Bookmaker's margin
The bookmaker's margin (or overround) is the commission built into the odds. You work it out by adding up the implied probabilities of every outcome (1 ÷ odds) and subtracting 100%: on a 1X2 market, a total of 104.8% means a 4.8% margin.
A bookmaker doesn't offer « fair » odds. If it did, the implied probabilities of a market's outcomes would add up to exactly 100% and it would make nothing on average. So it trims each price slightly: the sum of 1 ÷ odds goes above 100%, and that excess, the margin, is its built-in edge over bettors as a whole.
The formula is simple: margin = Σ (1 ÷ odds) − 1. In the major leagues, a 1X2 margin is often around 3 to 7%; it is usually higher in smaller leagues, on secondary markets (goalscorers, correct score) and in-play.
To estimate the « clean » probabilities the odds express, the most common method is proportional removal: you divide each implied probability by the total. It is an approximation (bookmakers don't always spread the margin evenly and often load it more on outsiders), but it gives a sound order of magnitude.
For the bettor, the consequence is direct: with estimates that are only roughly right, the margin tilts expected value the wrong way. And it compounds: in an accumulator, the margins on each selection multiply.
Example
1X2 odds: 2.10 / 3.40 / 3.60. Implied probabilities: 47.6% + 29.4% + 27.8% = 104.8%, i.e. a 4.8% margin. Proportional removal (divide by 1.048): 45.4% / 28.1% / 26.5%, which corresponds to fair odds of about 2.20 / 3.56 / 3.77.
How Elofoot uses it
Elofoot isn't a bookmaker: its probabilities carry no margin. The 1X2 percentages shown are whole numbers that add up to exactly 100%, and the leading outcome is capped at 95%. When a liquid Polymarket market exists, it is blended with the model (65% market, 35% model), still normalised to 100%.
Betting involves risks: losing money, debt, addiction. Betting is for adults only. Never stake more than you can afford to lose. Elofoot is a data analysis tool: it takes no bets and no prediction is guaranteed.
Frequently asked questions
- How do you calculate a bookmaker's margin?
- Add up 1 ÷ odds for every outcome in the market, then subtract 1. With 2.10 / 3.40 / 3.60, you get 1.048 − 1 = a 4.8% margin.
- What is the overround?
- It is the sum of the implied probabilities above 100%. An overround of 104.8% means a 4.8% margin.
- How do you remove the margin from odds?
- Divide each implied probability by the sum of all the implied probabilities. The outcomes add back up to 100%, and 1 ÷ the clean probability gives approximate fair odds.
See also
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