Understanding Market Percentages: How Bookmakers Build Their Edge

Ever wondered how bookmakers make money even when punters win? The answer lies in market percentages – a simple concept that reveals exactly how bookies build their profit margin into every bet.

Understanding market percentages is crucial for any serious punter. It shows you when you're getting fair odds, when you're being ripped off, and how to find the best value in the market.

What Are Market Percentages?

Market percentages show what the bookmaker believes is the true probability of each outcome, plus their built-in profit margin (called the "overround" or "vig").

In a perfectly fair market, all probabilities would add up to exactly 100%. In the real world, bookmakers add their margin on top, so the total is always over 100%.

The Simple Coin Toss Example

Let's start with something we all understand – a coin toss.

Fair Odds (No Bookmaker Margin)

• Heads: 50% chance = $2.00 odds
• Tails: 50% chance = $2.00 odds
• Total market percentage: 50% + 50% = 100%

This is perfectly fair – no one has an advantage.

Real Bookmaker Odds

Now let's see what a bookmaker might offer:

• Heads: $1.90
• Tails: $1.90

Converting to percentages:

• Heads: 1 ÷ 1.90 × 100 = 52.6%
• Tails: 1 ÷ 1.90 × 100 = 52.6%
• Total market percentage: 105.2%

That extra 5.2% is the bookmaker's margin and it's what you lose. Even though there's still a 50/50 chance for each outcome, you're only getting paid as if each outcome has a 52.6% chance of happening.

Why Market Percentages Matter

1. Comparing Bookmaker Margins

Lower market percentages mean better value for punters.

Example:

• Bookmaker A: Melbourne $1.80, Perth $2.00 = 106.1% market
• Bookmaker B: Melbourne $1.85, Perth $1.95 = 105.4% market

Bookmaker B offers better value with a lower margin.

2. Finding Value Bets

If your estimated probability is higher than the bookmaker's implied probability (after removing their margin), you've found value.

Example: If you think Melbourne has a 60% chance of winning, but the bookmaker's true odds (removing margin) suggest only 51.4%, you've found significant value.

3. Understanding When You're Being Ripped Off

High market percentages (over 108-110%) usually mean poor value. Some bookmakers, especially for exotic markets, can push margins above 120%.