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An overbroke is a term used in betting to describe a situation when the book is set to lose money regardless of the outcome of an event. An overbroke occurs when the total amount of money wagered on all possible outcomes or selections exceeds the total amount of money that the book has to pay out to the winners. An overbroke can also affect the profit margin or the commission that the book earns from each bet.
An overbroke happens when there is a high demand or a low supply for a certain outcome or selection in an event, such as a sports match, a horse race, or a political election. A high demand or a low supply can be caused by various factors and variables, such as:
For example, suppose there is a football game between Team A and Team B. The odds for each team are:
The total amount of money wagered on each team is:
The total amount of money wagered on the game is $300. The book’s profit margin is 10%, which means it keeps $30 and pays out $270 to the winners.
If Team A wins, the book has to pay out $200 x (2/1 + 1) = $600 to the bettors who backed Team A. The book’s loss is $600 – $200 = $400.
If Team B wins, the book has to pay out $100 x (3/1 + 1) = $400 to the bettors who backed Team B. The book’s loss is $400 – $100 = $300.
As you can see, the book loses money if either team wins. This is an overbroke situation, as the book’s losses exceed its winnings.
An overbroke affects the odds and the payout for both the favored and the unfavored outcomes or selections in an event. The book tries to avoid losing money by adjusting the odds and the payout accordingly.
For example, in the previous scenario, if Team A wins, the book loses $400. To prevent this, the book may lower the odds for Team A from 2/1 to 1/2. This means that if Team A wins, the book only has to pay out $200 x (1/2 + 1) = $300 to the bettors who backed Team A. The book’s loss is reduced from $400 to $100.
However, this also means that the bettors who backed Team A will receive less money than they expected. Instead of getting back $300 for every $100 they bet, they will only get back $150 for every $100 they bet. This reduces their profit margin from 200% to 50%.
On the other hand, if the book lowers the odds for Team A, it may also raise the odds for Team B to attract more bets on them. This means that if Team B wins, the book will have to pay out more money than before.
For example, suppose the book raises the odds for Team B from 3/1 to 4/1. This means that if Team B wins, the book has to pay out $100 x (4/1 + 1) = $500 to the bettors who backed Team B. The book’s loss is increased from $300 to $400.
However, this also means that the bettors who backed Team B will receive more money than they expected. Instead of getting back $400 for every $100 they bet, they will get back $500 for every $100 they bet. This increases their profit margin from 300% to 400%.
As you can see, an overbroke affects both sides of an event by changing the odds and the payout for each outcome or selection. The book tries to balance its books by making the favored outcome less attractive and the unfavored outcome more attractive. The bettors have to adjust their expectations and strategies accordingly.
An overbroke is a term used in betting to describe a situation when the book is set to lose money regardless of the outcome of an event. An overbroke occurs when the total amount of money wagered on all possible outcomes or selections exceeds the total amount of money that the book has to pay out to the winners. An overbroke can also affect the profit margin or the commission that the book earns from each bet. An overbroke happens when there is a high demand or a low supply for a certain outcome or selection in an event. An overbroke affects the odds and the payout for both the favored and the unfavored outcomes or selections in an event.