The idea of the calculations is so that whatever the outcome, the book always adds up, and the betting company always makes a profit. Some punters will win and some will lose, but the betting firms will almost always win. What's interesting is that because most people bet in a mostly arbitrary way, and betting firms need to make a profit, it's quite possible to bet in clever ways which allow you to make a profit too. You are winning versus other punters' poor choice, not versus the betting site.
Now let's take an example: Suppose you were a betting company offering odds in a horse race. To keep it simple, let's suppose there are only two horses in the race, Desert Orchid and Shergar. Now because of the past reputation of these two horses, 90% of the money is on Shergar and 10% on Desert Orchid. No matter what your own opinion of the outcome of the race, the fact is you've got to make money whichever horse wins, or at least not lose money. Therefore if you offer odds which are nine times less favourable for Shergar than for Desert Orchid, then assuming you've got your maths right, whatever the outcome of the horse race you will be paying out less money in winnings than you have collected in bets.
