Whenever you see a bookmaker chalking up his prices, what he’s offering is very rarely reflective of the true odds because he always has to factor in a margin to cover his overheads. If the true odds of a 50/50 chance are 2.0 then bookmaker odds will usually include a margin on top.
For instance, on a two-horse race where both have equal chances, he would probably go 1.9 and 1.9 rather than 2.0 and 2.0. That equates to a probability of 52.63% for each selection, and added together the book is 105.3%. That’s his theoretical edge, which means he makes money regardless if there are equal bets on both options.
We call this additional percentage the overround and in this case it is 105.3%. This is a very important concept in betting. The overround is a clear and quick guide to how much value there is in any specific market. The bigger the overround, the further from the true odds the market in question.
Now imagine we have a four-horse race where all the runners have an equal chance of winning. This is how our on-course bookmaker has priced it up for himself in terms of the expected probability of each horse winning:
Horse | Odds | Percentage
A | 4.0 | 25%
B | 4.0 | 25%
C | 4.0 | 25%
D | 4.0 | 25%
This scenario is a round book because the percentages add up to 100%. It’s a perfectly fair market and if he took equal amounts on each selection then he would break even. If, however, he clipped each runners odds to 3.5, his book would be 114.3%. That means he’d now make a tidy profit if he accepts equal sums on each horse.
More complex overrounds
Often, though, the book won’t be so straightforward, which can make it a bit tricky to calculate the overround at first glance. For instance, you might see a four-horse race priced up like this:
Horse | Odds | Percentage
A | 2.1 | 47.62%
B | 3.25 | 30.77%
C | 5.0 | 20%
D | 9.0 | 11.11%
In this situation, the book is 109.5%, so the overround is 9.5%. This is a good value market and as a rough rule of thumb, anything below 110% will present a decent betting opportunity. The key thing to remember is that the lower the overround, the fairer the market.
If all these percentage calculations hurt your brain, this handy overround calculator does all the legwork for you. Simply punch in the odds for every selection (up to 15) and it spits out the overround.
You should be swerving markets with unbeatable overrounds. However, the back odds on liquid exchange markets will tend to hover just above 100%, while the lay odds will usually be just short of 100%. It means you’re able to back and lay very close to a selection’s true odds.
Working out Overrounds
Let’s look at an example where the match odds 10 minutes before kick-off for a Premier League clash between Leicester City and Newcastle United were as follows:
To calculate the overround in the back column it’s:
62.5% (Leicester) + 15.38% (Newcastle) + 22.47% (Draw) = 100.4%
Incidentally, the book in the lay column is 62.11% + 15.15% + 22.22% = 99.48%. A wafer-thin overround of .4% is as pretty close as it gets to a round book, so it’s safe to say you’re securing fair odds. Meanwhile, mid-way though the first half the total goals odds were as follows:
This time the book is 101.4% (44.25% + 57.14%). It’s a bigger overround than there was pre-match on this market, but this is usually a by-product of markets reacting to the action on the pitch. Again, 1.4% is still pretty good.
Overround or overbroke?
You can even have markets that are even more punter friendly. Although extremely rare, overbroke is the opposite of having an overround book. This is where the odds add up to less than 100%. For example, odds of 3.0, 4.0, 5.0, and 6.0 comes to 95%, which means you could back every selection and still be in profit regardless of which selection goes onto win.
So the next time you are considering a bet, checking the overround will immediately indicate whether the odds on offer are fair and close to the true price. Always try to bet where you’re getting as close to a 100% book as possible.