Bookmaker margin calculator: how to work out the overround from any odds

Bookmakers don't charge a fee. Their cut is built into the prices, and it's called the margin or overround. A bookmaker margin calculator works it out from the odds alone, and you can do the same with a pencil. It's the sports equivalent of a casino's house edge, and it decides how much a free bet or bonus is really worth.

Step 1: convert odds to implied probability

Every price implies a probability. For decimal odds, divide 1 by the odds. For fractional odds, divide the second number by the sum of both numbers.

• 2.10 → 1 ÷ 2.10 = 47.62%
• 5/4 → 4 ÷ (5 + 4) = 44.44% (the same as 1 ÷ 2.25)
• Evens (2.0) → 50%

Step 2: add up the whole market

In a fair market the implied probabilities of every outcome would add up to exactly 100%. In a real one they add up to more. The excess is the overround.

Worked example: a football match

Home 2.10, draw 3.40, away 3.60:

The overround is 4.81%.

Overround, margin and payout

The same market can be described three ways, and different sites use different ones:

• Overround: 104.81% − 100% = 4.81%.
• Payout: 100 ÷ 104.81 = 95.41%. This is the sports version of RTP.
• Margin (edge): 100% − 95.41% = 4.59%. This is the share of stakes the bookmaker keeps on average if bets are spread in proportion to the prices.

Step 3: strip the margin to find fair odds

Divide each implied probability by the market total to get a "fair" probability, then turn it back into odds:

• Home: 47.62% ÷ 1.0481 = 45.43%, fair odds about 2.20
• Draw: 29.41% ÷ 1.0481 = 28.06%, fair odds about 3.56
• Away: 27.78% ÷ 1.0481 = 26.50%, fair odds about 3.77

This spreads the margin evenly, which is the simplest method. In practice bookmakers often load more margin onto outsiders, so treat fair odds as an estimate.

Horse racing: bigger fields, bigger books

The method works for any market. A four-runner race priced 2/1, 5/2, 3/1 and 4/1 gives 33.33% + 28.57% + 25.00% + 20.00% = 106.90%, an overround of 6.90%. With more runners there are more prices to add up, so check the total before assuming a race is good value.

Comparing bookmakers

Take a two-way tennis market:

Bookmaker 2 has the lower margin overall, but if you want Player B, Bookmaker 1 still has the better price. Compare the price for your selection, and use the overround to judge which bookmaker is generally sharper.

Why margin matters for free bet value

Using the fair probability from the football example, a $10 free bet (stake not returned) on the home team at 2.10 is worth on average $10 × 1.10 × 45.43% = $5.00. The same free bet at 2.00 elsewhere is worth $10 × 1.00 × 45.43% = $4.54. A few pence of price on every free bet adds up over a season. The free bet calculator guide has a shortcut formula that gives the same answer.

Margin compounds in accumulators

If each leg pays out about 95.24% of fair value (a 5% overround), a double pays out 0.9524² ≈ 90.7% and a four-fold 0.9524⁴ ≈ 82.3%. The bookmaker's edge on that acca is about 17.7%, nearly four times the single-bet figure. Our single and double bet calculator guide shows how the returns multiply.