If you’re experienced with betting against bookmakers, you’ve likely heard the term "hold," "vigorish" (or "vig"), or "margin." These terms refer to the same thing: the bookmaker's cut or built-in advantage. Understanding how bookmakers make their money is crucial for anyone interested in sports betting, as it helps you make more informed decisions. In this article, we’ll break down what hold is, how it works, and why it matters to your betting strategy.
What is Hold?
Hold, or vigorish, is essentially the bookmaker’s profit margin. When you place a bet, the odds are designed not only to reflect the probability of each outcome but also to ensure that the bookmaker makes a profit regardless of the outcome. The hold represents the percentage of money that the bookmaker expects to keep from the total amount wagered.
How Does Hold Work?
Bookmakers achieve hold by adjusting the odds. Let’s look at a simple example of a two-outcome event like a tennis match. Imagine two players, Player A and Player B, are evenly matched, meaning each has a 50% chance of winning.
In a world where the person taking bets on this match was not looking to make a profit and wanted to show the true likelihood of each outcome, the odds would be 2.00 (even money) for both players. This would mean the market percentage is 100% and would be referred to as a “no hold” market.
However, bookmakers are interested in making a profit! If a bookmaker offers odds of 1.91 for both outcomes instead of 2.00, they are building in a margin, or hold. Here’s how that works:
- Fair odds: 50% chance of winning for both Player A and Player B, with odds of 2.00 for both sides. The market percentage here is 100%.
- Bookmaker's odds: They offer 1.91 for both Player A and Player B, reducing your payout. The market percentage here is 104.71%.
The bookmaker’s hold is calculated as:
Hold = (1 / Odds A + 1 / Odds B) - 1
For this example:
Hold = (1 / 1.91 + 1 / 1.91) - 1 = 1.047 - 1 = 4.71%
So, the bookmaker's hold is 4.71%, meaning that they expect to keep 4.71% of all the money wagered on this market.
Why Do Bookmakers Need Hold?
Bookmakers are businesses, and just like any other business, they need to make a profit. Hold is their way of ensuring they make money regardless of the outcome of the event. By setting odds that include a margin, they balance the amount of money they receive for each outcome, reducing the risk of losing money when they pay out to winning bettors.
If a bookmaker receives too many bets on one side of a market, they can shorten the price on that side to reduce potential liability and protect their profitability. By lowering the odds, they make that outcome less attractive, encouraging bets on the other side of the market, which helps balance their book and ensures more consistent profits regardless of the result. The hold remains the most important tool to balance profitability in a market however.
In essence, hold protects the bookmaker from variance in results. Even if a few big bets win, over the long term, the margin ensures they stay profitable.
How Hold Affects Your Betting:
Understanding hold is crucial because it affects your potential returns. The higher the hold, the lower your potential profit. Bookmakers with a higher margin offer less value to the bettor, meaning it’s harder for you to win in the long run. That’s why savvy bettors often shop around for the best odds or use low-margin bookmakers to improve their chances of profitability.
Let’s take an example of two different bookmakers, using a hypothetical example:
- Bookmaker A offers odds of 1.91 on a two-outcome event.
- Bookmaker B offers odds of 1.95 on the same event.
At first glance, the difference seems small, but over time, that small difference can impact your long-term success. In this case, Bookmaker B offers better value because their hold is lower, meaning they take a smaller cut from the total wagers.
How to Calculate Hold:
You can easily calculate hold for any market using a simple formula. For events with multiple outcomes, the formula is:
Hold = (1 / Odds A + 1 / Odds B + ... + 1 / Odds N) - 1
Where Odds A, B, and N are the odds for each possible outcome.
Let’s say Bookmaker A offers the following odds for a football match:
- Team A: 2.30
- Draw: 3.10
- Team B: 2.50
To calculate the hold:
Hold = (1 / 2.30 + 1 / 3.10 + 1 / 2.50) - 1
Hold = (0.4348 + 0.3226 + 0.4000) - 1 = 1.1574 - 1 = 15.74%
In this case, the bookmaker’s margin is 15.74%, which is quite high.
Reducing the Impact of Hold:
While you can’t avoid hold entirely, there are a few ways to reduce its impact:
1. Shop for better odds: Always compare the odds from different bookmakers available to you to find the best value for your bet. This helps you minimize the margin you’re betting against.
2. Use exchange betting: Betting exchanges often have lower margins because they match bettors against each other, taking only a small commission on winnings.
3. Avoid exotic markets: Betting on simple markets (like match winners) often has lower margins compared to more exotic bets (like correct score or player props).
By understanding how hold works and how it affects your bets, you can make smarter betting decisions. Always look for the best odds and be aware of the bookmaker’s margin to ensure you’re getting the most value for your wagers. Ultimately, reducing the impact of hold is key to long-term betting success.