We’ve put together a series of articles on the bookmakers’ margin, which explain how they make their money by inducing you to bet on some markets where the odds are – quite literally – stacked against you.
You can learn what the betting margin (or ‘vig’) is, how to calculate it and which football markets have the lowest/highest margin built in.
Simply browse the site if you want to find out more about value sports betting in this way.
In this article, we’ve trained our microscope on horse racing.
Which horse racing betting markets have the lowest margin and therefore offer your best hope of securing value odds? Which markets should you avoid at all costs?
Winner & Each Way
For our calculations, we’ve used a six-runner National Hunt meeting at Cheltenham (non-Festival) as our guide. It’s a small sample, but it’s a quality renewal and a liquid market – so the margin calculated will be a decent reflection of what to expect.
In each case, we’ve used the industry average (decimal) odds for each selection. Here’s the odds for the six horses to win the race.
- Royale Margaux – 3.50
- Pink Legend – 3.75
- Fortunes Melody – 4.33
- Doyannie – 6.00
- Hawthorn Cottage – 8.00
- Lost Connections – 26.00
If you’ve read our earlier guide on calculating bookmaker margins, you’ll know how much easier it is when you switch from traditional fractional odds to decimals – you can usually do this with a click of a button or a tap of your screen on your chosen betting site/app.
Now all we need to do is divide the price for each horse into 100:
- Royale Margaux – (100/3.50) = 28.57%
- Pink Legend – (100/3.75) = 26.66%
- Fortunes Melody – (100/4.33) = 23.09%
- Doyannie – (100/6.00) = 16.66%
- Hawthorn Cottage – (100/8.00) = 12.50%
- Lost Connections – (100/26.00) = 3.84%
These percentages reflect how much of the book each horse has taken, and in a perfect world adding up these figures would equal 100%. But, as we revealed in our guide to bookmaker margins on this very site, that would not be a way for the bookies to make money – apart from if they got lucky from one race to the next, that is.
Instead, they build an overround into their book. Add up the percentages for the six horses above and you will come to 111.32% – therefore, the bookmakers’ margin here is 11.32%.
That might sound quite a large amount, but it’s not uncommon for the margin to reach 20% for some UK meetings. Indeed, as a result of giving away free bets and bonuses to try and entice new customers, the overround for major races like the Grand National can reach 50%!
So when you consider the margin that every bookmaker builds into their prices, you can see why it’s so important to shop around and get the best odds for any horse that you want to back.
Extra Places
If you wanted to hedge your bets, quite literally, then one option is to bet at lower odds but with an extra place – in this case, the bookies are paying out on each way bets to three places.
So here’s the revised odds and their accompanying margins:
- Royale Margaux – 2.60 (38.46%)
- Pink Legend – 2.60 (38.46%)
- Fortunes Melody – 3.10 (32.25%)
- Doyannie – 4.90 (20.40%)
- Hawthorn Cottage – 6.25 (16.00%)
- Lost Connections – 24.00 (4.16%)
You might be getting extra places, but heavens above are you paying for it: a margin of 49.73% offers staggeringly bad value to punters.
Even the most casual, recreational bettors are well advised to steer clear of the extra place betting market. A near 50% margin will ensure you lose money in the long run no matter how good a judge of horse racing you are.
Without the Favourite
A popular betting market, particularly when the FAV is overwhelmingly fancied to prevail, is the ‘without favourite’ category.
But even when we have taken the best horse out of the field, are there any morsels of value for punters to work with?
- Royale Margaux – N/A
- Pink Legend – 2.50 (40%)
- Fortunes Melody – 3.00 (33.33%)
- Doyannie – 4.90 (20.40%)
- Hawthorn Cottage – 5.50 (18.18%)
- Lost Connections – 23.00 (4.34%)
The main betting firms run a fairly tight book in the ‘without favourite’ market, and in this case their margin was 16.25%. Still sizable, but nowhere near some of the other horse racing betting markets you can wager on.
Of course, margins can change from one race to the next – if there were more runners in the field the overround could be tighter still, whereas a race with two hotly-fancied horses against an otherwise mediocre field might see a higher margin as the bookies look to protect themselves.
And so the takeaway points are the same as always: know what you’re betting on, but understand how and where to find value markets in which the bookies don’t have you over a barrel.