It’s a word that seems familiar but is actually unknown. I have a vague idea of what it means, but I get stuck when I’m asked to explain it to a friend… The margin (house edge) in betting is basically the price you pay to the bookmaker to take the risk of placing a bet. *Think of it as a fee for playing.* Of course, the more you pay, the less you will ultimately win. There are also bookmakers that offer zero margin betting, where you can basically bet for free. However, with zero margin, you honestly can’t expect your bankroll to increase or decrease.

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**Coin Toss Example**

To make it easier to understand, let’s take a coin toss as an example. The options for the outcome of a coin toss are heads or tails. The chances of the outcome are 50:50, meaning that both have the same chance of winning. If this is a fair game (no margin), the odds are expressed as 1/1 in fractional form and 2.00 in decimal form. The probability of the outcome refers to one coin toss. And since the probability of heads or tails is equal in this one coin toss, both have a probability (p) of 0.5. If you bet this with a friend, there is no house edge (margin). You get $100 for every $100 you bet. And the important point is that if you have a sample of 1,000 coin tosses, the two of you will make roughly the same profit. However, bookmakers have to balance the cost with commission because they have to bear the burden for all possible options. And to keep the balance with the margin, they adjust the odds to make sure that less popular options are bet on. Continuing with the coin toss example, a fair game (zero margin) would have odds of 2.00, but the bookmaker is more likely to offer 1.90. So if you bet $100 on heads and $100 on tails, you are guaranteed a profit of $10 ($100 for the loser minus $90 for the winner). *This $10 is the bookmaker’s margin. In a zero margin bet, the winner gets $100 and the bookmaker makes nothing. In other words: 1.90 / 1.90 = 52.63% + 52.63% = 105.26% whereas 2.00 / 2.00 = 50% + 50% = 100% Here’s how to actually calculate the margin:*

**How margins are calculated**

But in the world of betting, there are very few outcomes that are as binary as a coin toss. For example, even a 1×2 win/lose bet on a soccer match outcome must take into account the possibility of a draw. When looking at a match between two soccer teams, the odds are determined by many different factors, such as head-to-head records, home and away, home and away records of each team, are there any injuries, who is out of form, are there any players who have just returned from injury, etc. This is why bookmakers handicap the game, and these factors form the odds they ultimately offer. *The higher the margin, the more you pay to play, and the lower the margin, the less you pay to play, so you are not being unfairly taken for a flat rate. Remember, you end up with more money in your pocket.* Below are some examples of Cloudbet odds for the opening game of the Premier League. As we explained earlier, bookmakers change their odds as they get closer to kick-off in order to balance their profits. *However, these numbers are just an indicator for the purposes of this explanation. * The main full time result odds are: Aston Villa: 3.36 Draw: 3.31 Sheffield United: 2.30

Dividing each odds by our breakeven level of 100 gives us: 100 ÷ 3.36 = 29.76 100 ÷ 3.31 = 30.21 100 ÷ 2.30 = 43.47 Adding these together gives us the total probability: 29.76 + 30.21 + 43.47 = 103.44 Above 100, the margin on this **bet is 3.44%** . Let’s see what would happen if we had a zero margin. Here are some examples of odds that Cloudbet will be offering during the promotion: Aston Villa: 3.49 Draw: 3.42 Sheffield United: 2.36<0> </0> Using the same formulas as above: 100 ÷ 3.49 = 28.65 100 ÷ 2.36 = 42.37 100 ÷ 3.42 = 29.23 That is: 28.65 + 42.37 + 29.23 = **100.25** .

**Roulette and the House Edge**

The house never loses. The more you play in a casino, the more you understand this fact. In fact, the house always has the advantage in the long run. Roulette is the clearest example of this. If you have ever bet on black, you will know that your payout is 100% if you win (if you bet $1000 on black, you will get $1000). So the odds are 50/50. But don’t forget about the “0”. The only square with the 0 is green. This means that you are reducing the chances of winning a straight bet on red and black by 1/37, or 2.7%. *This is the house edge.* By offering zero margin betting, Cloudbet is essentially eliminating the house edge that would normally be there. In other words, think of it as playing roulette with a wheel without a “0”.

**The Importance of Margins**

Margins are important if you want to play long term and protect your bankroll at sportsbooks. Don’t forget, margins are what you have to pay to play. But why pay 500 yen at this store when you can buy milk for 200 yen at the store next door? Milk? You may be thinking, but this means that the margins vary dramatically from bookmaker to bookmaker. Cloudbet has a track record of offering the best odds in sportsbooks and eSports markets , with margins typically between 2% and 3%. Some other sportsbooks have margins of 7-8% or even more. There you have it. Sign up now and enjoy Cloudbet’s best odds!