Over-round Betting Term Meaning
Sportsbooks and bookmakers, like most other companies, are in business to make money. The way they make money is by smart use of the over-round. This page will explain how it works.
The bookmaker will price the markets to their advantage, which in a simplified scenario means that all possible outcomes for an event will add up to more than 100%, and anything greater than 100% is their profit.
Let’s take an example from the English Premier League, where Wolves are playing Manchester United. We used an implied probability calculator to convert the odds but if you want to do it manually, simply divide 100 by the decimal odds.
|Man Utd Win||2.05||48.8%|
That means there is an over-round of 6.8% factored into those wagers. If the odds were entirely ‘fair’, they would all be 6.8% higher so the implied probability was 100%.
|Man Utd Win||2.19||45.7%|
As you can see, the higher odds would mean bigger payouts for the punters, which would mean no profits for the bookmakers. It takes a highly-skilled team of odds compilers and statisticians, armed with very finely-tuned software, to price the markets.
They have to set the odds in such a way that they are attractive to customers and competitive with their rivals, but still able to turn a decent profit.
Overround and Accumulators
The over-round is compounded when combination bets are placed. If, for example, you placed a four-fold accumulator on odds with a 6% over-round, that would mean your total wager would have an over-round of 6% x 4 = 24%.
That is why many sportsbooks will advertise special offers on their accumulators because it significantly boosts their profit margin. It is also why many seasoned punters steer well clear of combination bets.
Overround and Exchanges
The odds on betting exchanges may still have a little over-round but it will not be as high as a traditional bookmakers. Exchange bets are placed between the punters, rather than between a customer and a bookie.
The exchanges make their money from the small commissions charged on the punters’ transactions. For this reason, you will often find better odds on a betting exchange such as betfair as opposed to a standard sportsbook.
What is Over-round?
Over-round is the profit margin that bookmakers will include in their odds or prices.
What are other names for over-round?
other names for over-round include vigorish or vig.