Fixed-odds betting – Wikipedia

It is customary with fixed-odds gambling to be aware of the odds at the time of their position of the wager (the“live cost“), however, the group also includes wagers whose price is determined only when the race or match starts (the“starting prices“). It is excellent for bookmakers to price/mark a book such that the net result will be in their favor: the amount of the probabilities offered for all probable results are going to be in excess of 100%. The surplus over 100% (or overround) represents profit to the bookmaker in case of a balanced/even book. In the case of an book that is imbalanced, the bookmaker might need to pay out more winnings than what is staked or may bring in more than mathematically anticipated. An imbalanced book may emerge because there is no way for a bookmaker to be aware of the true probabilities for the results of competitions left to human work or to forecast the stakes that are going to be attracted from others by fixed odds compiled on the basis personal view and comprehension.
With the arrival of Internet and bet exchange betting, Dutch books against bookmakers and exchanges and the possibility of arbitrage actions that were fixed-odds has expanded significantly. Betting exchanges in particular behave like a stock market, allowing the chances to be set in the plan of trading between players that are individual, typically leading to quoted chances which are reasonably near the“true odds.“

Read more here: