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Overround

Overround is the amount by which the sum of implied probabilities across all outcomes in a market exceeds 100%, representing the bookmaker's or platform's built-in margin. An overround of 110% means the house has a 10% edge embedded in the prices.

Updated June 24, 2026Probability & Forecasting
TL;DR
Overround is how much the implied probabilities across a market add up to above 100%. It is the bookmaker's margin baked into the odds, ensuring the house profits over time regardless of outcome.

Key Points

✓In a fair two-outcome market, implied probabilities should sum to exactly 100%. Any excess above 100% is the overround.
✓A 5% overround means bettors as a group are receiving odds worth only 95 cents on the dollar, with 5 cents going to the house.
✓Overround is mathematically equivalent to vig, though overround is expressed as a percentage above 100% while vig is the house margin as a share of stakes.
✓Lower overround markets are more efficient and offer better value to traders, which is why comparing markets via [[line-shopping]] matters.
✓Prediction markets like [[kalshi]] may have lower structural overround than traditional sportsbooks due to their exchange model, where traders match against each other.

How Overround Is Calculated

To calculate overround, convert each outcome's odds into an Implied Probability and sum them. For a binary event with odds implying 55% and 60% respectively, the total is 115%, giving an overround of 15%. The higher the overround, the worse the expected value for participants. In traditional sports betting, overrounds of 5-10% are common. In regulated prediction markets, trading fees and bid-ask spreads play a similar role to overround, representing the cost of transacting. On Polymarket, the effective overround in liquid markets is often well under 2%, making prices more reflective of true implied probabilities and more useful for genuine forecasting purposes.

Overround, Vig, and Market Quality

Overround and Vig are two ways of expressing the same house edge. Overround is the raw total above 100%, while vig expresses the margin as a percentage of the theoretical fair-odds stake. Both measure how much value is extracted from participants per transaction. High overround degrades the accuracy of prices as probability signals because prices are systematically shifted away from true probabilities to favor the house. A market with significant overround will show the longshot side underpriced and the favorite overpriced, contributing to Longshot Bias. For traders using Line Shopping across platforms, finding the lowest overround market on a given event directly improves expected returns and the quality of probability information extracted from prices.

Related Terms

Vig
Vig (short for vigorish, also called juice) is the fee or margin built into market odds that ensures the house or platform profits over time, regardless of which outcome occurs. It is the cost of participating in a market.
Implied Probability
Implied probability is the likelihood of an event occurring as expressed by the current market price of a prediction market contract. On binary markets, a contract priced at 65 cents implies a 65% chance the event resolves YES.
Line Shopping
Line shopping is the practice of comparing prices for the same event contract across multiple prediction market platforms to find the most favorable entry price before placing a trade. It is one of the simplest and most reliable ways to improve long-run returns.
Longshot Bias
Longshot bias is the systematic tendency for low-probability events to be overpriced in prediction markets and betting exchanges, causing traders who consistently bet on unlikely outcomes to lose more money than the [[vig]] alone would predict.
Bid-Ask Spread
The bid-ask spread is the gap between the highest price a buyer is willing to pay (the bid) and the lowest price a seller is willing to accept (the ask) for an event contract. This gap represents an implicit transaction cost every trader pays when entering or exiting a position.

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