Every betting market adds up to more than 100 per cent. That gap — the market percentage or 'overround' — is the bookmaker's margin, and understanding it is the single fastest upgrade available to a recreational punter.
A market framed to 116 per cent means that, collectively, the prices are 16 per cent worse than fair. Your job is not to beat the horse next to you; it's to find the runners priced at better than their true chance despite that margin.
Converting odds to probability
Divide 100 by the decimal odds and you have the implied probability. A $4 chance is implied at 25 per cent. If your own assessment — or a model's — puts the true chance at 30 per cent, that price represents value regardless of whether the horse wins this particular race.
Value is a long-run concept. Any single result is noise; the discipline is only betting when the implied probability is below your assessed probability, over and over.
