Operating an online sports betting site is a sure-fire way to make money. After all, the global sports betting industry in 2024 is valued at over £34 billion and it is expected to rise to over £48 billion by 2029. With such obscene profits, one has to wonder why some bookmakers are so much more aggressive with their odds margins than others.
What Are Odds Margins?
To understand why some bookies are more aggressive with their odds margins, we should start by explaining what odds margins are. Odds margins, also called betting margins in some circles, are essentially the commissions that bookmakers charge for accepting bets. Bookies don’t charge a separate fee for taking your wagers. Instead, those commissions are built into the posted odds.
If you have ever seen a true 50/50 proposition like a Super Bowl coin toss being offered by a bookie from a list of bookmakers for betting in Britain, you’ll notice that the odds do not equal the true probabilities. Instead of paying out at 2.00 as you might expect from a 50/50 bet, the odds will likely be around 1.91. So, if you wager £1 on heads, and you win, you’ll receive a total payout of £1.91 instead of the full £2. Where does that other £0.09 go? Well, it goes into the bookie’s pocket. That’s the commission or betting margin, and it’s how bookmakers make their money.
Generally speaking, most top bookmakers offer odds margins of around 5% on mainstream markets like NFL spreads or EPL totals. Those margins tend to be a bit higher for secondary betting markets like game and player props. Live odds typically come with higher margins too. This is pretty standard although there are exceptions.
Why Do Some Bookies Have Higher Odds Margins?
Perhaps the most significant reason for some bookmakers having higher betting margins is nothing more than greed and a desire to beef up profits. The sad reality is that a lot of bettors, especially novices, don’t understand how odds work. They have yet to discover the importance and advantages of having multiple bookies and shopping for the best odds. Some bookmakers take full advantage of this ignorance. Once punters gain experience and get tuned in, they are likely to abandon the overpriced bookmaker in favour of a sharper bookie.
If you see a noticeable disparity in odds from one site to another, it doesn’t necessarily mean that one of the bookmakers is being greedy and arbitrarily charging a higher commission. This is because different bookies get their odds from different oddsmakers, and these oddsmakers don’t use the exact same methods for formulating the recommended prices.
The sports betting industry is highly competitive, and bookmakers are always trying to find innovative ways to attract new bettors and retain existing ones. One way of luring punters, especially experienced punters, is by offering ultra-low margins on certain major sports and betting markets such as English Premier League 1X2 bets or NFL spreads and totals. You shouldn’t have much trouble finding sub-5% margins or even sub-4% margins for these types of bets if you look around.
Two Categories of Bookmakers
You can lump online bookmakers into two main categories. In one column, you have what are called sharp bookmakers. Sharp bookies cater to experienced and professional bettors and they have a few distinct characteristics. For starters, the odds margins are often relatively low. These bookies are also very quick to react to odds movement. For instance, a sharp bookie like Pinnacle will quickly adjust the odds upon learning of a key player injury. A sharp bookie is also much less likely to limit or ban winning bettors.
Then there are what many people call soft bookies. These bookmakers usually have higher average odds margins and are slower to react to changes in betting markets. However, the most disturbing trait of soft bookies is that many of them have no compunction about limiting and banning winning bettors.
What Really Matters?
Unless you take advantage of a 0% odds margin promotion at your online sportsbook, you can’t escape the odds margin. However, you do have a bit of control over how much commission you end up paying. It doesn’t matter why a bookie’s odds margins are higher than they are at a competing sportsbook. What matters is that you get the best odds possible.
