An over-round displays a bookmaker’s profit on a market. Each different market, whether it be a horse race, football match or a roulette wheel will have an over-round. This is how a bookmaker makes their profit (or the juice as it’s known within the industry) and is an integral part of bookmaking.
Understanding an over-round seems complicated at first glance, but it can be broken down thanks to a fairly simple equation. A horse’s chance of winning a race is translated into a percentage chance, and every book has to equate to at least 100%. Anything in excess of 100% means the bookmaker is in profit.
Adding together the percentage chances a bookie displays in his prices for a particular race will give the over-round. For example, if there are two horses running in a two runner race with an equal chance of winning, a “fair book” would make both animals an even-money shot, giving them both a 50% chance of winning. However, fair books don’t exist in this industry and rather than making the two horses odds of even money, the bookie would make them both something in the region of 5/6 shots. Backing an outcome at 5/6 would suggest the horse has a 54.55% chance of winning, so if there are two 5/6 shots it would equate to an over-round of 109.1% (54.55% x 2). That’s how a bookmaker makes their money.
The same rules apply when it comes to larger races and more runners. In order for a punter to make a long-term profit, it’s essential they can identify when a book has given a horse a smaller percentage of winning than its true likelihood. When a book has a horse’s chance at 4/1 (20% chance of winning) and the punter believes the horse’s true chance of winning is a 25% chance (3/1 shot), this is known as a value bet and identifying value is key to making a profit long-term.
In 2015 there was outrage after the over-round for the Aintree Grand National returned at an astonishing 165%. It was the largest over-round in the history of bookmaking and the starting price system that precedes every horse race in the UK appeared to fail customers looking for a fair shake. However, The Starting Price Regulatory Committee refuted the argument and cited 75% of customers betting on the Grand National placed bets at Starting Price. Horse racing is the only sport that operates with start prices (a price decided at the time of the off rather than when a bet has been struck) but it could make for more controversial over-round cases in the future. The 2016 Grand National had an over-round of 149%.