How to calculate Horse Racing margins

Horse Racing Margin explainer



Horse Racing and bookmakers go hand in hand. You can’t have one without the other and todays racing punter has never had it so good with so many betting sites to choose from to place their racing bets. However, not all bookies are created equal, and a little closer inspection will show that some offer you far greater value on your racing bets than others.

What are we getting at? It all comes down to the margin, and what margin each bookmaker bets to for each race. The higher the margin the more profit the bookmaker has built in for himself, the lower the margin the more value the bookmaker is offering to the punter.

Example

Taking the 2.15 Chepstow race as an example, let’s compare the odds offered by bet365 and skybet to calculate what margins they have built into their books:

Horse Racing margin comparison 1


To calculate each bookies margin here we make the following calculation using the decimal odds:

bet365: 100/2.38 + 100/2.75 + 100/4.5 + 100/8.5 + 100/29 + 100/101 + 100/126 = 117.60%

Skybet: 100/2.25 + 100/2.75 + 100/4.5 + 100/8 + 100/29 + 100/101 + 100/101 = 120.96%

The above shows that bet365 have built in a lower margin here compared to skybet, and are therefore offering the better value odds to customers.

In this particular case bet365 are either equal to or better than the price offered by skybet for every single horse in the race. This will not always be the case but the bookmaker with the lower overall margin built into a race will, by definition, also be the one with the better odds on the majority of runners in that race.

Now let's take a look at the 3.45 race over at Kempton, and compare the prices offered by bet365, Ladbrokes and skybet:

Horse Racing margin comparison 4



To calculate each betting sites margin here we make the same calculation using the decimal odds:

bet365: 100/2.25 + 100/4.5 + 100/7 + 100/8.5 + 100/10 + 100/15 = 109.38%

Ladbrokes: 100/2.2 + 100/4.5 + 100/7.5 + 100/9 + 100/10 + 100/13 = 109.81%

skybet: 100/2 + 100/4.5 + 100/7 + 100/8.5 + 100/9.5 + 100/13 = 116.49%

As we can see, once again bet365 are betting to the lowest margin on this race and are therefore offering the best overall value to punters. However you will also notice that while 365 are betting to the lowest overall margin, Ladbrokes is not far behind, betting to just a 0.43% bigger margin than bet365, and are in fact offering better odds on horses 3 and 4. So it's important to remember that whilst the bookie with the lowest overall margin will usually by definition have the best odds, when it comes to fine margins like the case here, it pays to have accounts with a variety of betting sites and take the best price available on your selection on the day.

As for skybet, they are once again the worst value with a margin of 116.49%. To put that another way, with this margin skybet could expect to payout £100 for every £116.49 they take in bets on this race (if they balance their book properly and were to take an even amount on each runner), were as Ladbrokes for example would be looking to payout £100 for every £109.81 they lay on the race, therefore paying out more and thus offering better value to punters.

Doubles, trebles and accumulators

It's worth also considering the compounded effect of taking the better price and betting with the lower margin bookies when placing doubles and upwards. For example if you were to place a win double on horse 4 in the 2.15 Chepstow, and horse 1 in the 3.45 at Kempton, you would be getting cummulative odds of 19.13 from bet365 and only 16.00 from skybet (using the above example tables). If your bet were to win, and for a £10 stake, that would be a difference of £31.25 in returns. Now imagine if the bet had 3 selections or more, and these are type of bets you place daily or weekly, over time betting with the higher margin bookies could really dent your returns, so remember the formula and always make sure you are getting the best value on your bets!


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