Overround is the British bookmaking term for the total implied probability in a market exceeding 100%, representing the bookmaker's built-in profit mechanism. A market with an overround of 110% means the sum of all implied probabilities adds to 110% — 10 percentage points of pure profit for the bookmaker over a perfectly balanced book.
The term originated in UK horse racing, where bookmakers would compete on the racecourse with their own books. A bookmaker who could offer a book that totalled 115% (15% overround) was less generous than one offering 108% (8% overround). Punters learned to compare the total percentage across all runners to assess value.
Calculating overround: sum 1/odds for every selection in the market. For a five-runner horse race: 1/3.0 + 1/4.0 + 1/5.0 + 1/8.0 + 1/12.0 = 33.3% + 25.0% + 20.0% + 12.5% + 8.3% = 99.1%. This is a very low overround (actually below 100% before including "any other" runners — usually the book rounds up). Typically, a 5-runner race might have a 115-125% book.
Overround by market type: the overround varies by market sophistication and competition. Major football 1X2 markets: 3-8%. First goalscorer markets: 30-50% (many selections, difficult to price). Correct score: 15-25%. The more outcomes, the harder to price and typically the higher the overround.
Example
Horse racing market with 4 runners. Prices: 2/1, 3/1, 5/1, 8/1. Implied probabilities: 33.3% + 25.0% + 16.7% + 11.1% = 86.1%. Wait — that's below 100%. This is an exceptional case (almost certainly wrong in practice). Normally prices would be set so implied probabilities total 115-125% for a 4-runner race, ensuring clear bookmaker profit.