Betting is full of jargon and much of it can appear intimidating or confusing to the newcomer. One piece of jargon you may have come across is the overround. This is often used to describe individual betting markets and quoted in percentage terms. But what exactly is meant by the word overround? Read our handy guide to find out more.
Meet the Overround
Put simply, the overround is the bookmaker’s edge in any particular market. Let’s take a simple example. Imagine a bookmaker were offering a market on the identity of the next card to be pulled at random from a pack of cards. The true odds for picking an individual card from a standard deck are 51/1, which equates to a probability of 0.0192 or 1.92%. Adding all 52 individual probabilities together totals 100%, which is as you would expect.
In order to make a profit from this market, the bookmaker would reduce the odds offered on each card, for example to 48/1. The associated probability of a 48/1 bet is 0.0204 or 2.04% and adding these 52 individual probabilities together results in a total probability of 106.1%. The difference between this figure and the true odds of 100% is known as the overround.
Overround and the profit margin
The total sum of probabilities represented by the odds in any given market is known as the bookie’s ‘book’ and any book in which the probabilities add up to more than 100% is said to be overround. In the example above, the overround is 106.1% or 1.061 in decimal terms, which has specific implications for the bookmaker’s profit. For every £100 bet on that market, the bookmaker can expect to make £6.10, or a profit of 6.1% on turnover.
Betting with the Overround
In the example using a deck of cards, it is possible to establish the true odds, as it is with most casino games, but with sports betting things are more complicated. There are thousands of factors to consider when weighing up the probability of any sports bet, which makes it harder for punters and bookmakers alike to establish the right price. Bookmakers as a result can often take a cautious approach by setting a high overround, and it is important for punters to understand this when betting in any particular market. Where possible, you should always look for the market with the smallest overround to maximise your chances.
Things to look for
When it comes to the traditional football match betting markets, which offers three outcomes of home win, away win and draw, the typical overround will be around 111% to 112%, and can be higher than that for more obscure European or World football leagues.
A good rule of thumb to use is that the greater the number of outcomes in a market, the higher the overround is likely to be. For example, in the Correct Score market for a football match, there may be as many as 24 possible options and the overround is likely to be between 130% and 160%. By contrast, with the Total Goals Over/Under 2.5 market, which has only two possible options, the overrounds are usually less than 110%.
Asian handicap betting, in which there is no draw option, is another kind of market with a low overround, along with the outright markets in sports such as tennis, snooker, and darts, while the standard Handicap and Total Points markets in most American sports have the smallest overrounds of all, often as low as 103% or 104%.
Conclusion
The overround is a fact of betting life, and indeed, without it, bookmakers could not make a profit and would soon go out of business. As a punter it is important that you understand how the overround works and how to use it to find markets where the bookmaker’s advantage is minimised, in order to optimise your betting strategy.