Bookmaker Margin Overround Explained: How to Calculate It in Seconds
A “fair” betting market would offer odds equivalent to the exact probability of each outcome. But that would let the bettor break even, so the bookmaker has to build in a margin - and that margin can be…
What Overround Is
Overround is the combined total of the implied probabilities priced in by the bookmaker across all the outcomes in a single market.
In a fair market with no bookmaker’s margin, the total implied probability would be exactly 100%. In a real market, it is always above 100%. The difference between the two numbers is the built-in margin.
One simple way of remembering that: "Overround is just the fancy betting name for margin. It tells you how much the bookie is building into its odds to guarantee profit."
How to Calculate It in Seconds
To calculate the overround, use this basic arithmetic.
The math is: \
For a simple example, imagine three decimal probabilities of.
1 / 1.40 = 0.7142 (implied percentage of 71.42%) 1 / 3.20 = 0.3125 (implied percentage of 31.25%) 1 / 12.00 = 0.0833 (implied percentage of 8.33%)
Total: 71.42% + 31.25% + 8.33% = 111%
The overround is 111 - 100 = 11%
If you know just that 1%, you know a betting market gives back 99% of the pool and builds in a 1% margin for every pound bet
The Formula in Action
In 2021, published an illustration of a betting market after the match started.
Let's use their example:
``` Team A 8.5 (-2.5) Draw 25.0 (-1.25) Team B -85.5 (2.5) ```
The overround is
So that is a -
That means.
How Calculators Handle Different Odds Formats
The same overround calculations can be used on markets priced in decimal, American or fractional odds. The bookie odds conversion calculator allows conversion between these odds formats.
This means you can apply the formula to any market you are analysing, regardless of the format it uses.
What the Article Can't Answer
The reader may want to know the mechanism for setting the initial prices,