If you want to come out on top against the bookies it is vital that you understand the fundamentals. When it comes to sports betting there is nothing quite as fundamental as the odds that the bookies offer. Unfortunately, betting odds can prove very confusing. That’s especially true for people who are new to betting.
Jun 15, 2020 Betting odds explained: How do odds work? Whether you use a complex model, a simplified power rankings system or just odds comparison from an efficient bookmaker to one that hasn’t managed their odds correctly, the concept of value always remains the same. Betting Odds Explained Fractional Odds. In the past, the most commonly used betting odds globally were fractional. They still remain the most. Decimal odds are becoming increasingly popular among bookmakers, commonly known as bookies. In the United States. Sports Betting Explained: Vegas Sportsbook Odds Explained The experienced MyBookie team is willing to offer you a way to better understanding and explaining sports betting. Our exclusive betting guide covers every topic related to betting, From straight wagers and money lines, to future bets and teasers; we have anything you need to have a successful and profitable NFL Football Betting season.
Converting Odds to Implied Probabilities Fractional odds are sometimes called British odds or traditional odds and are sometimes written as a fraction, such as. Decimal odds represents the amount that is won for every $1 that is wagered. For instance, if the odds are 3.00 that a. Odds are a set of numbers which indicate the likelihood of an event taking place. In gambling terms, the odds aren’t a true representation of probability, but show the ratio between the amount bet and the payout based on the probability calculated by the bookmakers. Now that we have that out of the way, let’s get down to business.
That’s where this article comes in. We’re going to explain exactly how betting odds work, how they are set and the differences in the ways they are displayed. After taking in all the information below, you will be much better equipped to set about making some profit.
What Do Betting Odds Represent?
At their most basic, betting odds tell you two things:
- How much you stand to make should the selection win
- The probability of the selection winning
Take this example. If you were looking through the weekend Premier League fixtures and saw a team had fractional odds of 2/1 (that’s decimal odds of 3.0) you would know that you stand to win £2 in profit from every £1 that you stake should the team win. You’d also know that the bookmaker who set the odds ranks the team’s chances of winning as one in every three times the game is played.
If you saw a team had fractional odds of 8/13, you’d know that for every £13 you stake, you will win £8 or profit and that if the game was played 21 times in total, the bookies think the team would win 13 times and fail to win eight times (what is known as the implied probability).
Working out an implied probability percentage from fractional odds is simple. You just divide the stake by the combined sum of the two numbers which make up the fractional odds. In the case of 2/1 the equation looks like this:
1 / (2+1) = 0.33 or 33%
For odds of 8/13 this is the equation:
13 / (8+13) = 0.62 or 62%
That’s how the maths works but when it comes to the actual odds that bookmakers set, it’s a little more complicated.
How Do Bookmakers Set Their Odds?
The basic business model of a sportsbook is fairly uncomplicated. Bookmakers set the odds and take bets on an event. When that event ends they pay out everyone who backed the winner and then keep the rest for themselves.
But, consider the following horse race.
| Selection | Fractional Odds | Decimal Odds | Implied Probability | Profit From a £10 Bet |
|---|---|---|---|---|
| Horse 1 | Evens | 2.0 | 50% | £10 |
| Horse 2 | 3/1 | 4.0 | 25% | £30 |
| Horse 3 | 7/1 | 8.0 | 12.5% | £70 |
| Horse 4 | 7/1 | 8.0 | 12.5% | £70 |
As you can see, the combined implied probability of the selections above is 100%. From a bookmaker’s perspective that is a big problem. That’s because, presuming they’ve got the same amount of liability on each selection, they’d never make any money as they’d have to collect and payout the same amount.
So, the bookmakers will build something called an overround into their odds. Here’s a real example of a match odds market from a football match:
| Selection | Fractional Odds | Decimal Odds | Implied Probability | Profit From a £10 Bet |
|---|---|---|---|---|
| Man Utd | 1/2 | 1.5 | 66.7% | £5 |
| Draw | 18/5 | 4.6 | 21.7% | £36 |
| West Ham | 13/2 | 7.5 | 13.3% | £65 |
With an total implied probability of 101.7%, the bookmaker who set those odds is guaranteed to make a profit of 1.7% assuming that they have the same amount of liability on all three selections. Of course, it rarely works out that the bookies manage to spread their liability evenly but you need to know that when you look at a betting market you’re not simply looking at a reflection of how the bookies think the event will pan out. There’s much more going on behind the scenes.
Armed with this knowledge of how the bookmakers set their odds, you can concentrate on finding value. That is, finding a bet where you believe the odds (and therefore the implied probability) is too big. If the bookies think that a side has a 50% chance of winning but you think they’ve got a better chance than that, that’s value.
The Difference Between Decimal and Fractional Odds
You will have seen above that we’ve spoken about both fractional and decimal odds. They are just different ways of conveying the same information but they do add another layer of complexity.
All the major online bookmakers will shows their odds as both fractions and decimals so it’s important that you understand just what they are showing and how to switch between the two. Thankfully, it only requires simple maths.
To go from a fraction to a decimal is as easy as dividing out the fraction and adding one. Here’s how that looks for odds of 2/1:
(2/1) + 1 = 3.o
And using our second example from above, 8/13, it looks like this:
(8/13) + 1 = 1.62
If you want to go from decimal odds to fractional odds is similarly simple. You just minus one from the decimal odds, turn that number into a fraction and reduce it down to it’s simplest form.
Let’s take decimal odds of 4.5, this is the equation:
4.5 – 1 = 3.5
35/10 -> 7/2
If the decimal price is 1.25, you convert it into fractional odds like this:
1.25 – 1 = 0.25
25/100 -> 1/4
Here’s a list of some of the most common fractional odds and their decimal equivalents (for a more in-depth list click here).
| Fractional Odds | Decimal Odds | Implied Probability |
|---|---|---|
| 1/10 | 1.10 | 90.9% |
| 1/5 | 1.2 | 83.33% |
| 2/5 | 1.4 | 71.43% |
| 1/2 | 1.5 | 66.67% |
| 1/1 (evens) | 2.0 | 50% |
| 3/2 | 2.5 | 40% |
| 2/1 | 3.0 | 33.33% |
| 4/1 | 5.0 | 20% |
| 9/1 | 10.0 | 10% |
| 100/1 | 101.0 | 0.99% |
Key Terminology
When reading betting advice or searching for a value bet on the bookies’ websites you’ll come across some key terms relating to betting odds. To round up our article on betting odds, we’ve covered the most widely used terms to ensure you don’t get confused in your search for winners.
Stake – The amount of money that you place (or wager) on a specific bet.
Price – The price of a bet is simply another way of referring to the odds. You can either say that a football team can be backed at odds of 2/1or that their price is 2/1.
Odds On & Odds Against – Two of the key terms that you’ll hear when it comes to betting odds are ‘odds on’ and ‘odds against’. These terms refer to whether a price is greater or lower than evens. Any price above evens is known as odds against, while anything below evens is odds on.
Short and Long Odds – If something is described as being short odds it means the price is low. A long odds shot will provide you with a bigger win but is much less likely to win.
- Betting odds tell you how likely an event is to happen
- They also tell you how much money you will win
- However, at first, they may seem confusing and complex
- Our comprehensive guide takes you step-by-step to explain them
If you’re new to betting, one of the first things you should do is learn how betting odds work. It’s critically important because it allows you to understand how likely an event is to happen, and what your potential winnings will be. At first, it may appear confusing, however, read our guide and let us explain it to you.
In gambling, odds represent the ratio between the amounts staked by parties to a wager or bet. Thus, odds of 3 to 1 mean the first party (the bookmaker) stakes three times the amount staked by the second party (the bettor).
What is Probability?
The most basic level, betting provides you with the ability to predict the outcome of a certain event, and if your prediction is correct, you will win money. For any given event, there are a certain number of outcomes. Take rolling a dice for instance. If someone rolls a dice, there are six possible outcomes. Therefore, if you bet that the person rolls a ‘one’, there is a 16.67% chance that will happen. What betting odds merely do is present how likely the event is to happen. Bookies most frequently in the UK do this as a fraction, i.e. 4/7, whilst the vast majority also offer the ability to view them as decimals. Again, let us talk you through them. All will become clear.
Using Betting Odds to Calculate Probability
Whenever you see two numbers separated by a trailing slash, i.e. 10/1, this is known as fractional odds. From this, you can calculate how likely a given event is to happen with a calculation. For ease of explanation, let’s replace the numbers with letters i.e. 4/1 becomes A/B. Here is the calculation: Probability (%) = B / (A+B).
Explain Betting Odds
- 9/1 can be calculated as 1 / (9 + 1) = 0.10– There is a 10% chance that the event will happen.
- 4/1 can be calculated as 1 / (4 + 1) = 0.20 – There is a 20% chance that the event will happen.
- 1/1 can be calculated as 1 / (1 + 1) = 0.50 – There is a 50% chance that the event will happen.
- 1/4 can be calculated as 4 / (4 + 1) = 0.80 – There is a 80% chance that the event will happen.
Hooray! We’re making progress. Given a fraction, we can now tell how likely (the probability) what we’re going to bet on will happen. Now let’s figure out how much money can be won using betting odds.
Using Betting Odds to Calculate Winnings
Betting odds allow you to calculate how much money you will win if you make a bet. Let’s use the same examples as before, with the same replacement of numbers for letters, i.e. 4/1 becomes A/B. Quite simply, for every value of B that you bet, you will win A, plus the return of your stake.
- 9/1 for every £1 you bet, you will win £9.
- 4/1 for every £1 you bet, you will win £4.
- 1/1 for every £1 you bet, you will win £1.
- 1/4 for every £4 you bet, you will win £1.
What About Decimals?
Decimals are far more common on exchanges, such as Betfair, but all leading betting sites do give you the option to view betting odds in this format. They are an alternative to seeing betting odds in the fraction format, and in our opinion, are easier to work out. Here is the calculation: winnings = (odds * stake) – stake. Let’s illustrate it with some examples
- 9.0 can be calculated as (9.0 * £10 stake) – £10 stake = £80 winnings.
- 4.0 can be calculated as (4.0 * £10 stake) – £10 stake = £30 winnings.
- 2.5 can be calculated as (2.5 * £10 stake) – £10 stake = £15 winnings.
- 1.25 can be calculated as (1.25 * £10 stake) – £10 stake =£2.50 winnings.
You can use our bet calculator to help you calculate winnings.
USE BET CALCULATOR
Decimal Odds Versus Fractional Odds
In truth, one isn’t better than the other but there is certainly a trend emerging towards decimal odds. Historically fractional odds were used in the UK, especially on racetracks and on the high street. There are two key differences. Generally, decimal odds are easier to understand. Based on this, there has a movement to attract more people to horse racing by making it more accessible to the average punter. Ten years ago, if you were going to Cheltenham, all the odds would be displayed as fractional odds. Now, they’re largely all in decimals. Don’t hesitate to check out our exclusive Premier League Betting Offers !
The second difference between the formats is that fractional odds only represent winnings, and do not include the returned stake compared to decimals which do include the stake. The transition from fractional odds to decimals largely kicked off with the growing popularity of the betting exchanges such Betfair. For odds to change slightly, it’s really difficult to marginally increase or decrease the probability without creating large fractions which are hard to compute for the punter.
Use Our Tool to Convert Betting Odds Into Your Favourite Format
Our odds converter toolwill allow you see odds in whatever format you like . Not only that, but it’ll tell you how likely the selection is to win!
In Summary
Betting Odds Explained
Betting odds represent the probability of an event to happen and therefore enable you to work out how much money you will win if your bet wins. As an example, with odds of 4/1, for every £1 you bet, you will win £4. There is a 20% chance of this happening, calculated by 1 / (4 + 1) = 0.20.
How Do Odds Work In Betting
Next steps
That’s it! Hopefully, that clears up betting odds. You should now have the knowledge to read betting odds, understand how likely it is to happen, and how much you stand to win.
Simple Explanation Of Betting Odds
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