How big is the cut across the whole industry?

Every bookmaker on earth takes a cut. That part is universal, and nobody seriously disputes it. What is not universal is the size of it, and the gap between the cheapest and the most expensive version of the exact same bet is bigger than most people betting into it would guess.

The same bet, three prices

Pinnacle, widely regarded as the most accurately priced book in the world, commonly quotes an even match at odds of -105 on both sides. Convert that: each side pays out $100 on a $105 stake, so each implied chance is 105 ÷ 205 = 51.2%. Add the two sides together and the market totals 102.4%. The cut is 2.4%.

TAB is not that book. We captured its entire sports board in one pass, 146,956 prices, and measured a median cut of 7.2% across every market where the arithmetic is unambiguous. The full breakdown, sport by sport, is here.

And the regulated US market, the biggest legal sports betting market on earth, just posted its highest number yet. For the whole of 2025, operators kept 10.1% of everything wagered, the first calendar year that figure passed 10%. The current quarter is tracking at 11.6%, a new high. Before 2018, when Nevada was effectively the only legal book in the country, that same number sat at about 5%.

Three prices on the same kind of bet, and the most expensive is nearly five times the cheapest.

Why the US number keeps climbing

It is tempting to read a rising national number as bookmakers quietly widening every single price. That is not what is happening. The price on a plain moneyline has not moved much at all. What has changed is what people are actually betting.

A same-game or multi-game combination, a parlay, does not add its cut once. It multiplies it, once per leg. If a book prices each leg at a 7% cut, the combined market total is not 107%, it is 1.07 raised to the power of however many legs you strung together:

• Two legs: 1.07² = 114.5%, a cut of 14.5%
• Three legs: 1.07³ = 122.5%, a cut of 22.5%
• Four legs: 1.07⁴ = 131.1%, a cut of 31.1%

That is the same 7% price on every individual leg, compounding into a very different number once you combine them. It is why one operator's own disclosures show parlays now make up well over half its business in some states, and a much larger share of its revenue than of its bets. The national number has not risen because pricing got worse. It has risen because more of the money now flows through bets where the cut compounds.

The other half of risk management: what the book does about you

Everything above is the industry managing its own risk on the pricing side. There is a second side to it, and it is worth knowing about before you ever think about your own.

DraftKings puts it plainly in its own annual filing to regulators: "It is customary for sports betting operators to manage customer betting limits at the individual level to manage enterprise risk levels." In practice, that means a book will quietly cut the maximum stake, or close the account outright, for a customer who keeps finding the wrong prices. It happens on individual markets first, usually props, before it spreads further, and books rarely tell a customer why.

This is not a scandal either, it follows directly from the arithmetic above. A book cannot separate "a customer with a real edge" from "a customer who just got lucky" any faster than you can separate a good process from a lucky run. Restricting the account is the book's version of managing that same uncertainty, and it means a real edge does not get an unlimited amount of time or stake to prove itself. That is one more reason the question this site keeps coming back to, whether the price you took moved in your favour before the event started, matters: it is the fastest honest answer to "is this working", and it is the same evidence a book is watching from the other side of the same bet.

Where this leaves TAB, specifically

None of this tells you anything about TAB. It tells you where 7.2% sits: above the cheapest book in the world by three times, and below where the biggest regulated market on earth has climbed to. It is neither the best price available anywhere, nor is it unusually harsh. It is a real cut, measured, sitting in the middle of a wide range.

Two things follow from here, and this site covers both.

Knowing the size of the cut tells you the size of the hole any edge has to climb out of. It does not tell you whether a specific price is wrong. What positive expected value betting is covers how that judgement actually gets made, using nothing more exotic than a coin.

And finding a genuine edge is only half the job. The formula for how much of a bankroll to put behind one has its own history, worked out at Bell Labs in 1956 and taken into casinos by Ed Thorp six years later, long before it ever touched a sportsbook. How much should you actually stake covers what that formula says, and what happens when you ignore it.

The honest caveats

Two numbers in this article measure different things, on purpose. TAB's 7.2% is a margin: what its prices imply it should keep, in theory, before a single bet is settled. The US market's 10.1% is a result: what operators actually kept, in practice, after every bet was paid out. The two are related but not identical, and the gap between them is mostly the parlay mix explained above, plus the ordinary noise of real outcomes landing slightly differently to their priced probabilities over any given stretch.

The Pinnacle figure is a commonly cited price on an even match, not a guaranteed number on every market that book prices. And market size and national hold figures are contested by definition: some measure everything wagered, others measure only what is kept after paying winners, and the totals you will see quoted elsewhere can differ by a factor of two depending on which one a source means.

Happy betting, Seb

Why a New Zealander ended up measuring all this is on the why page.