Bookie edge. We’ve all heard of it. But what exactly does it mean and how can we calculate it.
Knowing the bookie edge for markets in sports betting is important because it can help us decide if a market is good or bad value to bet on.
Firstly, what exactly is the bookie edge. Well, the bookie edge is a term used to describe the advantage that the bookmaker has over the punter over time. Eg. A market where the bookie edge is 4% means over a long period of time the bookie should make an average of 4% profit for every dollar wagered on that market. This is a relatively low bookie edge. A market where the the bookie edge is 15% is very high and therefore harder for the punter to be profitable in the long run betting this market.
How to calculate bookie edge: To calculate bookie edge you’ll need to have all the odds for a certain market in front of you. Then put them through this formula: (1/oddsA + 1/oddsB) x 100 – 100. This can be done for any market with any number of options.
Eg. A line bet in the NRL where both sides are paying $1.92. (1/1.92 + 1/1.92) x 100 – 100 = 4.16%. This is a relatively low bookie edge to overcome. This is why nearly all the bets we give out are line bets.
Eg. A H2H bet in the NRL. I’ve taken an example of this Thursday’s game between the Broncos and Bulldogs. Odds are $1.30 and $3.55 respectively. (1/1.30 + 1/3.55) x 100 – 100 = 5.09%. Generally H2H bets will have a slightly higher bookie edge than line bets, therefore we try to stick to line bets unless we can find an outlying value H2H price.
Eg. A futures bet on the NRL. A bit too long to type out but as an example I’ve taken the current Sportsbet odds to win the premiership and plugged it into the formula. The bookie edge comes out at 11.82%! This is a big reason why we say that futures markets are rarely value. Not only that, but it ties up your money that you could have spent better on other bets during the season.
Eg. A horse race. Once again too long to write out but I’ve taken a random race on Sportsbet (Morphettville R2, 12 runners) and plugged it into the formula. Not a surprise to us but what will be surprising to many punters is the bookie edge on this horse race came out at a whopping 27.71%. It’s no secret that horse racing has a much bigger bookie edge to overcome than sports. This is why we preach to basically never bet on horses if you’re trying to make money long term. It is also why we call BS on punters who tell us they make money betting on racing long term. A 27.71% edge is just too much to overcome, I don’t care how much you know about horse racing.
So there you have it. As a general rule, the more options a bet has (2 option line bet vs 12 option horse race) the higher the bookie edge. But it is also handy to know how to calculate it. So next time you’re making a bet, take a second and calculate the bookie edge on the market you’re betting. It might save you from making some bad bets and that means more money in your pocket.
Stay safe out there punters. TryPod.
August 1, 2018