Betting Guide » Online Betting Tutorial
Bookmakers Overround
Understanding how the Bookmakers Overround works
The Bookmakers Overround is a term which isn’t expressed a lot, but is important for all punters to understand and appreciate. It is a key indicator as to the profit potential of the market you intend betting in and the higher the overround figure, the higher the advantage is to the bookmaker. Bookmakers quote their odds based on the probability of winning, but every market a bookmaker offers will contain a margin to enable the bookie to make a profit.
To help you understand what the bookmakers overround is, imagine if you were being offered odds of $6.00 by a bookmaker for picking the correct number on the throw of a dice. As there are six sides on a dice you would have a 1 in 6 chance of winning, or 0.1667 (16.67%). Mathematically the probability of winning is 1.00, or 100%, which is calculated by 6 x 0.1667. Because the bookmaker is offering odds of $6.00 this market would be regarded as a round book and the bookmakers profit margin would be 0%.
Now consider the bookmaker reduces the odds to $5.00 for you picking the correct number on the throw of a dice. The bookmaker will of now gained an edge over you because as you can see, it is now an unfair market. The sum of picking the correct number of the dice is now 0.20, so the probability of winning is now an extra 3.3% (0.20 – 0.1667) higher than the true mathematical chance of picking the correct number on the dice. The overround on this market would be 120%, or 6 x 0.20, and this difference means the bookmakers profit margin would be 20%.
By now, its pretty clear that the higher the overround figure, the higher the advantage is to the bookmaker. In the second example we see the bookmaker has an overround percentage of 20%, which means the bookie has set his odds to make a 20% profit on all stakes taken from each bet, no matter who wins! This assumption assumes that actual stakes of bets placed will fall in line with his expectations.
Although this example only shows the probability’s on the throw of a dice, the same concept works for any other market a bookmaker offers. Whether it be Soccer which has 3 outcomes, Basketball which has 2 outcomes, Horse Racing which can have several outcomes, or even the Brownlow Medal betting market where there can be up to 500 outcomes early in the season. All these markets will contain different bookmaker overrounds, but when using an odds comparison tool it will be easy to see which bookmakers have the fairer market.
All the above information should indicate to you how important it is to understand how the bookmaker overround works, and that you could enhance your profit potential by betting with bookies that have lower overrounds.
