{"id":10775,"date":"2023-08-09T14:13:40","date_gmt":"2023-08-09T04:13:40","guid":{"rendered":"https:\/\/www.betfair.com.au\/hub\/?p=10775"},"modified":"2025-03-25T09:26:46","modified_gmt":"2025-03-24T22:26:46","slug":"overrounds","status":"publish","type":"post","link":"https:\/\/www.betfair.com.au\/hub\/education\/overrounds\/","title":{"rendered":"HOW TO: UNDERSTANDING OVERROUNDS"},"content":{"rendered":"
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Learn the Truth Behind the Odds<\/h2>\n <\/div>\n <\/div>\n \n \n \n \n \n
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Do you pay attention to the percentages at the top of an Exchange market? In this article we are going to explain why you should. These percentages are going to reveal one of the biggest differences between a bookmaker and a betting exchange.<\/p>\n

Common sense says that two outcomes can occur in a coin flip. You have a 50% chance of correctly predicting whether it lands on heads or tails. The two outcomes add up to 100% – known as a perfect betting market<\/strong> \u2013 meaning the odds of both outcomes are set at $2.00 to make it a 50-50 split. So why will you see head-to-head markets where both selections are priced below $2.00?<\/p>\n

This is an example of where the overround<\/strong> raises its head and what bookmakers need to do to make money (IE. Take a portion of revenue from the customer). The overround is a single figure \u2013 expressed as a percentage \u2013 that can be calculated for any market in which a margin can be built into the odds. It is calculated by<\/p>\n

    \n
  1. Finding the implied probability of each selection in the market through research and historical data<\/li>\n
  2. Adding up the results for the market and converting to a percentage<\/li>\n<\/ol>\n

    Let\u2019s use an example of an AFL head-to-head market for Richmond v Collingwood, where each team is paying $1.90. The overround is calculated as follows:<\/p>\n

      \n
    1. [Implied probability of Richmond winning] + [Implied probability of Collingwood winning]<\/strong>; which equals<\/li>\n
    2. 1\/1.90 + 1\/1.90; <\/strong>which equals<\/li>\n
    3. 5263 + 0.5263; <\/strong>which equals<\/li>\n
    4. 053 <\/strong>or an overround of 105.3%<\/strong><\/li>\n<\/ol>\n\n <\/div>\n <\/div>\n \n \n \n
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      Why is the Overround Important to You?<\/h2>\n <\/div>\n <\/div>\n \n \n \n \n \n
      \n
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      The bigger the overround, the better it is for the bookmaker. When their profit margin grows, the less value is on offer to the punter. What you want to see is an overround as close to a perfect 100% market as possible. That means the bookmaker will have no implied edge on the market whatsoever.<\/p>\n

      Or, to put it in a different context<\/p>\n

      If you were to back every runner in a 12-horse race in order to win $100.00 and the overround was 120%, you would need to outlay $120.00, meaning you are already $20.00 behind before the race has jumped! If the overround was 110%, then your outlay would be $110.00 \u2026 etc.<\/em><\/strong><\/p>\n

      You\u2019re now ready to hunt for the best available odds using overrounds as a guide. They can vary significantly depending on what you are betting on. You should therefore always be mindful of markets where the overrounds appear too high \u2013 racing futures markets are a great example of a potential trap for punters.<\/p>\n

      The only problem is that most bookmakers won\u2019t display their overrounds before or during an event \u2013 while Betfair does. You can also find overrounds visible on third-party odds comparison websites, which are a damning reflection of the difference between a bookmaker and a betting exchange.<\/p>\n\n <\/div>\n <\/div>\n \n \n \n

      \n
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      Get Around Real Value!<\/h2>\n <\/div>\n <\/div>\n \n \n \n \n \n
      \n
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      A betting exchange, such as Betfair, uses a commission-based model to structure markets. Betfair markets will form freely and are dictated by the punter. There is no profit margin built in like a bookmaker, meaning overrounds will strike much closer to 100% and offer fairer prices than what a bookmaker can provide. This is why you will see Betfair regularly demonstrate its price advantage over competitors (after commission).<\/p>\n

      To give an example, the average Betfair overround on all Australian Group 1 thoroughbred races in 2021 prior to jump time was approximately 103%. The average overround on the same events with some of Australia\u2019s largest bookmakers was somewhere between 115% and 120%!<\/em><\/strong><\/p>\n

      If you are keen to use Betfair based on overrounds, here\u2019s a tip: wait until 30 minutes from jump time to engage with a Betfair market. The prices will typically start to form and become more liquid, and you will see the overround shrink closer to 100% from then.<\/p>\n\n <\/div>\n <\/div>\n \n \n \n <\/div>\n\n\n

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      \n\n \n \n \"\"\n \n <\/a>\n \n <\/div>\n <\/div>\n <\/div>\n ","protected":false},"excerpt":{"rendered":"

      Welcome to our guide to Overrounds on Betfair. Discover competitive odds compared with traditional bookmakers.<\/p>\n","protected":false},"author":33,"featured_media":46683,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"tipster_notification_checkbox":false,"send_notification":false,"footnotes":""},"categories":[22,24],"tags":[],"brand":[],"class_list":["post-10775","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education","category-betfair-basics"],"acf":[],"yoast_head":"\nOverrounds | Betfair Education How To | Betfair Hub<\/title>\n<meta name=\"description\" content=\"Unlock the betting advantage with our guide to Overrounds on Betfair. 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