Sportsbook margin and fair odds: the calculation

A fair coin at 2.00 / 2.00 implies 50% + 50% = 100%. At 1.90 / 1.90, it implies 105.26%. The extra 5.26 percentage points are the market's overround.

Margin creates a negative expected return for random betting even without better sportsbook predictions. Balanced exposure lets the sportsbook earn from its pricing.

Margin varies by market and time. Major liquid markets tend to be sharper; smaller markets and in-play prices often carry more margin.

1. 01

   Convert odds to probabilities

   For each outcome, calculate 1 / odds. Odds of 2.40 imply 41.67%; 3.30 imply 30.30%.

2. 02

   Add them up

   Add every outcome's implied probability from one sportsbook's market. A total above 100% indicates overround.

3. 03

   Subtract 100%

   The excess above 100% is the overround. A lower overround means a smaller built-in margin.

The margin calculator handles two- and three-way markets and shows no-vig odds.

The proportional method divides each implied probability by the market total, then converts it back into odds. These are no-vig odds, an adjusted market estimate rather than the true probabilities.

Proportional removal assumes evenly distributed margin. Favourite–longshot bias can make that assumption imperfect. Treat the result as a comparison tool.

• Compare sportsbooks. Different margins change the price you pay for the same market.
• Assess a price. A price above the no-vig estimate from a sharper market may indicate value or a delayed update.
• Understand arbitrage. When combined best prices imply less than 100%, their combined margin becomes negative.
• Kelly and expected value. These need a reliable probability estimate. No-vig odds are a reference point, not proof of an edge. Try the Kelly calculator.