How Bookmaker Margins Work
A bookmaker margin is the built-in profit an operator bakes into its prices. When you add up the implied probabilities of every outcome in a market, the total comes to more than 100% — that extra slice is the margin (also called the overround, vig or juice). It's why a genuine 50/50 contest never pays out at true even money.
For Australian punters the practical point is simple: the lower the margin, the more you keep when you win. On a sample of markets we tracked, average margins ranged from roughly 4.9% at Sportsbet to about 7.4% at bet365 — a gap that adds up fast over a season of AFL, NRL and racing bets. This guide shows how to calculate a margin yourself, why it varies by sport and market, and how to use it to compare prices before you back a runner.
The overround: why probabilities add up to more than 100%
Every set of decimal odds implies a probability. Convert odds to implied probability with a single formula:
implied probability = 1 ÷ decimal odds
Take a head-to-head AFL market with both sides priced at $1.90. Each side implies 1 ÷ 1.90 = 0.5263, or 52.63%. Add the two together: 52.63% + 52.63% = 105.26%.
A fair market with no margin would total exactly 100%. The extra 5.26% is the bookmaker's margin on that market. It doesn't matter which side wins — the operator has structured the prices so the book is balanced in their favour across all outcomes.
The higher the total, the more the punter is paying for the privilege of placing the bet. A 105.26% book is far friendlier than a 112% book. This is the single most useful number to look at when you're comparing where to place a specific bet.
How to calculate a bookmaker margin step by step
The full formula for any market:
margin % = (sum of (1 ÷ odds) for every outcome − 1) × 100
Worked example — an NRL match with three outcomes priced with a draw:
- Home: $2.10 → 1 ÷ 2.10 = 0.4762
- Draw: $21.00 → 1 ÷ 21.00 = 0.0476
- Away: $1.80 → 1 ÷ 1.80 = 0.5556
Sum = 0.4762 + 0.0476 + 0.5556 = 1.0794
Margin = (1.0794 − 1) × 100 = 7.94%
So on that three-way market the operator holds a 7.94% edge. Compare that against a two-way head-to-head market on the same fixture and you'll almost always find the two-way book is tighter, because there are fewer outcomes to load.
To find the fair (margin-free) price of any outcome, divide its implied probability by the book total. For the home side above: 0.4762 ÷ 1.0794 = 0.4412, giving a fair price of 1 ÷ 0.4412 = $2.27 versus the $2.10 offered. That difference is what the margin costs you on the favourite.
Implied Probability Calculator
What the margin actually costs you over time
Margin compounds. Say you place 200 head-to-head bets across an AFL season at $50 each — $10,000 turned over. On a book averaging 5% margin, the theoretical house take is around $500 across that turnover. On a book averaging 7.5%, it's closer to $750. Same bets, same outcomes, but $250 more surrendered to price alone.
That's before you factor in whether you're actually beating the closing line. Margin is the floor cost of betting; it's the amount you pay regardless of how sharp your selections are. Shaving even a point off your average margin by shopping prices is one of the few edges available to a recreational punter that requires no tipping skill at all.
See our [betting tools](/en-au/betting-tools/) and [odds](/en-au/odds/) pages to line up prices on the same fixture before committing.
Why margins vary by sport and market
Margins are not uniform. A few patterns hold across Australian books:
- Two-way markets (tennis head-to-heads, AFL/NRL match winner) usually carry the lowest margins because they're easy to price and heavily bet.
- Three-way football markets (Premier League, A-League, Champions League) with a draw option tend to run higher because the extra outcome gives room to load the book.
- Exotic and novelty markets — first tryscorer, correct score, player props, multi-leg bet builders — carry the fattest margins. Bet builders combine several priced legs, and margin stacks on each leg.
- Big, liquid events (an AFL Grand Final, a Test match, a Slam final) attract tighter pricing than obscure lower-grade fixtures.
If you want the smallest overround, stick to major two-way markets on well-bet fixtures. Racing markets behave differently again, since many Australian operators price to a total book across a full field — browse [Horse Racing odds](/en-au/horse-racing/) to see how a full field's implied probabilities sum well above 100%.
Sampled margins across Australian bookmakers
We track average margins across sampled markets. These are factual measurements from the markets sampled, not a claim about every price an operator posts:
- Sportsbet — 4.91% average margin (44 markets sampled), best price on 15.9% of them
- PointsBet — 5.64% average margin (51 sampled), best price 23.5%
- Ladbrokes — 5.82% average margin (258 sampled), best price 54.7%
- Unibet — 5.84% average margin (243 sampled), best price 56.0%
- Neds — 5.89% average margin (59 sampled), best price 35.6%
- PlayUp — 5.93% average margin (44 sampled)
- TAB — 6.05% average margin (59 sampled), best price 27.1%
- betr — 6.19% average margin (56 sampled)
- bet365 — 7.44% average margin (30 sampled), best price 23.3%
Two caveats matter. First, sample sizes differ wildly — Ladbrokes and Unibet were sampled across 240+ markets, while bet365 sat at 30, so their figures carry very different confidence. Second, "best price share" measures how often an operator topped the sampled set; Unibet (56.0%) and Ladbrokes (54.7%) led there, which is a coverage-of-competitive-prices signal, not a guarantee on your specific market.
Compare current prices yourself on our [comparisons](/en-au/compare/) and [market movers](/en-au/market-movers/) pages rather than relying on any single average.
Using margin to compare prices on a real fixture
The workflow that actually saves money:
1. Pick your fixture and market — say an NBA head-to-head or an AFL line. 2. Note the odds at two or three licensed operators. 3. Convert each book to a margin using the formula above. 4. Back the outcome you want at whichever operator offers the shortest margin AND the best price on your specific side — they aren't always the same book.
A tighter overall margin doesn't help if the operator has loaded it onto the exact runner you fancy. That's why the per-outcome fair-price calculation matters more than the headline book total. Line up prices across [all bookmakers](/en-au/bookmakers/) and check [today's matches](/en-au/matches-today/) for live fixtures where margins move as the game unfolds.
All operators referenced here are licensed to accept bets from Australian residents, regulated by state and territory racing and wagering authorities. You must be 18 or over to bet.
FAQ
What is a bookmaker margin in simple terms?
It's the profit built into the odds. When you convert every outcome in a market to a probability and add them up, the total exceeds 100%. That surplus is the margin — the amount the bookmaker keeps on average regardless of the result.
How do I calculate the margin on a market?
Add up 1 ÷ decimal odds for every outcome, subtract 1, then multiply by 100. If a two-way market is $1.90 / $1.90, that's (0.5263 + 0.5263 − 1) × 100 = 5.26%.
What is a good margin for a punter?
Lower is better. On sampled markets, figures ranged from about 4.9% (Sportsbet) to 7.4% (bet365). Anything under roughly 5.5% on a two-way market is competitive by Australian standards, though it varies by sport.
Why are football margins higher than tennis margins?
Three-way football markets include a draw, giving the book an extra outcome to price and load. Tennis head-to-heads are two-way, simpler to price and heavily bet, so they usually carry a tighter overround.
Do bet builders and multis have bigger margins?
Yes. Each leg carries its own margin, and combining legs compounds it. A multi-leg bet builder will almost always have a larger effective margin than a single head-to-head bet.
Does a low average margin guarantee the best price on my bet?
No. An operator can hold a low overall margin while loading it onto the exact outcome you want to back. Always compare the price on your specific selection, not just the headline book total.