ true probability. For several different reasons, the betting odds on offer at any sportsbook will not always precisely reflect the likelihood of that selection winning. As a bettor, the lower the margin or difference, the better. This is because it more accurately depicts the probability of your chosen outcome.
Why are Betting Margins Important?
When understanding the concept of betting margins, it's important to keep in mind the fundamentals of gambling, online casinos, and sports betting. One way that you can look at betting margins is as the house edge for online sportsbooks. Where casino games like slots have in-built return to player (RTP) figures, sporting events can't. In that way, odds are priced to ensure fairness while introducing a sort of house edge.
Being able to quickly work out betting margins is a valuable calculation if you're staking on popular sports. When sportsbooks’ odds setters price up events, they tend to be extremely close to accurate. However, if you can identify opportunities where there are particularly low margins, you have the chance of taking advantage of potential profits. Similarly, if you have a high-margin event, over a lengthy sample, you're more likely to lose when betting on it.
What are Different Types of Betting Margins?
As with all different types of betting and markets, there are differences in the specifics of betting margin wagers. We'll break down the main types of betting margins here.
Team Betting Margins
Betting Margins for teams are the margins that you would find in team sports for betting on. Think soccer matches and American football matches where you're betting on the moneyline or spread on one particular team.
Player Betting Margin
If you're placing a bet on a sport like tennis, boxing, or MMA, the margin here would be described as a player margin. This would also apply when you're placing proposition bets on individual players.
Winning-Margin
It's important not to get confused between a betting margin and a margin of victory bet. The latter refers to the points difference between the winner and the loser. This would be the final score in soccer betting, meaning the difference in goals between the two teams.
High-Margin
As mentioned, a high betting margin would mean that the pricing of the odds is relatively far from the actual probability. In sports betting, this is generally seen as anything with a 5% difference or above. A high margin doesn't necessarily mean that there's no value in the odds or that they're unfairly priced, but they are less likely to be profitable over time.
Low-Margin
On the flip side to the high margin, the low margin refers to odds that are particularly close to the real-life probability for an event. In betting circles, anything under 5% is good, while 2% or lower is largely seen as the pinnacle of low. These are an attractive proposition for bettors as it can be assumed that the sportsbook's edge is lower, providing greater profitability.
How to Calculate Betting Margins & Examples
After reading what defines a betting margin and the differences between the types you can find and use in different bets like parlays, you might worry that this is a difficult process. However, there's a fairly simple calculation that you can master using this simple walk-through.
Calculating Margins for a Two-Way Market
Let's say that you have a coin toss. You have just two options in terms of the outcome - heads or tails. In the real world, the odds for these two outcomes would be the same: 50%. Both outcomes would have odds of 2.0. However, because the sportsbook must bake in a margin, they've priced it up a little differently.
Heads 1.95 v Tails 1.95
To calculate the betting margin on the outcomes, we'd use this handy little formula.
So, in the case of the coin toss with 1.95 odds, it would look like this:
(1/1.95)x100 + (1/1.95)x100 = 102.56% (A 2.56% margin)
Calculating Margins for a Three-Way Market
Now, in a lot of sports - especially team sports in a regular season - there are three possibilities: home win, away win, or draw. In this case, let's look at a real Champions League fixture between Barcelona and Benfica.
Benfica 3.50 (home) - 4.20 (draw) - Barcelona 1.96 (away)
(1/3.50)x100 + (1/4.20)x100 + (1/1.96)x100 = 103.40% (A 3.40% margin)
How to Improve Your Sports Betting Strategy
As with any form of gambling, there's no real way of guaranteeing a win or long-term profitability. However, there are some techniques that you can employ to give yourself a bit more control.
In terms of betting margin strategies, you will have the greatest success in applying a calculation method when making your choices. That way, you can bet on the fixtures with the lowest margins because you will have identified some of the best pricing. That doesn't mean that you can't add anything to your ticket with a higher margin, but it is more likely to work long term.
Other than that, it's always a good idea to nail the basics of the different types of betting. That includes different things like over and under betting or handicapping. If you understand your market, whether that's the NHL or Esports tournaments if Esports betting is your thing. Knowing the pitfalls to avoid will help you make informed decisions.
Additionally, you could look to make use of bankroll management techniques. If you're new to the world of sports betting or casino gaming, our Stake blog hosts a number of how-to guides on strategies like the Fibonacci, progressive, and Kelly criterion betting systems. These can help you avoid burning through your bankroll too quickly.
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