Overround: how the margin is built into the prices
A bookmaker's margin, or overround, is the amount by which the implied probabilities of all outcomes add up to more than 100%. Prices of 1.90 and 1.90 on a two-way market sum to 105.26%, a margin of 5.26%. This page defines the term, works two examples and shows where a tote or an exchange takes its share instead.
The definition and the formula
Margin = (sum of 1 ÷ odds for every outcome) − 1.
Each 1 ÷ odds is an implied probability. In a fair market they would add to exactly 1, or 100%. Anything above that is the margin the bookmaker keeps on average across the market.
Where this stands: the margin is the excess of the implied probabilities over 100%.
A two-way market
| Outcome | Decimal odds | Implied probability |
|---|---|---|
| Side A | 1.90 | 52.63% |
| Side B | 1.90 | 52.63% |
| Total | 1.0526 | 105.26%, margin 5.26% |
Where this stands: 52.63% plus 52.63% is 105.26%, so the margin is 5.26%.
A three-way market
| Outcome | Decimal odds | Implied probability | With margin removed |
|---|---|---|---|
| Home win | 2.40 | 41.67% | 39.97% |
| Draw | 3.30 | 30.30% | 29.07% |
| Away win | 3.10 | 32.26% | 30.95% |
| Total | 1.0423 | 104.23%, margin 4.23% | 100% before rounding |
To remove the margin, divide each implied figure by the total. For the home win, 0.4167 ÷ 1.0423 = 0.3997.
Where this stands: dividing by the total scales the three figures back to 100%.
Where a tote and an exchange take their share
A tote, or totalisator, pools stakes and pays the winners from the pool after a deduction.
Illustrative example: a A$20,000 pool with a 16% deduction leaves A$16,800. If winning tickets staked A$3,000 in total, the dividend is 16,800 ÷ 3,000 = A$5.60 per A$1. The 16% is an invented figure, not a published rate.
A betting exchange matches one customer who backs an outcome with another who lays it, and charges a commission. Compare the models in fixed odds or tote and exchange or bookmaker.
| Item | Value | Status |
|---|---|---|
| Tote deduction | Not read | Not confirmed on 2026-11-13 |
| Exchange commission | Not read | Not confirmed on 2026-11-13 |
Where this stands: each model takes a share; the published rates are not yet read.
Using the figure
A margin does not forecast a result. It only says how much the prices lean in the bookmaker's favour. See are bookmaker odds fair? and test your own estimate in the expected value calculator. Odds notation is in how to read decimal odds.
Where this stands: the margin describes the prices, not the outcome of any bet.
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FAQ
What is overround?
It is the amount by which the implied probabilities of all outcomes in a market add up to more than 100%. The excess is the margin built into the prices.
How do you calculate the margin of a market?
Add 1 ÷ odds for every outcome, then subtract 1. Two outcomes at 1.90 each give 0.5263 + 0.5263 = 1.0526, a margin of 5.26%.
Does a tote have a margin?
A tote shares a pool of stakes among winners after an amount is deducted. The deduction plays the role of the margin. Published rates are not confirmed on 2026-11-13.
How does a betting exchange charge?
An exchange matches backers and layers and charges a commission. The rate is read from the exchange's own page and is not confirmed on 2026-11-13.