The Relationship Between Odds and Probability

The odds for a selection are based on the probability of that selection winning. Favorites have a higher probability of winning, so they get lower odds; underdogs have a lower probability of winning, so they get higher odds.

To work out what probability odds represent, divide 100 by the decimal odds, that is: 100 ÷ odds = probability %

➡️ Understanding Implied Probability

Implied probability is the conversion of betting odds into a percentage, representing what the sportsbook believes the likelihood of an outcome is (plus their fee). For example, decimal odds of 2.00 suggest a 50% chance of the event occurring.

➡️ The “Pick ’em” Scenario

A “pick ’em” or 50:50 market occurs when the sportsbook views both sides as equally likely to win, theoretically requiring odds of 2.00 for a fair bet. In practice, you will see odds like 1.91 on both sides, as the bookmaker removes a portion of the payout for themselves.

The Sportsbook’s Overround

The sum of the probabilities for all possible outcomes in an event must be 100%.

For example, in an NBA game (no draw), if one team has a 60% chance of winning, then the other team must have a 40% chance of winning.

• If the sportsbook sets odds representing 100% probabilities, they would make no money. So they give you lower odds.
• Lower odds represent a higher probability.
• If we add up the probabilities of these odds, they will equal more than 100%.

➡️ A low-margin sportsbook like BetBTC sets its 50:50s at odds of 1.93. This represents a 51.81% probability for a sum of 103.63%.

➡️ A high-margin sportsbook might offer 1.88, representing a 53.19% probability for a sum of 106.38%.
The true probabilities total 100%, so the sportsbook offering 1.88 gives a 6.38% advantage.

➡️ The amount over 100% is the sportsbook overround, also known as juice, vigorish, vig, the sportsbook’s edge, or the take. When the sportsbook offers odds so that the sum of the probabilities they represent is 105%, that’s a 5% overround.

Overround is the enemy of the bettor because the higher the overround the lower the odds
and the less the return for winning bets.

Overround in Different Types of Markets

Overround is not uniform; it fluctuates depending on the complexity of the market and the number of possible outcomes.

Some sportsbooks choose a point spread or points total, which is not quite 50:50.

For example, handicapping a game at 8.5 points even though the market consensus says it should be 7.5 points. This makes it harder to compare with other sportsbooks that have the spread at 7.5 points, so we need to work out the overround.

Overround in Point Spread Markets

Point spreads are designed to create a 50:50 betting proposition by handicapping the favorite, yet the odds usually sit between 1.85 and 1.95 rather than 2.00.

Calculating the overround on a spread helps you determine if the bookie is shading the line or charging an unfair premium for a specific handicap.

Selection	Odds	Implied Probability (%)
Boston Celtics –8.5 points	1.95	51.28% (100 ÷ 1.95)
L.A. Lakers +8.5 points	1.80	55.55% (100 ÷ 1.80)

• Total: 106.83%
• Overround is 6.83%

Overround in 3-Way Markets

In sports like football (soccer), a 3-way market (Win-Loss-Draw) naturally carries a higher overround because the bookmaker takes a small cut from three different outcomes instead of two. Because there are more variables, sportsbooks often hide larger margins in the “Draw” or “Underdog” prices, making it vital to sum all three implied probabilities.

Selection	Odds	Implied Probability (%)
New York Red Bulls	1.70	58.82% (100 ÷ 1.70)
Draw	3.55	28.17% (100 ÷ 3.55)
L.A. Galaxy	5.00	20% (100 ÷ 5.00)

• Total: 107.02%
• Overround is 7.02%

Final Say

You can’t simply compare 50:50 odds to determine how competitive sportsbook odds are. To get the best odds on any selection, check odds comparisons and use an overround calculator.

Summary Overview: Margins by Market Type

Market Type	Typical Outcomes	Example Odds	Implied Total
Fair Market	2 (e.g., Coin Flip)	2.00 / 2.00	100%
Low-Margin Spread	2 (e.g., NBA Spread)	1.95 / 1.95	102.56%
Standard Spread	2 (e.g., NFL Spread)	1.91 / 1.91	104.72%
Typical 3-Way	3 (e.g., Soccer 1X2)	1.70 / 3.55 / 5.00	107.02%

If all possible outcomes are available for betting, overround works for any market. The total overround in general markets will be higher when there are more selections; therefore, there will be some overround applied to all selections in a market.

When you combine the best odds on every selection from multiple sportsbooks you effectually get a much lower overrround!