How Sportsbook Odds Are Set

A sportsbook price starts with a modelled probability for each outcome. Those probabilities are then converted to odds and a margin is added, so the implied probabilities across all outcomes sum to more than 100%.

That excess is the overround, and it is the bookmaker's built-in margin. A two-way market priced at 1.91 each side implies about 104.7% total, meaning a 4.7% overround.

After opening, prices move for two reasons: new information such as team news or conditions, and liability management as money arrives on one side.

Comparing the overround across books on the same market is the clearest way to see which is pricing tightly. Lower overround means better value on average, independent of any view on the event itself.