How is House Edge Calculated?

[loto7]

I'm trying to work out if there's a way to generalise this beyond simply calculating a flat vigorish % and reapplying to the original odds to determine the "fair" odds.

For example, if a 2-way market has odds of 1.97 and 1.9, then I sum the implied probabilities, so 1/1.97+1/1.9 = ~1.034, so the house edge is about 3.4%. Then I multiply the original odds by this 1.033 figure to get ~2.04 and ~1.96.

In the scenarios where odds are around evens this seems perfectly reasonable. However, we all know that house edge may not be applied equally to all odds.

From my research I suspect that it tends to be applied disproportionately to more extreme odds. Let's imagine a 2-way market where the odds are 1.01 and 25. So "fair" odds would be 1.04 and 25.75. I think it's pretty clear that these are likely not the true fair odds for a market like this.

So what's going on exactly? How can I make a best guess here?