How the margin is spread across the odds
The higher the odds, the more they are cut. Outcomes at 1.30–1.50 come out almost level (−0.4%), while those at 10 and above end at −21.7%. It is a long-known effect, the favourite-longshot bias: people are more willing to overpay for a small chance of a big win, and bookmakers build more margin into long odds.
| Odds | Bets | Won | Implied by the odds | Result |
|---|---|---|---|---|
| 1.00–1.30 | 2,193 | 81.5% | 83.1% | −1.9% |
| 1.30–1.50 | 4,163 | 71.3% | 71.6% | −0.4% |
| 1.50–1.80 | 8,776 | 59.0% | 60.6% | −2.6% |
| 1.80–2.20 | 13,368 | 47.9% | 50.2% | −4.7% |
| 2.20–3.00 | 25,671 | 36.8% | 38.8% | −4.9% |
| 3.00–4.00 | 46,436 | 27.5% | 29.3% | −5.9% |
| 4.00–6.00 | 20,247 | 18.8% | 21.4% | −12.3% |
| 6.00–10.00 | 6,853 | 11.2% | 13.8% | −19.0% |
| 10+ | 2,157 | 5.9% | 7.6% | −21.7% |
So should you just back favourites?
No. Backing the favourite in every match wins 51.0% of the time, but the result is still −4.1%. Even in the best range (1.30–1.50) the margin eats everything the market's rare mistakes give. Favourites lose less than underdogs — but they still lose.
We also tested a bet on our model's pick in every match — that is how the model runs the “flat stake” live in Premium. Its pick came in 49.9% of matches, but the result at the average price is −4.7%, and at the best price on the market −0.6%. The model is often right, but the odds on its picks already take the same things into account.
Favourites in hockey and basketball
The picture is the same: in hockey backing the favourite gave −4.3% and the underdog −10.5% while in basketball −4.9% and −8.1%. Here too the bookmaker earns most on underdogs.
| Sport | Favourite: won | Favourite: result | Underdog: won | Underdog: result |
|---|---|---|---|---|
| Football | 51.0% | −4.1% | 21.9% | −10.1% |
| Hockey | 65.0% | −4.3% | 35.0% | −10.5% |
| Basketball | 68.8% | −4.9% | 31.2% | −8.1% |
The bottom line
- The margin is smaller on favourites and biggest on underdogs and long shots.
- The simple rule “back the favourite” still loses: there is no edge over the market in it.
- Betting at long odds needs an especially accurate estimate of the chance: that is where the margin is biggest.