How is commission calculated?
You can calculate how much commission you will be charged by Smarkets with the following equation:
Commission charged = ((stake * odds) - stake) * commission rate
We can use a tennis match between Novak Djokovic (1.20) and Roger Federer (5.50) to work out how much commission you will pay.
You may assume your return from a 1,000 kr bet on Djokovic to win would be 1,200 kr (1.20 * 1,000 kr). This doesn’t however, incorporate the 2% betting commission if you win your bet.
Using the calculation above and Smarkets’s industry-low 2% commission your return for a 1,000 kr bet on Djokovic at 1.20 can be calculated as:
So in our example, if Djokovic had won you would be charged 4 kr total commission on your bet, meaning your profit would be 196.0 kr and your return would be 1,196.0 kr (including stake).
Now you understand how commission is calculated, learn how higher commission rates or bookmaker margins impact your return.