How do betting odds work?

How do betting odds work?
you must begin to the basics steps :

The book percentage (or "overround") is defined by the Racing Post as the "sum of the quoted probabilities across all horses in a race". The bookmakers assign each horse a probability of winning, represented by its odds. The percentage of the "book" represented by particular odds can be calculated by adding one to the odds and dividing the resultant figure into 100. For example:
Evens: 100 / (1+1) = 50%
2/1: 100 / (2+1) = 33.33%
3/1: 100 / (3+1) = 25%
4/1: 100 / (4+1) = 20%, etc.
Simplistically, the overround is indicates the bookmaker's profitability on a race. If an overround is 125%, then the bookmaker can expect to make a profit of 20% (25/125). However, this profit percentage is dependent on each horse being laid for an amount proportional to their contribution to the total book. For the sake of clarity and simplicity, suppose there is a 5-horse race, in which each competitor has an equal winning chance. In a "fair" market, each would be priced at 4/1, so a bookmaker taking bets of 20 on each horse would have a perfectly matched book. Regardless of the result, he has taken 100 on the race and must pay out 100 on the winner, so cannot lose. However, neither can he win.