Being able to know how bookmakers are generating money can help you understand why they offer such a low value compared to exchanges that let you acquire more profits.
Bookmakers are either an organization or a person that is setting and selling odds on upcoming events. They work much like Satta King agents. They are able to make money by means of accepting bets on the market and then, pricing in a way that doesn’t represent true probabilities of the result. With this overground or margin, they are able to get the advantage over bettors.
Simple Coin Toss
One straightforward way to explain bookmaker betting margins is through a simple coin toss. The likelihood of landing on either side is at 50 percent. Meaning to say, the odds must be priced at 2/2 on each side. Therefore, if you decided to bet $100, you should win $100, which makes it a 100 percent market.
Whether you like it or not, it’s never in the bookmaker’s interest to offer bettors the true probabilities of the event. Rather, they are pricing markets to push over a hundred percent, which creates an advantage that’s on their favor. Price deviation offered from “true odds” is the margin of any bookmaker.
Going back to the coin toss example, bookmakers will be offering tails or heads at odds lower than 2. This means that you need to bet more in order to win $100. Assuming that the odds are at 1.91 with a margin of 4.7 percent, this would make average bettors lose $5 for every dollar spent.
Calculating Margins Set by Bookmakers
Due to the reason that bookmakers are not openly discussing the market overground in the manner exchange does, it is very useful to take a look at betting margins. By the time that you have calculated these figures, you’ll be able to see the variation across bookmakers and how this could significantly affect your possible return on every bet.
Why Exchanges Offer Greater Value?
Exchange provides a real picture of how much the bet is actually worth. On the betting exchange, users are betting against each other, which eliminates the need for bookmakers. At the end of the day, supply and demand will still be a driving force in the market which results in better odds than what bookmakers offer.
Rather than bookmaker’s margin, exchanges are charging a commission on every winning bet. There are websites that you can find which offer like 2 percent commission on the net profits. Some may be more or less but it is your job to find more about this.