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|‣||How To Understand Odds & Probability|
|‣||How To Understand American Odds|
|‣||How To Understand Decimal Odds|
|‣||How To Understand Fractional Odds|
Understanding betting odds and how they work is essential for new and experienced players engaging in online sports betting. Odds are a set of numbers that show the ratio of a bettor’s chances of winning and losing.
When sportsbooks set odds, they are making subjective estimates of a specific outcome. It is not a scientific formula. Betting odds will determine how much money you will win if you are correct in your wager.
Odds can appear confusing, but they are simple to understand once you learn what they mean and how they act. And this guide is here to help you accomplish just that so that you can wager with confidence at our top US sportsbooks.
Understanding the odds will also guide you in determining how much money you want to bet on a particular event. You can also figure out which of the bets are better value, and so much more.
Let’s take a look at how to understand betting odds.
Understanding Odds & Probability
In order to understand betting odds, one must examine “probability” and how it affects sports betting odds. The greater the probability of a specific outcome on any given sporting event, the lower the odds. And the lower payout if your bet is correct. A less-probable outcome means higher odds, and a greater payout, if your bet is successful.
Probability means that no outcome is 100% certain. Those events or outcomes that are seemingly all-but-certain will often have very low odds and offer a small payout, given the lack of risk. The same holds true in reverse. An event or outcome that is not very probable carries a higher risk and a higher reward because of its odds.
Essentially, the favorite will have shorter or lower odds than an underdog. This means that you will get a smaller payout if the favorite wins. But it also means they are more likely to win as well, at least in the eyes of the oddsmakers.
Odds attempt to reflect which outcome is more probable in any sports game, tournament, season or encounter. The odds demonstrate the probability of each specific outcome in the eyes of the legal sportsbook that set them.
Because different sports betting sites often offer different odds, smart bettors can compare odds and find the sportsbook with the best odds for the outcome you want.
What Are The Different Odds?
There are several different ways that odds can be represented. Odds can be shown as American, Decimal, or Fractional. However, you do not need to understand all of them to wager. Most legal online and brick-and-mortal sportsbooks in the United State use “American” odds, as explained below.
- American odds: These are written as + or – with a three-digit number based on a 100=1x baseline. The lower number, including negative figures, indicates the favorite. Example: +200 means you will net $200 for every $100 you wager. Conversely -200 means you would have to bet $200 to net $100 on your wager.
- Decimal odds: These are written as simple numbers such as 2.40. The lower the number, the more likely an event is to occur. In this example, you would net $240 on a $100 wager.
- Fractional odds: These are written as a fraction, for example, 2/1. The lower the fraction, the more likely an event is to occur. In fractional odds, the numerator (or top number) is the amount of your potential net winnings and the denominator (or bottom number) is the amount of your wager. In this case, 2/1 odds mean you are betting one unit to win two. Or you would net $200 on a $100 wager if your bet won.
Odds measure the implied probability of an outcome. They show how much money you could win betting on that specific event and outcome. While the odds will tell you a lot, you should never completely rely on them as there are usually additional factors that are not factored into predicting the final odds and outcome.
Legal sportsbooks often manipulate the odds to encourage players to make specific bets and to even the amount of money wagered on a specific event on both sides to limit their liability one way or another. You can also check to see how much the bookmaker is taking from your bet within the odds as a fee (this is also known as “juice” or “vigorish” within the industry).
One should always shop around when seeking betting odds.
Reading American Odds
In the U.S., “American” odds are the most commonly used odds format. Understanding these odds is relatively straightforward. The higher number is attached to the underdog while the lower number denotes the favorite. These odds frequently feature negative numbers, as well.
For instance, Team A and Team B are playing each other. Team A is the favorite at -130 and Team B is the underdog at +110. Simple math allows you to calculate how much you will win from either of these bets and gives you an idea of how close this game could end up being.
If you back the favorite, Team A, at -130, you will have to wager $130 to net $100 on your bet. Or bet $13 to net $10 on your bet. The ratio remains the same no matter how much you wager. In contrast, betting on the underdog Team B at +110 means you only need to bet $100 to win $110. Or bet $10 to net $11.
Don’t forget, any payout will contain your original wager as well as your net winnings. So if you bet $10 on the underdog, you would receive a total of $21, the $10 you originally bet, and the $11 you won.
Probability With American Odds
You can look at these odds and determine the implied probability. To convert odds to probability, take the player’s chance of winning, use it as the numerator and divide by the total number of chances, both winning and losing.
For positive odds, all you need to do is add a hundred to the positive. Then divide 100 by that sum.
With the example above, it looks like this for Team B:
110+100 = 210
210/100 = 0.476 or 47.6%
Given that this team is the underdog, it has less than 50% implied probability that it will win.
With lower odds, which are often negative numbers, the formula looks like this:
(-[-130]) + 100 = 230
130/230 = 0.565, or 56.5%
Therefore, Team A is the favorite.
Reading Decimal Odds
Understanding decimal odds is also very easy. Often legal sportsbooks based in Europe will display their odds in decimal format as a default. However, most sites have the option to change, so you can always select the option you’re most comfortable with using.
So, how does calculating winnings with decimal odds work? Well, first you need to know that the higher the decimal odds, the more unlikely it is that the outcome will occur. So, comparing a team set at 1.61 to a team at 2.40, the first team is more likely to win.
If you want to see how much you will win from taking this bet, then all you need to do is multiply the decimal odds by the amount you would like to wager. Then, take that total and subtract the wagered amount from it.
For example, a $75 bet on a team at 1.61 would result in a win of $45.75.
Probability With Decimal Odds
Calculating the probability of decimal odds is very easy. All you need to do is divide the decimal odds by one. Then, multiply the answer by 100, and you have the percentage.
As an example, if you want to see the probability of a team at 2.40, it becomes 1/2.40 = 0.4166. Multiply this by 100 and the percentage probability is 41.7%. This shows that there is less likelihood of the event occurring.
Reading Fractional Odds
Fractional odds are common in Europe but not so commonly found in the United States. These are a little more complicated than the other odds and are shown like this: 9/4 or 2/1. The numerator, or top number, shows how many times the outcome is likely to fail. The denominator or bottom number shows, the times the outcome is likely to be successful.
Calculating how much you will win is still relatively simple. If a horse, for example, has 8/13 odds, you need to divide 8 by 13, which is 0.615. You then simply multiply this number by the amount you have placed as a bet. A $10 bet would get you a $6.15 win and a total of $16.15 back (the final payout will include the amount of your original bet).
Probability With Fractional Odds
Now that you know how to calculate the winnings, let’s look at how you calculate the probability. The horse at 8/13 odds shows that in 21 races, the horse is likely to win 13 times and lose 8.
To see the implied probability of whether this horse would win the current race or not, you take the denominator (or bottom) number and divide it by the total of the two numbers. In this instance, it would be 13 divided by 21 = 0.619. Multiply this number by 100, and you get the percentage of 62% probability that the horse will win.
In legal sports betting, wagers that end in ties are referred to as a “push” and all money bet is refunded. Ties are not factored into the odds but understanding how they work will help you as a bettor.
You won’t usually see ties offered, as most sports don’t allow ties to occur. In the instance a push does happen, then it’s most likely that the betting site will simply refund your bet. You won’t be losing any money.
Understanding odds can be a bit scary at first. However, with some practice, they are relatively easy to understand. With the knowledge gained here, you’ll be able to make more informed betting choices when it comes to the top online sportsbooks featured on our site.
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