- How Do Betting Odds Mean
- How Baseball Betting Odds Work
- How Betting Odds Work Plus
- How Does Sports Betting Odds Work
Odds are the numbers used by online bookmakers to show how likely something is to happen. They give you a quick indication of how much you could expect to win if your bet wins. This guide will introduce you to the world of odds, the different ways they can be used and what they mean to you and your matched betting journey.
With so many numbers appearing in different formats, betting websites can be overwhelming for the beginner. But as long as you can get to grips with a few simple mathematical ideas, it'll all become a lot easier. This guide will show you how betting odds work.
What are betting odds?
Odds are numbers that express how likely events are to happen. To illustrate this idea, here are the three possible outcomes of a football match for any team:
1. Win
2. Lose
3. Draw
American odds for betting on the favorite work by showing how much money you would have to bet in order to win $100. Things are different when betting on an underdog. The positive number shows how much you can win if you risk $100. You may notice that this is similar to 'odds-on' bets in UK markets. Sports betting lines on FanDuel Sportsbook are presented in what is called the 'American. A listed odd with a + sign in front of it, such as the +120 in our example above, shows us how much money you would win on a $100 bet. Using the +120 odds, it shows us that a $100 bet on that outcome would pay out $120 in profits. Again this can easily be converted into smaller or larger size bets. A $10 bet on +120 odds would pay out $12 in profits.
All of these have different possibilities, probabilities, chances – or odds – of happening.
How betting odds work
Betting odds are usually expressed either as fractions (e.g. ‘3/1') or as decimals (e.g. 4.0). Fractions were traditionally used to bet on horse racing and were most popular in high street betting shops in the UK, before the advent of internet gambling.
As the web has become more popular as a place to bet, European decimal odds have become more commonplace. Moneyline, or American, odds are favoured by US bookmakers and punters, and are often expressed as positive and negative values (e.g. +250, -400).
While the differences may seem confusing at first glance, they're simply different ways of expressing the same thing.
How to read betting odds
Once you understand betting odds and the differences between them, reading them becomes easy.
If a bookmaker offers odds of 3/1 for an event to occur, you stand to win £3 for every £1 you bet. If you bet on an event at odds of 7/2, then you stand to win £7 for every £2 you wager (winnings plus your stake).
You may also see odds expressed with the lowest number first e.g. 1/2 or 2/7. These are known as ‘odds-on selections' and are normally used when the likelihood of something happening is higher than not. Of course, this also means that your winnings will be less than your stake. At 2/7 you win £2 for every £7 you bet.
When the numbers on either side of the slash are the same (e.g. 1/1), we refer to them as ‘evens'.
You may also see odds expressed with the lowest number first e.g. 1/2 or 2/7. These are known as ‘odds-on selections' and are normally used when the likelihood of something happening is higher than not. Of course, this also means that your winnings will be less than your stake. At 2/7 you win £2 for every £7 you bet.
When the numbers on either side of the slash are the same (e.g. 1/1), we refer to them as ‘evens'.
If you'd like a bit more guidance, we have a full guide on how fractional odds work in betting.
In many ways, decimal odds are easier to understand. This is because all you have to do to calculate your potential winnings is multiply your stake by the odds. For example, if you make a £10 bet at odds of 4.5, you could potentially win £45 (including your stake).
By contrast, fractional odds can become confusing. For example, which odds give the best return – 16/5 or 3/1? You can work it out, but a glance at their decimal equivalents (4.2 and 4.0 respectively) quickly tells you which odds are most favourable. This is why we recommend that all beginners start betting using decimal odds.
You should bear in mind that decimal odds include your stake. So, if you bet £10 at odds of 2.5, you can expect to win £25 (£15 on top of your £10 stake). You should also know that 2.0 is the evens line, so numbers lower than this return a profit that is lower than your stake.
Moneyline odds aren't generally used in either the UK or Europe. But you might see them in American media and sites, especially those that cover boxing or mixed martial arts.
Moneyline odds use $100 as the evens line, with either positive or negative outcomes. So, if you have odds above the line, this tells you how much you profit you stand to make from a $100 bet. For example, if you put your money down at odds of +175, you can expect to make $175 profit from a winning bet.
If you the odds have a negative value, this tells you how much money you need to wager to win $100. So, if you want to bet on an event at odds of -175, you must bet $175 to win $100.
Converting decimal odds to fractions (and vice versa)
To convert decimals to fractions, subtract 1 from the decimal and find the nearest whole integer. So, if you have odds of 4.5, this becomes 3.5/1, which you can turn into 7/2 by multiplying both sides by 2. To convert fractional odds into decimals, divide the first number by the second and add one, e.g. 7/2 +1 = 4.5.
Using odds to find value
Now that you can convert odds into the perceived value, it means that you can work out whether you think the bookmakers' implied probability of an event occurring differs from your own.
For example, if you notice that Chelsea has scored a first half goal in 75% of their home games this season but the bookmaker has the market priced at 2.0 (50% implied probability) then you've just found some value.
The problem with this method though, is that you need to be better than the bookmaker at calculating probability. This is a difficult task considering the huge teams of mathematicians that they employ.
What is probability?
In betting terms, probability is odds expressed as a percentage. To help you understand probability, think of a coin toss: in this case, there are only two outcomes (usually heads or tails), each with exactly the same chance of landing. You calculate the probability with the following equation:
For every coin toss, heads has one out of two chances of landing. One divided by two is 0.5. Multiply by this by 100 to get the percentage, and you have 50%.
In the case of a deck of cards, there are four aces among 52 cards. Therefore, the probability of drawing an ace is 4/52, or 7.69%.
Because of the many factors involved, it is impossible to calculate exact probability in sports betting. All your bookmaker can do is set a probability based on the likely outcome (adjusted slightly for profit); this is known as ‘implied probability'.
Implied probability is important because it helps you decide whether it is worth betting on a certain event. You can work it out by dividing one by the decimal odds. Let's say the bookies give Stoke City odds of 2.5 (3/2) for winning a match against Huddersfield Town. Divide one by 2.5 to get the probability, which is 0.4 or 40%.
If you put £10 down on Stoke to win, you stand to gain £25 including your £10 stake. You can then work out the ‘expected value' of the bet using another equation:
In the case of Stoke versus Huddersfield above, the equation works out like so:
In the above example, you can expect to break even (neither win, nor lose money over time). If the expected value is less than zero, then the bet is of low quality; but the higher the expected value is above zero, the more money you stand to make from the wager over time.
The issue with betting odds is that they're always tipped in the bookmakers' favour to allow them to make a profit. So while the odds that bookies offer do tend to reflect the likely outcome, savvy punters can find the real value in the bet.
Here's how:
Let's say you believe the probability of Stoke City winning against Huddersfield Town to be 45% – slightly higher than the bookmakers' odds suggest. With your £10 stake at odds of 2.5, the equation we used previously gives you the following expected value:
In this case, the bet represents good value. The issue with this kind of betting is that it is all a matter of opinion. The fact that bookmakers have large teams of maths experts working out odds means that beating them at their own game can be very difficult.
The key thing when it comes to finding value is to look for the best odds on your chosen selection.
It's quite surprising how much odds can change from bookmaker to bookmaker. This is why it makes sense to shop around. Plus, that gives you the opportunity to take advantage of the bookmakers' bonuses and earn free cash.
At OddsMonkey we have a tool to help you find the best odds. OddsMatcher finds and analyses odds and then compares bookie against betting exchange. By backing and laying the same selection, you can extract value from bookmakers' free bets and turn them into real money!
That's called matched betting, which is what we specialise in helping you with. If you're interested in learning more, we have a free introduction to matched betting you can download that will explain it all.
Sports odds work by offering gamblers the chance to profit if they can correctly guess the outcome of a sports event or predict something that happens in sports. The odds represent the financial contract between the gambler and the bookmaker. The three main ways that sports odds are displayed are known as American odds, fractional odds and decimal odds. These three types of odds look different but represent the same thing: the payout for a winning bet in relation to the amount of money that was bet. Point spreads and over-under bets are other types of sports odds.
Casinos and sportsbooks profit when they have to pay out less than they receive in bets. They also collect a commission — sometimes called the 'juice' — on certain bet to increase their chances of making a profit. Sports odds typically are set so that the bookmaker can expect equal betting on each side of the bet, which would ensure that the bookmaker would not lose money, no matter what happens in the sports event. If the bookmaker collected juice on each bet, the bookmaker would be guaranteed to profit if the betting on each side was equal.
American Odds
One common way for bookmakers in the United States to display sports odds is to show either a plus sign (+) or minus sign (-) followed by a number. Odds with a minus sign represents how much money must be bet on a favorite — the team or competitor that is expected to win — in order to win $100 US Dollars (USD), and odds with a plus sign show how much money would be won if $100 USD was bet on an underdog — a team or competitor that is not expected to win. For example, the odds for betting on a favorite might be displayed as -120, which means that a gambler must bet $120 USD to win $100 USD. The odds for betting on an underdog might be displayed as +115, which means that for a winning bet of $100 USD, the gambler would make $115 USD. In a sports event that has one favorite and one underdog, such as a football game, the number listed in the odds for the favorite is higher than the number in the underdog's odds, which increases the bookmaker's chances of making a profit.
Gamblers should be aware that when American odds are used, the total payout for a winning bet is $100 USD more than the number displayed. For example, if a man bet $120 USD on a favorite with -120 odds and won the bet, he would receive a total of $220 USD back from the bookmaker — his original $120 USD bet plus the $100 USD that he won. Likewise, if he won a $100 USD bet on an underdog with +115 odds, he would receive a total of $215 USD back — his $100 USD bet plus the $115 USD he won.
It is not always necessary to bet exactly the amount shown. A gambler might choose to bet much more than $100 USD or want to win more than $100 USD. For example, a woman could bet $3,000 USD on an underdog with +130 odds, and if she won the bet, she would get back a total of $6,900 USD — her original $3,000 USD bet plus $3,900 USD, which is $130 USD for each $100 USD of her bet.
Fractional Odds
In the United Kingdom and in horse racing everywhere, odds typically are displayed in fractions, such as 8/5, 3/1 or 10/1. When spoken, these odds are read like ratios, such as 'eight to five,' 'three to one' or 'ten to one.' The first number is the amount of money that can be won on a bet in the amount of the second number. For example, if a gambler won a bet at 3/1 odds, he or she would win $3 USD for every $1 USD that was bet. Like American odds, the payout number does not include the amount of the original bet, which also is returned to the gambler. So a man who won a $250 USD bet at 3/1 odds would receive $1,000 USD back from the bookmaker — his original $250 USD bet plus his $750 USD winnings.
Decimal Odds
Unlike American odds and fractional odds, decimal odds show the gambler exactly what the payout will be based on the amount of the bet — the return of the original bet amount is built into the number. As the name implies, decimal odds are expressed in decimals, such as 1.50, 2.50 or 4.25. In these three examples, a winning bet of $200 USD would result in a total payout of $300 USD, $500 USD or $850 USD, which are simply the amount multiplied by the decimal shown in the odds. Decimal odds must be higher than 1.00, or even a winning bet would result in the gambler losing money. This method of displaying sports odds is popular in Canada, continental Europe and Australia.
Point Spreads
How Do Betting Odds Mean
For a sports event in which a score is kept, gamblers can bet on who will win as well as the margin of victory. Betting on who will win is referred to as a straight-up bet or betting on the moneyline, and betting on the margin of victory is referred to as a point-spread bet. Point spreads are expressed in numbers preceded by minus signs for favorites and plus signs for underdogs, such as -7.5 for a favorite in an American football game and +7.5 for the underdog in the same game.
A bet on a favorite is won when the favorite wins the game by more than the point spread, and a bet on the underdog is won when the underdog wins the game or loses by less than the point spread. For example, if a gambler bet on a team at a point spread of +8 and the team lost by only six points, the gambler would win the bet. On the other hand, if a gambler bet on a team at a point spread of -6 and the team won by only one point, the gambler would lose the bet. Bookmakers typically set the point spread based on both the expected result of the game and what odds will bring in equal betting on both sides.
Point spreads are sometimes listed with odds for the bet, such as -7(-110), -7(11/10) or -7(2.10). All of these odds represent the same bet — a team favored by seven points, with winnings of $11 USD for every $10 USD that is bet. If no odds are displayed with the point spread, it typically is implied that the odds are -110, 11/10 or 2.10.
Over-Under
How Baseball Betting Odds Work
Another common way to bet on sports event in which a score is kept is the over-under bet, also called betting on the total. In this type of bet, the gambler is betting on the total points scored in the game, regardless of how many points each team scores or which team wins. For example, if the over-under for a basketball game is 180, a gambler could bet the 'over' and win if more than 180 total points are scored or could bet the 'under' and win if fewer than 180 total points are scored. Just like point spreads, over-under bets typically are implied at -110, 11/10 or 2.10 odds unless otherwise specified.
How Betting Odds Work Plus
Other Types of Bets
How Does Sports Betting Odds Work
There are seemingly endless other ways for gamblers to bet on sports. Just a few examples are future bets, in which the bet depends on a result that will take place much later, such as a betting before the season on which team will win the championship; parlays, in which gamblers bet on multiple things and must win all of the bets to receive the payout, usually at very high odds; and proposition bets, in which gamblers bet on very specific results, such as the points scored by a single player or the number of times a certain thing happens in a game. There also are over-under bets that involve things other than the total points scored, such as the combined number of free throws for both teams in a basketball game or the combined number of passing yards for both teams in an American football game.
