In my previous posts, I described how to calculate the bookmaker’s margin — the fraction of money placed with bookmakers that they retain on average. For this calculation to be correct, the odds have to satisfy a very specific assumption (strong betting market efficiency) but at least under that assumption, you can calculate the margin.
There are lots of resources on the internet that offer to do this calculation for you. I said in my previous post that about half of them did it wrong but that wasn’t based on a rigorous check.
So, let’s do a consumer report on this. The US sports betting market is huge and has lots of new bettors asking how things work, so it has the most sites offering to do the calculation. In US betting terminology the question being asked is “How do you calculate the sportsbook’s hold percentage?”
A Google search for this question produced nine options on the first page. Let’s see how they did.
Here is my consumer report test. We are going to assume the bookmaker offers the US-standard -110 bet: You bet $110 to win $100, equivalent to decimal odds of 1.909. In that case, the correct calculation of the bookmaker’s margin is 4.55%. For every $100 placed with them, they will on average over time earn a profit of $4.55. But if you do the calculation incorrectly — just calculating the sum of the the inverse decimal odds and subtracting one — then you will get 4.76%.
Here is what I found on the 9 sites on the front page (understand that what you see on the front page from that request might differ a bit from what I got.)
1. Action Network
First site. And we are off to a good start. Action Network nails it. But it would have been nice to have more than two potential outcomes.
2. Unabated
Unsurprisingly, Unabated’s calculator is correct. Exactly what you would expect from a site founded by Captain Jack and Rufus Peabody. And extra brownie points for allowing you to put in more than two odds.
3. NFElo
Our first fail. I’m sure their NFL power rankings are great but don’t use their hold calculator. And let’s be clear, there may be some wiggle room on “the implied probabilities are 4.76% greater than one” but they explicitly say “The sportsbook keeps 4.76% of all money wagered as profit” which is incorrect.
4. OddsJam
A surprisingly weak entry from a company with a huge consumer following.
5. Karl Whelan
No style points whatsoever. A WordPress blog post with links to old-style Excel sheets that you download. Some kind of teach-a-bettor-how-to-fish nonsense. But at least it is correct and let’s you put in more than two odds.
6. TopEnd Sports
Another fail. 4.76%. But at least it can also give the incorrect answer for 3-way markets.
7. OddsShark
This one gives the correct answer. Shark beats the jam! But loses a point for no option to enter more than two odds.
8. Pinnacle
Well this — this — is a shocker. The world’s sharpest betting company with an educational resource that gives the wrong answer to the most basic question you could ask. Clearly, they did not put their finest minds on this project. And I know this is being super picky, but the correct overround to three digits is 1.0476, so even the wrong answer should 4.76% not 4.77%. Again, at least you can also get a wrong answer for a three-way market as well.
9. Hold-Calculator.com
You know what Hold-Calculator.com? You had one job. And you failed.
I don’t recommend showing your friends.
Recap
The results are in and they are not pretty. Keeping my own site out of it, the list is as follows.
So, some people on the internet are wrong. Big deal, right? But remember that that many of these sites get huge visitor numbers every day and provide advice on all sorts of topics, like which teams to pick in today’s games or which prop bets offer the best value. If they can’t get this basic question right, why would you trust any of their other advice?