Sports betting is big business and bookies make a lot of money out of what they do. If you want to become successful at sports betting it is a good thing to know exactly how the people you are up against (the bookies) actually go about making their money.

Just say you wanted to place a bet on the outcome of the flip of a coin. There are two results that have an equal chance of occurring: heads, or tails. As you would rightly assess, the chances of heads or tails coming up are 50:50 and the true odds therefore are evens (1/1 or 2.0). Would you expect a bookmaker to offer these odds? Of course you wouldn’t. Bookies are in the business of making money and if they offered you such odds they would simply break even. So how exactly do bookies make money?

The Overrround – How Bookies Make a Book

Let’s use the example of an English Premiership football match – say between Manchester United and Portsmouth with the true chance of each outcome of the match being:

Man United win: evens (1/1 or 2:0)

Draw: 2/1 (3:0)

Portsmouth Win: 5/1 (6:0)

We will now convert these true odds into true percentages:

Man United to win percentage chance: Evens (or 1-1) = (50%)

The draw percentage chance: 2-1 = (33%)

Portsmouth to win percentage chance: 5-1 = (16%)

If we add all of these percentages up we get 100% which is called a total ‘book’ and this would leave the bookmaker pretty much breaking even no matter what the outcome of the match. Of course they want to do better than break even so they will reduce the odds so that they are more in their favour and thus enabling the bookie to make a profit. The following is more likely to be offered to the punter:

Man Utd win: 4-5

Draw: 9-5

Portsmouth Win: 4-1

4-5 = (55%)

9-5 = (35%)

4-1 = (20%)

If we add these percentages together we see that the ‘book’ is now 110 which leads to an overround of 10%. The overround is essentially the profit the bookmaker will make if the right proportion of each bet is matched at the stated odds. In this example this means that for every £100 that is paid out to punters, the bookie will expect to keep £110 which is a profit of £10 for every £100 bet. This example just goes to show the vast quantities of money there are to be made by bookmakers especially when you think of how many betting markets they cover and the value of bets they take.

In practice there is much more to the bookies’ role as odds will continuously change as more money is placed on one outcome over the others. They do not work these odds out manually however, and will tend to use an overround calculator to work out the odds that should be offered – no matter how many potential outcomes there are in a sports event.

This article was written by Marcus Holland – a sports and betting expert living in Hemel Hempstead, UK. Marcus graduated from the University

By yanam49

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