What is Overround Betting?

Overround betting naturally occurs in any sports betting market. Whether it is a horse race, a Premier League match or the Six Nations, all markets have this “hidden” profit margin worked into them.

As long as betting has been around, bookmakers have utilised their advantage of being able to set odds to their means. 

For example, the probability of all possible outcomes never adds up to an even 100% book on a three-way football outright market. Instead, it will be 105% or 110%, which is the overround.

What is Betting Overround?

At a sportsbook, you are playing by the bookmaker’s rules. They wield the power of setting odds to set margins they want. Why is this important to a bettor? It’s worth understanding because it helps assess the value of odds, as it indicates fair payouts.

The closer the number is to the “book”, a term used for a 100% balance in market probability, the better. As a rule of thumb, any sports betting market with an overround of above 110% is not worth touching for value.

Different markets have different overround values. More heavily bet-on markets tend to have a lower overround, as bookmakers will push up margins on less frequented ones to try to eke out as much value from lower volumes of stake.

For an Arsenal vs Newcastle Premier League match in 2024, the game outright odds looked like this:

Arsenal – 1.36

Draw – 5.25

Newcastle – 8.0

That equated to a 105% overround on the market and a 5% bookmaker profit margin, which is fair value. However, looking at the Double Chance market, the overround jumped to a massive 223%, showing a weak market.

How to Calculate the Overround

A simple online calculator is the quickest way to figure out the overround. Enter the odds from the market and the overround is calculated immediately.

But it’s worth looking at the maths behind the overround to gauge and understand what is happening.

The overround is based on implied probability, the cornerstone of odds. 4.0 odds have a 25% probability of happening, compared to a 50% implied probability at Even Money (2.0).

Converting those odds above to probability, we see: 

Arsenal – 73.5% (1.36)

Draw – 19% (5.25)

Newcastle – 12.5% (8.0)

73.5 + 19% + 12.5% = 105%

The explanation is that the “book” starts at 100%, as compilers and traders assess probability. The bookmaker then manipulates that starting base by increasing the likelihood of each option.

That shifts the profit margins in their favour, with five units of profit for every 100 staked. So even if favourites Arsenal did win, the bookie would be taking an extra cut on the increased 

margins on losing Draw and Newcastle bets.

A quick equation…

The simple equation to convert odds to probability is the following:

Probability = 1/(Decimal Odds)

In the case of Arsenal at 1.36, it would therefore be: 

1/1.36 = 0.73

0.73 * 100 = 73% probability

How Important is the Overround in Betting?

The overround is crucial as it depicts value when comparing odds. The higher the overround, the more the bookmaker manipulated the market through inflation and the further away from a fair odds quote. So lower margins indicated a much closer line to a fair book, and that’s the best position to be in.

Comparing Overround Across Bookmakers in the UK

How can you find the best overround? Simply by comparing odds on the same market at different bookmakers. Look online for an odds comparison tool to speed up the process.

Here are some examples of how much margins differ between bookies from a 2024 Test 

Match between India and England.

Bet365: India 1.44, England 3.75, Draw 10 – 106.11% overround

Sky Bet: India 1.44, England 3.5, Draw 10 – 108% overround

BetVictor: India 1.44, England 3.4, Draw 10 – 109% overround

Bet365 were the clear winner in the race with a lower 6.11% profit margin. But you can also see that the comparative odds of India winning were the same at each site. 

So ultimately, unless you were backing England from that market, where the most significant shifts were happening, the overround wouldn’t matter so much because of other options being an industry-standard quote.

Overround in Different Types of Bets

How you bet will also have a bearing on the total overround. When building bigger, more complicated bets like a racing Lucky 15 or a five-fold acca, the cumulative overround will increase.

It still matters on the individual selections you put into those bets, but not so much cumulatively. All it means is that the bookmaker is running a significantly larger overround as they compound their profit margins through multi-bets.

Bayern Munich – 1.35

Draw – 5.5

Lazio – 9.5

Overround = 102.78%, profit margin 2.78%

For simplicity, let’s assume three more matches with the same overround were added into four-fold acca. The overround is now quadrupled (2.78% + 2.78% + 2.78% + 2.78% = 11.12). 

Overround & Betting Exchanges

Does the overround apply in betting exchanges? No, because it is a very different set-up to traditional betting odds. A betting exchange does not have direct input in the odds, so they have no profit margins.

Because the exchange is peer-to-peer betting, meaning different punters have to take on each side of a bet for it to become active, you can typically find better odds than at traditional bookmakers.

If you saw a quote of Bayern Munich 1.35 at a bookmaker and the exact quote at an exchange, the latter could have better value as it is overround. However, it is only a “could” because if the bet wins on the exchange, you will have to pay a commission.

Could that commission be the same as the bookmaker margin on the market? Yes. Could it be more? Yes. Even with exchanges, fully assess every cost of placing the bet. 

Legal & Regulatory Aspects of Overround

The overround is legal, and it’s just an element of betting. 

Part of the Gambling Commission’s overseeing powers is ensuring bookmakers offer fair play. They maintain the integrity of the opportunities provided through betting markets, which are fair to the player, and that there is no manipulation in the outcomes of markets. 

There is a constant monitoring process for bookmakers to ensure they comply with regulations, which is a big reason only to use licensed sites.