Margin Adjustments in Sports Betting

Learn how to adjust margins in sports betting to set your own odds based on the data the Cloudbet B2B API supplies.

You can integrate the Cloudbet B2B API and set your own odds based on the data supplied, enabling you to carve out a profitable margin for each transaction. Alongside margins, you can also take control of and share liability from the individual bets that players or customers place through your platform.

Basic Implied Probability Calculation

The implied probability of an outcome is initially calculated from the given odds and the overround. For a specific betting market:

$$\tag*{(1)} \text{Implied Probability} = \frac{1}{\text{Odds} \times \text{Overround}}$$

This calculation gives a base probability adjusted for the bookmaker’s initial margin embedded within the odds.

Adjusting the Overround

To reflect changes in market conditions, event specifics, or risk assessments, the overround is adjusted by adding a margin percentage:

$$\tag*{(2)} \text{Adjusted Overround} = \text{Overround} + \text{Margin Percentage}$$

This formula ensures that the total market margin is adaptive and adjusts with the origin.

Recalculating Odds with Adjusted Overround

After adjusting the overround, new odds are recalculated as follows:

$$\tag*{(3)} \text{New Odds} = \frac{1}{\text{Implied Probability} \times \text{Adjusted Overround}}$$

This method of recalculating the odds maintains the relative value between different outcomes while adjusting the overall margin.

Example Calculation

If the initial odds for a team winning are 2.0 with an overround of 1.05, the implied probability is:

$$\text{Implied Probability} = \frac{1}{2.0 \times 1.05} = 0.4762$$

If the margin percentage is adjusted to 1.10, the new odds would be:

$$\text{New Odds} = \frac{1}{0.4762 \times 1.10} = 1.91$$

These recalculated odds reflect the adjusted margin and provide a new market price for the outcome.

Last modified May 31, 2024: add page on margining odds (3b035b5)