The Bookmakers overround put simply is the bookmaker’s edge its an amount of profit usually expressed as a percentage that they can achieve on a betting market regardless of the result.
The market type and other factors can affect the overround from bookmaker to bookmaker but there is always an overround for every betting market in the UK and Ireland.
You never meet a broke bookie do you there is a reason for that, their business model is a tried and tested method that if done right can ensure they are able to make a living by providing a service to punters.
How Bookmakers Make Money
Ok so now you know what it is let’s explain how it works in the bookmakers favour overall with an example below.
There is a football fixture where Man City take on Man United and on the 1×2 betting market, the home side being Man City and the away side their rivals Man United.
Say the bookmaker feels the approximate probabilities for the full-time result are 40% for Manchester City to win, 30% for the game to end in a draw, and 30% for United to return to Old Trafford with three points for the win.
The odds presented by the bookmaker are 7/5 for 1 (home win), 11/5 for X (draw), and 12/5 for 2 (away win). Let’s look at those odds in a bit more detail. In the UK and Ireland fractional odds are used, whilst in Europe, the familiar format is decimal odds and with both, there is an associated implied probability.
For the odds quoted the model looks like this: 1 (home win) = 7/5 (fractional odds) | 2.40 (decimal odds) | 41.67% Implied probability X (draw) = 11/5 | 3.20 | 31.25% 2 (away win) = 12/5 | 3.40 | 29.41%
Then let’s add up the total implied probability for the three possible outcomes of the game: 41.67% + 31.25% + 29.41% = 102.33% The numbers (prices or odds) and their associated implied probabilities provide the bookmaker in this instance with an overround of 2.33%, which guarantees the bookmaker a profit, regardless of the final score in that tasty Manchester City vs Manchester United fixture.
They have been able to offer ‘good odds’ or a good price for the punter on the away win as they took in enough cash on the other selections.
As you can see on an example from the Attheraces website above the bookmakers overround was 105.52% meaning regardless of the result the bookmaker will make 5.52% on all bets placed with them.
Consider Accumulators And Multiples Overround
In the example above of the 2.33% overround from the 1X2 Man City vs Man Utd bet you might think that is not much of a profit margin for the bookmaker.
Given the hundreds of thousands or even millions of bets taken by the bookmaker each year those profits start to add up.
Indeed, bookmakers can also compound their profit margins by offering multiple bets such as doubles, trebles, Lucky 15, or even bigger football accumulators.
Say they offer similar 1X2 odds on two football matches the bets become doubles for the punter (who has to predict correctly the outcome of two games) and the profit margin doubles 2.33% + 2.33% = 4.66%.
If it’s a five match accumulator those overround figures grow to 2.33% + 2.33% + 2.33% + 2.33% + 2.33% = 11.65%.
Bookmakers make much more money on multiple bets because the odds are increased meaning you are less likely to get all the results correct, which means the bookie gets your money.
Summary – The bookie always wins
Know that you understand what the bookmakers overround is you can see why the bookie always wins in the long run, they can literally make a profit from any sporting market they choose.
There are occasions where they can be caught out with massive odds bets though so if you were wondering how to become a bookmaker you always need to make sure you have enough money to payout should the worst-case scenario occur (and it does more often than you would think).
Bookmakers can also limit the accounts of punters that are ultra-successful, something that we don’t think is fair but it does happen very often to punters why should a bookmaker limit your account meaning you can bet when they can take your money all day long.