The Hidden Cost of Sports Betting
Online sports betting captures the imagination of millions around the world. To coin a phrase 'You never see a poor bookmaker' is widely accepted among punters as they never really understand how betting odds work.
The average punter loves the possibility of winning big money by predicting various outcomes of a particular sport can be irresistible to many.
However, most people are not aware that there is a hidden cost associated with sports betting, which can significantly affect their chances of winning and even their overall profitability. This hidden cost is called "bookmakers' over round," or simply "over round" for short.
So what exactly is over round? In simple terms, it's the bookmaker margin built into the odds offered, to ensure that they make a profit regardless of the outcome.
Every time you place a bet, you are essentially paying this margin to the bookmaker, even if you win. For example, if an event has two equally likely outcomes (e.g., heads or tails in a coin toss), then ideally, each outcome should have betting odds of 2.0 (50% probability).
However, bookmakers will typically offer odds slightly lower than this (e.g., 1.95 for each outcome), which means that even if both outcomes occur with equal frequency over time, the bookmaker will still make a profit.
Understanding over-round is crucial for sports bettors because it can affect their ability to find value bets and make informed decisions about where to place their wagers.
If you don't understand how over-round works or how to identify when it's high or low for different events and markets, then you may end up losing money in the long run even if you win some bets in the short term.
Therefore, in this article, we will explore what over-round is and how it works in practice so that you can become more knowledgeable about this key aspect of sports betting and improve your chances of success in this exciting and rewarding activity.
The Over Round Explained
When it comes to sports betting, bookmaker odds come in different types, here in the UK fractional odds were widely used until online bookmakers adopted the European decimal odds on all betting markets.
You have to remember that a bookmaker is a shop that sells odds and as a punter, you need to think of all the odds that are available to bet on will have some kind of mark up, in the same way, a clothing outlet will mark up the price of the sweatshirt to ensure they make a profit if it was sold.
One major difference is that we're more likely to shop around for the best prices when looking to purchase a sweatshirt.
To this day the vast majority of punters will stick to betting with one or two bookmakers and settle for odds quoted.
One of the most popular online bookmakers is Bet365 and they generally have a 6-8% margin on match odds from the big European football leagues.
This means the prices offered will total over round of 106-108% when added together, so in theory, Bet365 will profit £6 to £8 for every £100 bet into the match odds market.
The over round total of all the odds on the outcome of an event. While the implied probability of each result adds up to 100%, bookmakers add a margin to the odds to make a profit, meaning their total over round is always above 100%.
What is the Difference Between Vig & Over Round?
The vig is the profit that the bookmaker is guaranteed to make when the odds offered attract bets on all possible outcomes in the desired ratios.
Overround is a term related to betting markets that are often confused with other terms. It is calculated by adding together the reciprocals of all the prices in a given betting market. In some cases, 1 is subtracted from this sum to simplify certain calculations.
How bookmakers use over-rounds to ensure profit
In head-to-head sports markets such as a tennis match you can expect the margins to be between 5-8%, but in a horse race may have a 30-40% margin, especially if there are 12 or more runners, plus in most races the starting price returns a bigger margin than the live odds.
Bookmakers rely on punters having multiple bets (accumulators) as smaller margins of match odds are compounded into bigger margins the more selections that are added.
The higher the margin, the less likely it is that a bettor will make a profit. This is why it's important to shop around for odds from different bookmakers if you're serious about making money from sports betting.
How Over Round Works
Now that we've defined what an over round is, let's delve deeper into how bookmakers calculate it. Essentially, the over-round is calculated by adding up the probabilities of all possible outcomes in a sporting event and then converting those probabilities into odds. The sum of those odds will always be greater than 100%, which gives bookmakers their profit margin.
To make things easier to understand, here's an example: Here is the 2023 Champions League Final between Manchester City and Inter Milan
The bookmaker might assign the following implied probabilities to each outcome:
- Manchester City wins: 68%
- Inter Milan wins: 12%
- Draw: 20%
To calculate the over round, bookmakers would add up these percentages: 68 + 12 + 20 = 100%. However, this doesn't take into account their profit margin, so they convert these percentages into odds:
- Manchester City wins: (100 / 68 ) x 1 = 1.44
- Inter Milan wins: (100 /12) x1 = 7.50
- Draw: (100/20)x1= 4.50
In this example, the sum of the decimal odds is approximately equal to 105%, which represents the over round. It's important to note that not all bookmakers will offer identical odds for sporting events - each one has its own proprietary methods for calculating over rounds which can lead to significant disparities between them.
Impact on Punters
Bookmakers betting odds can have a significant impact on a punter's long-term ability to gain a potential profit betting with a bookie.
In the early to mid 2000's betting exchanges such as Betfair gave the sharp-minded punter the opportunity make markets on the platform.
They would use both Vig and percentages in fringe markets on the betting exchange to secure a net profit on all outcomes on a particular event.
The early adopters of the betting exchange knew how to calculate the true odds through statistical probability and because they knew how betting odds work they could build in their own profit margin to make consistent money.
The lack of understanding of over rounds from the vast majority of punters results in them not being able to identify value bets.
A value bet is one where the odds offered by the bookmaker are higher than they should be based on the actual probability of an outcome occurring. By calculating the actual probability and comparing it with the bookmaker's odds, a savvy punter can identify these opportunities and take advantage of them.
How Over Round Affects Odds
Over round essentially affects all odds offered by bookmakers. It is reflected in everything from over / unders and match odds to correct score.
This means that no matter what type of bet you're interested in making, understanding how over round impacts those specific odds is crucial.
For example, let's say you want to place an overs bet on an upcoming Premier League game. The odds offered by your chosen bookmaker for over 2.5 goals are 1.73 while those for under 2.5 goals are 2.20.
These numbers reflect not only the chances of goals being scored, but also the bookmaker's over round. In this particular example, the over round is around 3.0%.
This means that if you bet £100 on each team, the bookmaker would expect to make a profit of approximately £3.00 regardless of the score in the game. Understanding this can help punters decide whether or not they want to place a bet in any given market.
The Importance of Understanding Over Round
Understanding over round is critical for anyone who hopes to make money betting on sports. By understanding how bookmakers calculate their odds and adjust them based on their built-in profit margins, punters can make more informed decisions about when and where to place their wagers. Ultimately, being familiar with over rounds can mean the difference between winning and losing in sports betting.
You should take control of your own decisions instead of relying solely on luck or chance. By staying informed about bookmakers' profit margins, calculating implied probabilities accurately, and identifying value bets, savvy sports punters can increase their chances of success over time and potentially even turn a profit in the long run.
Tips for Punters
Identifying a High Over Round Bookmaker
One of the most important things that any bettor can do is to identify whether the bookmaker they are using has a high over round. Fortunately, it's not too difficult to do this, as there are several signs that you can look out for. One of the biggest red flags is if you notice that the odds offered by the bookmaker don't seem to add up.
For example, if you were betting on a football match and the odds for each team added up to more than 100%, then this would be an indication that the bookmaker has set a high over round. Similarly, if you notice that certain types of bets always have lower odds compared to others, then this could also suggest a high over round.
Another sign to look out for is if a bookmaker consistently offers lower odds compared to their competitors. While it's normal for different bookmakers to offer slightly different odds, if one consistently lags behind in terms of value then this could be an indication of an inflated over round.
Minimizing Impact on Betting Outcomes
Once you've identified that a particular bookmaker has set a high over round, there are some things you can do in order to minimize its impact on your betting outcomes. One approach is simply to shop around and compare odds offered by different bookmakers. By doing this, you can find other operators who offer better value and lower over rounds.
Of course, this might require opening accounts with multiple sites which isn't always practical. Another thing you can do is focus on placing bets where there is less likelihood of being hit by the over round.
For example, focusing exclusively on markets with relatively low margins such as outrights or point spreads will help mitigate impact from higher margins elsewhere such as prop or novelty bets. It's important to stay disciplined with your betting.
While it can be tempting to chase high odds or place bets on long shots, these types of bets are often less likely to pay off and can result in significant losses. By staying focused on value and making informed decisions that minimize the impact of over rounds, you'll be able to improve your overall outcomes and become a more successful sports bettor.
Don't Ignore the Over Round
Understanding bookmakers' over rounds is crucial for sports bettors who want to make informed decisions and increase their chances of winning. We've discussed how over round affects the odds offered by bookmakers and how it impacts betting outcomes. Betters should pay close attention to the over round when placing bets, as it can make a significant difference in their winnings.
Never Stop Learning
Sports betting is complex, but learning about its intricacies can be both stimulating and financially rewarding. While we've covered one aspect of sports betting with this article, there's more to discover. As bettors continue to educate themselves on sports betting strategies and techniques, they will become more successful in their wagers.
With careful consideration, bettors should not fear the bookmakers' over round. Instead of being discouraged by it, they should embrace it as just another factor to consider when placing bets.
By understanding what an over round is and how bookmakers use it to ensure profits, bettors can minimize its impact on their winnings while still enjoying the thrill of sports betting. Remember that small adjustments in your approach could lead you to greater success in the long run, so never give up!