rajabets: How to calculate profit margin in football betting odds

Novice players tend to compare odds, but smart players know that the real price bookmakers charge is the profit margin on betting odds. Our margin calculator provides an easy way to calculate the margin for your bets.

Let rajabets give an example of a football match. There are three possible outcomes in a football match (home team wins, away team wins, draw). For the first week of the 2016/17 Premier League season, Pinnacle offers opening odds of Hull City beating Leicester City at the KC Stadium at 3.41, with the latter winning at 2.39 and a draw at 3.19.

Step 1: The first step in calculating the profit margin on 1X2 odds is to convert each odds on the 1X2 market into a decimal chance of a pre-win. This is the calculation in each set of brackets: (1/odds).

For the home team (in this case Hull City), the decimal probability of Hull City winning (1/3.41) = 0.293 (which means the probability of winning is 29.3%), and the decimal probability of a draw (1/3.19) = 0.313, The decimal probability of Leicester winning (1/2.39) = 0.418.

Step 2: Now just plug the above numbers into the remaining formula to calculate the profit margin.

Profit Margin = (0.293) + (0.418) + (0.313) – 1. Therefore the profit margin is 0.024 (or 2.4%).