A price on an outcome is not a clean probability estimate but an estimate with a margin added. That margin creates the book's theoretical hold and is the reason the odds on offer, taken together, describe slightly more than one hundred per cent of the event's outcomes.
How the margin enters the odds
Trading first builds an estimate of outcome probabilities, then converts it into odds and shortens them relative to the fair level. Add up the inverse of every published price and the sum will exceed one — that excess is the margin built in. It need not be spread evenly across outcomes: the less likely selections usually carry a larger share of it.
Why the figure is not constant
Margin size is a managed parameter and moves with market conditions:
- quality of information — pricing on popular leagues is more accurate, so less buffer is required;
- number of outcomes — the longer the market, the higher the uncertainty and the margin;
- stage of the event — in-play data updates fast, and the price of risk rises with it;
- competition and regulation — on mature licensed markets prices are noticeably tighter.
Theoretical margin is not profit
The margin priced in is realised in full only when stakes are spread evenly across outcomes. In practice money lands unevenly, part of turnover goes to bonuses, early settlements and voided bets, and some markets levy a turnover tax. The share actually retained therefore differs from the theoretical one — in either direction.
Judging a book by a single number derived from its prices is meaningless for that reason: theoretical margin describes intent, not outcome.