How to Calculate Bookmaker Compensation
June 9, 2023

Sports betting is a lucrative business for bookmakers, and that’s obvious with the number of them operating today. After all, they make money with every bet, whether you win or lose.

That’s why knowing how to calculate a bookmaker’s commission is so important. It can help you pick the right bookmaker for the best odds at making a profit.

So we’re here to simplify this essential process so you can get better deals on your  betting.

Why do you need to know about a bookmaker’s commission?

At first glance, knowing how much a bookmaker gets in commission might seem useless. It’s a given that they have to make their money somehow, so a commission is the best way to do so.

But if you want to maximize your chances while still having fun, knowing how much a bookie gets per bet can make a world of difference. Not all bookies take the same commission, so it’s always best to check different ones before placing a bet.

How does the bookmaker commission affect your bet?

Bookies make their money by taking a portion of your winnings every time they pay out or charging you that fee if you lose. That means the higher their commission, the more money you lose.

For example, a 5 percent commission on a $250 bet with a 1.92 odds means the bookie will get $11.50 from you. The higher you bet, the more they earn.

Let us show you how we arrived at those numbers.

How is a bookmaker’s commission calculated?

To calculate a bookmaker’s commission, you need three things: your stake, the odds, and the bookie’s commission rate. Reputable bookmakers publish their commission percentage rate per betting event, so it’s helpful to make a list of potential bookies before committing to one.

Once you have those figures, follow this formula:

((Your stake x Odds) – Your stake) x Commission Rate

Let’s use our example from earlier, with a stake of $250:

Commission = (($250 x 1.92) – $250) x 0.05

Commission = ($480 – $250) x 0.05

Commission = $230 x 0.05

Commission = $11.50

The formula above is how we figured out that at a 5 percent commission rate and a stake of $250 with 1.92 odds, the bookmaker earns $11.50 from you. And if you’re diligent enough to shop around for the best odds and commission rates, you’ll find the best bookkeeper to bet with after running the numbers.

Of course, doing that by hand one at a time is time-consuming. That’s why several free online tools are out there to help you calculate those commissions. Some tools can accommodate different odds formats, such as decimals and fractions.

You know how much a bookmaker gets per bet, now what?

Now that you know how to calculate bookmaker commissions and how to do multiple ones efficiently, it’s time to pick a bookkeeper. Some bookies offer a flat commission rate throughout all betting lines, while others publish a rate and stick with it. Others try to make it more enticing by balancing your rate against the market.

Once you’ve considered the numbers and other special offers, you’re well on your way to becoming a savvy bettor.