Overround in horse racing refers to the built-in profit margin that bookmakers include in the odds they offer. It represents the percentage by which the total probabilities of all outcomes in a race exceed 100%. This ensures that bookmakers make a profit regardless of the race outcome, provided they balance their books effectively.
What Does Overround Mean in Horse Racing?
The overround is a key concept in betting and reflects how bookmakers set their odds. In an ideal situation, the total probability of all possible outcomes (e.g., all horses in a race) should equal 100%. However, bookmakers adjust the odds to exceed this threshold, often resulting in a figure like 110% or 120%. The difference above 100% is the bookmaker’s overround, essentially their built-in profit margin.
Why Is Overround Important?
For bettors, understanding the overround is crucial because it directly affects the value of the odds offered. A higher overround means less favourable odds for the bettor, as the bookmaker is taking a larger profit margin. Savvy bettors often look for races or bookmakers with lower overround percentages, as this indicates better value and potentially higher returns on winning bets.
Examples of Overround in Horse Racing
For example, in a race with three horses, the bookmaker might assign odds that imply probabilities of 40%, 35%, and 30% for the three horses to win. Adding these together gives 105%, meaning the overround is 5%. This 5% represents the bookmaker’s margin, ensuring they profit regardless of the outcome.
Related Terms
- Odds: The numerical representation of a horse’s chances of winning, influenced by the overround.
- Betting Margin: Another term for the bookmaker’s profit margin, closely related to overround.
- Racing Post Rating (RPR): A performance rating used to assess a horse’s past performances, which can inform betting decisions.