# Overround: how the margin is built into the prices

> Overround is the sum of implied probabilities minus one. Worked two-way and three-way examples, and how a tote or an exchange takes its share instead.

Source: https://bookiechecklist.com/bookmaker-margin-overround/
Updated: 2026-11-13

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](https://bookiechecklist.com/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

**Two outcomes, illustrative prices, not a quote · checked 2026-11-13**

| 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

**Three outcomes, illustrative prices, not a quote · checked 2026-11-13**

| 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](https://bookiechecklist.com/fixed-odds-or-tote/) and [exchange or bookmaker](https://bookiechecklist.com/betting-exchange-or-bookmaker/).

**Published rates · source: organiser and exchange pages · checked 2026-11-13**

| 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?](https://bookiechecklist.com/are-bookmaker-odds-fair/) and test your own estimate in [the expected value calculator](https://bookiechecklist.com/ev-calculator/). Odds notation is in [how to read decimal odds](https://bookiechecklist.com/how-to-read-decimal-odds/).

**Where this stands:** the margin describes the prices, not the outcome of any bet.

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**Where this stands:** free help and exclusion routes exist and are named above.

## 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.