Moneyline wagers represent the most straightforward way to bet on sports. A moneyline bet tasks the bettor with simply choosing the winner of a game, with no point spread involved.
All moneyline odds can be converted into implied probability, breaking down each team's chances of winning as implied by the sportsbook's moneyline on the game.
Converting moneyline odds into implied probability takes a bit of algebraic work. The Gaming Today Implied Probability Calculator takes that work out of the equation, however, instantly converting any moneyline number into an implied probability of winning.
- For less simple calculations where you aren't staking the bottom number to win the top number, you must multiply your stake by the numerator (the top number), then divide the result by the denominator (the bottom number). For example; If you place a $50 bet.
- The way that sportsbooks manufacture their odds and betting lines has changed drastically over the years. The sports betting industry was once dominated by old-school Vegas oddsmakers, but much has changed since the advent of online sportsbooks, as well as the fine-tuning of sports.
Implied Probability
For fraction betting odds, the formula is: Denominator / (Denominator + Numerator) If the fraction betting odds are 11/10, the formula would look like this: 10 / (11+10) = 10 / 21 = 0.4761904. Multiply your end result (0.4761904) by 100 to get the percentage: 47.6%.
How to use the vig calculator Enter American odds (ex: -110) for each team and view the 'Vig%' for the given odds. The vig percentage represents how much 'vig' or 'vigorish' the sportsbook is charging you. This is also known as 'juice' or 'hold' in the sports betting industry. Here we are with the third in a series of how to bet on sports. This is when things heat up! We're looking at the implied probabilities, implied odds and the.
Enter the American odds in the space provided and hit calculate to get the percent value. Note that you must place the '-' in front of favorite moneyline odds to get the proper implied probability.
What Is A Moneyline Bet?
A moneyline bet functions as a straight-up wager on which team will win a game. This kind of bet doesn't involve a point spread.
The underdog on the moneyline pays out at greater odds than the favorite. Sportsbooks generally display the moneyline, point spread, and totals odds on a game, but all three function as separate bets.
Here's a look at how DraftKings Sportsbook presented the lines on Super Bowl LV a few days before the game:
DraftKings Sportsbook Super Bowl LV Lines
| Point Spread | Total Points | Moneyline | |
|---|---|---|---|
| Kansas City Chiefs | -3 (-115) | Over 56 (-108) | (-162) |
| Tampa Bay Buccaneers | +3 (-106) | Under 56 (-113) | (+140) |
US sportsbooks generally display American odds, with potential payouts denoted by the '+' or '-' in front of the odds. The '+' indicates the underdog on the moneyline, while the '-' denotes the favorite.
DraftKings sets Tampa Bay as the Super Bowl LV underdog, with the Buccaneers paying out at (+140) moneyline odds. The sportsbook puts favored Kansas City at (-162) on the moneyline.
Note that the point spread and totals columns for the Super Bowl also display an American Odds payout. Moneyline bets don't involve any kind of point spread, however, and only concerns the straight-up winner of the game.
Finding Value In A Moneyline Bet
Using an implied probability calculator, you can convert the moneyline odds into an implied chance of winning for each team.
In this case, the (-162) moneyline on the Chiefs implies that Kansas City has a 61.83% chance of winning. Tampa Bay's (+140) odds convert to a 41.67% chance of winning.
Astute bettors look for value in moneyline bets, and that assessment requires converting the odds into implied probability. If you think the Buccaneers have better than a 41.67% chance of winning, for instance, the Tampa Bay (+140) line presents value.
What Is An Implied Probability Calculator?
You can plug in and moneyline odds into the Gaming Today Implied Probability Calculator and convert those odds into implied probability. Other sports betting odds calculators include tools that allow you to calculate moneyline odds or the house edge by inputting the sportsbook's offered moneyline odds.
Our implied probability calculator works the same way. Simply input the moneyline odds on either side of a bet, and the Gaming Today Implied Probability Calculator gives you an instant calculation of that team's implied probability.
For '+' moneyline odds, simply input the number without the '+' sign. So for the Buccaneers (+140) odds, for instance, just type '140' into the 'American Odds' field in the calculator.
After inputting '140' and clicking 'Calculate' we see that Tampa Bay's implied winning probability is 41.67%.
For '-' moneyline odds, be sure to include the '-' sign in front of the inputted number. Calculating Kansas City's (-162) moneyline odds yields a 61.83% implied winning probability for the Chiefs.
Using An Implied Probability Calculator To Place A Sports Bet
This Implied Probability Calculator converts American odds into implied probability. This calculation converts the odds into a form that is easier to quantify: percent likelihood of the event occurring. This type of calculator includes the sportsbook's margin, which means the combined probabilities don't add up to exactly 100%.
How The Implied Probability Calculator Works
Implied probability is most useful when determining the sportsbook's edge over the bettor. It is important to note: this is not the margin/vig/juice. This is simply the advantage they have in being profitable over the bettor. Though it will never tell you which team to select, determining the percent implied probability over 100% will point out lines where the book's advantage is lower. In being a successful sports bettor every percentage point counts, and each point the book gives back is one more win toward profitability for the bettor.
Implied Probability Calculation For Negative American Odds
Calculating implied probability is a little more complex for American odds. Let's take the classic coin flipping example where we know the actual probability is 50%: a -110 bet on Heads. Once again, the calculation is slightly different for minus odds versus plus odds.
Implied Probability = (-1*(Odds)) / (-1(Odds) + 100)
Which looks like:
Implied Probability = (-1*(-110)) / (-1(-110) + 100)
or:
52.4% or 0.524 = 110 / 210
That number should be familiar to experienced bettors as the break-even winning percentage bettors shoot for. Because -110 on one side of a bet usually means -110 on the other side too, we can add all the probabilities (in this case another -110 probability) to determine the sportsbook's edge.
(Heads Probability + Tails Probability) – 1 = Sportsbook's Edge
or:
(0.524 + 0.524) – 1 = 0.048 or 4.8%
Ideally you should be looking for bets with the lowest sportsbook edge you can. It is a subtle edge in sports betting, but remember the difference between winning at 52% and 53% is a world of difference.
Implied Probability Calculation For Positive American Odds
Let's work a positive odds example. We'll use the following moneyline bet where the favorite is -190 and the underdog is +160. First we break down the implied probability on +160 odds :
Implied Probability = 100 / (Odds + 100)
or:
38.4% or 0.384 = 100 / (160 + 100)
To get the other outcome, we calculate the -190 odds:
65.5% or 0.655 = (-1(-190)) / (-1(-190) + 100)
In the above example we see that the sportsbook's advantage is:
(0.384 + 0.655) – 1 = 3.9%
What this tells us is that with no other information a bet on the -190/+160 is more likely to be successful over the long term than the -110/-110 example.
What Is Line Movement?
Sportsbooks install moneyline odds on each game that gives the house a slight edge over the player in the long run.
In the Super Bowl example above, for instance, the implied probabilities for the Buccaneers and Chiefs add up to more than 100%. This happens because the sportsbooks offer this bet with the built-in house edge.
The sportsbooks aim to get enough bets on both sides of the Super Bowl to allow the house to make money no matter what. If the public puts heavy betting interest on one team, the sportsbook will start to shift the line the other way, with the goal of producing more wagers on the other team.
Legal Online Sports Betting In The US
More than a dozen US states currently offer legal online sports betting. Virginia and Michigan became the latest states to launch mobile sports wagering, with both states doing so in January 2021.
Several notable brands compete for market share in states like New Jersey, Pennsylvania, and Michigan. These states represent some of the top online sports betting markets in the US.
States That Offer Legal Online Sports Betting
- Nevada
- West Virginia
- New Hampshire
- Oregon
- Rhode Island
- Montana
- Washington DC
Top US Online Sportsbooks
FanDuel Sportsbook
How To Calculate Payout From American Odds
FanDuel Sportsbook takes the No. 1 spot as the biggest online sportsbook by market share in the US. The platform offers a robust selection of sports, betting types, and deposit/cashout options.
Ten states currently enjoy access to the FanDuel Sportsbook platform. Those jurisdictions include New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, West Virginia, Michigan, Tennessee, and Virginia.
DraftKings Sportsbook
DraftKings and FanDuel battle for mobile sports betting supremacy in several states. DraftKings Sportsbook offers one of the most comprehensive online sports betting platforms in the legal US industry.
Eleven different states can bet online at DraftKings Sportsbook. That list includes New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, West Virginia, Michigan, Tennessee, Virginia, and New Hampshire.
BetRivers Sportsbook
Known in the sports betting industry for its player-friendly welcome bonuses and creative prop bets, BetRivers has emerged as one of the top online sportsbooks in the US in just a short time.
BetRivers takes online sports bets in New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, Michigan, and Virginia.
Implied Probability Calculator FAQ
Is online sports betting legal in the US?
Yes. Federal laws permit states to choose to allow sports betting, both retail and online.
More than a dozen states offer legal online sports betting, and several more will likely join that list in the coming months.
When should I use an implied probability calculator?
Anytime you make a moneyline bet! Finding value on the moneyline requires that you convert the odds into an implied probability.
Once you have the implied probability for each team, you can then decide whether either team has a better chance of winning than the implied probability.
Is it legal to use an implied probability calculator?
Yes. Sharp bettors use tools like the Gaming Today Implied Probability Calculator for every wager they make.
Understanding how implied probability works related to moneyline odds is crucial to a winning betting strategy.
Who sets the odds at online sportsbooks?
Each sportsbook employs bookmakers, tasked with setting the odds on each game. After setting a line, the sportsbook will shift the odds one way or the other if the public is heavily favoring one side of the bet.
How do I convert American odds to fractional odds?
To convert '+' American odds into fractional odds, you must divide the odds by 100 and convert to a fraction. To convert +160 into fractional odds, for instance, divide 160 by 100 (160/100) and reduce that fraction to 8/5. American odds of +160 translates to 8/5 fractional odds.
To convert '-' American odds, divide 100 by the odds and convert to a fraction. As an example, for -160 odds, calculate as 100/160, and reduce to 5/8 fractional odds.
What is the best online sportsbook in the US?
The US legal online sports betting industry involves several high-quality platforms competing for wagering dollars.
Some of the top brands in the US include DraftKings Sportsbook, FanDuel Sportsbook, BetRivers, BetMGM, and William Hill.
Yes. Federal laws permit states to choose to allow sports betting, both retail and online.
More than a dozen states offer legal online sports betting, and several more will likely join that list in the coming months.
Anytime you make a moneyline bet! Finding value on the moneyline requires that you convert the odds into an implied probability.
Once you have the implied probability for each team, you can then decide whether either team has a better chance of winning than the implied probability.
Yes. Sharp bettors use tools like the Gaming Today Implied Probability Calculator for every wager they make.
Understanding how implied probability works related to moneyline odds is crucial to a winning betting strategy.
Each sportsbook employs bookmakers, tasked with setting the odds on each game. After setting a line, the sportsbook will shift the odds one way or the other if the public is heavily favoring one side of the bet.
To convert '+' American odds into fractional odds, you must divide the odds by 100 and convert to a fraction. To convert +160 into fractional odds, for instance, divide 160 by 100 (160/100) and reduce that fraction to 8/5. American odds of +160 translates to 8/5 fractional odds.
To convert '-' American odds, divide 100 by the odds and convert to a fraction. As an example, for -160 odds, calculate as 100/160, and reduce to 5/8 fractional odds.
The US legal online sports betting industry involves several high-quality platforms competing for wagering dollars.
Some of the top brands in the US include DraftKings Sportsbook, FanDuel Sportsbook, BetRivers, BetMGM, and William Hill.
Implied probability is the conversion of betting odds into a percentage. This tells us how often we need to win in order to break-even. Implied probability is used to isolate profitable wagers and calculate the bookmaker's margin. This guide will teach you how to convert American, Decimal, and Fractional odds into implied probability as well as evaluating how big of an advantage any given sportsbook has over you.
What is Implied Probability
How To Calculate Moneyline Odds
Implied probability is the direct conversion of the betting odds available at a sportsbook into a percentage. Because the bookmaker's commission is factored in this reveals the break-even percentage. One can only justify placing a bet if they believe it will win more often than the implied probability.
Bookmaker's adjust their markets in an attempt to attract an even amount of action to both sides of the game. This creates margins between the implied probability and the outcome probability. Taking advantage of this is the key to long-term sportsbetting success.
Let's start off by taking a look at how we can convert American, Decimal, and Fractional odds into percentages. This will be a direct calculation from the bookmaker's posted line so their commission will be factored in. This percentage will allow us to determine the break-even percentage.
American Odds into Implied Probability
When converting American odds into implied probability we need to differentiate between plus and minus odds. The calculations will be different for each one. Let's take a look at the following NFL game:
For minus odds we we will divide the absolute value of the odds by itself augmented by 100. Here is the formula:
IP = |Minus Moneyline Odds|/(|Minus Moneyline Odds + 100)
In the example above the Miami Dolphins have -150 odds to win the game. This means that their implied probability will be 150/(150 + 100) which simplifies to 150/250. This comes out to 0.6 which is 60%. When we have plus odds we will divide 100 by the odds augmented by 100:
IP = 100/(Plus Moneyline Odds + 100)
The Baltimore Ravens have +130 odds to win the match. Their implied probability is given by 100/(130 + 100) which simplifies to 100/230. This comes out to 0.435 which is 43.5%.
Decimal Odds into Implied Probability
This is the easiest odds format to convert into implied probability. The only thing you need to do is take the reciprocal of the odds by dividing it into 1:
IP = 1/Decimal Odds
Manchester United have 1.36 odds to defeat Swansea. Their implied probability is represented by 1/1.36 = 0.735 = 73.5%. You would need to win this wager 73.5% of the time in order to break even. Swansea's match odds are 9.50 which means their implied probability is 1/9.50 = 0.105 = 10.5%. You would need to win this wager 10.5% of the time in order to break even.
Fractional Odds into Implied Probability
Fractional odds can be converted into implied probability by dividing the denominator by the sum of the denominator and numerator:
IP = denominator/(denominator + numerator)
Let's take Bournemouth with 10/11 odds against Watford. The numerator is 10 and the denominator is 11. We will retrieve the implied probability with 11/(11+10) = 11/21 = 0.524 = 52.4%. If you believe Bournemouth have more than a 52.4% chance of emerging victorious then you would be making a good bet!
Bookmaker Margins
You should have noticed that in the calculations above the implied probability for all sides of a given betting market do not add up to 100%. This surplus reflects the bookmaker's margin. Their odds to not represent the statistical probability of an event. Knowing how to calculate bookmaker margins is crucial to ensuring that you are not getting ripped off. The larger the margin the more advantage the bookmaker has over you.
Calculating Bookmaker Margins
The margin will be expressed as a percentage above or below 100%. A market that is deemed fair would sit exactly at 100%. In order to calculate a bookmaker's margin on a given betting market by summing the implied probability of all possible outcomes. Let's look at an example:
In the match between Norwich and QPR the set of possible outcomes have odds of 1.80, 3.80, and 4.75 respectively. Converting these into implied probabilities gives us the following values:
1/1.80 = 0.556 = 55.6%
1/3.80 = 0.263 = 26.3%
1/4.75 = 0.211 = 21.1%
Next we will take the sum of all possible outcomes: 55.6% + 26.3% + 21.1% = 103%. The implied probability is 3% higher than a theoretical fair market. This means the bookmaker's margin for this betting market is 3%.
What is a Good Margin?
As bettors we want to find bookmakers that offer the lowest margins possible. The industry average for most spreads, moneylines, and totals is around 5%. Anything higher than this should be avoided as you are putting yourself at an unnecessary disadvantage.
Removing Vig/Juice from Moneylines
Let's work a positive odds example. We'll use the following moneyline bet where the favorite is -190 and the underdog is +160. First we break down the implied probability on +160 odds :
Implied Probability = 100 / (Odds + 100)
or:
38.4% or 0.384 = 100 / (160 + 100)
To get the other outcome, we calculate the -190 odds:
65.5% or 0.655 = (-1(-190)) / (-1(-190) + 100)
In the above example we see that the sportsbook's advantage is:
(0.384 + 0.655) – 1 = 3.9%
What this tells us is that with no other information a bet on the -190/+160 is more likely to be successful over the long term than the -110/-110 example.
What Is Line Movement?
Sportsbooks install moneyline odds on each game that gives the house a slight edge over the player in the long run.
In the Super Bowl example above, for instance, the implied probabilities for the Buccaneers and Chiefs add up to more than 100%. This happens because the sportsbooks offer this bet with the built-in house edge.
The sportsbooks aim to get enough bets on both sides of the Super Bowl to allow the house to make money no matter what. If the public puts heavy betting interest on one team, the sportsbook will start to shift the line the other way, with the goal of producing more wagers on the other team.
Legal Online Sports Betting In The US
More than a dozen US states currently offer legal online sports betting. Virginia and Michigan became the latest states to launch mobile sports wagering, with both states doing so in January 2021.
Several notable brands compete for market share in states like New Jersey, Pennsylvania, and Michigan. These states represent some of the top online sports betting markets in the US.
States That Offer Legal Online Sports Betting
- Nevada
- West Virginia
- New Hampshire
- Oregon
- Rhode Island
- Montana
- Washington DC
Top US Online Sportsbooks
FanDuel Sportsbook
How To Calculate Payout From American Odds
FanDuel Sportsbook takes the No. 1 spot as the biggest online sportsbook by market share in the US. The platform offers a robust selection of sports, betting types, and deposit/cashout options.
Ten states currently enjoy access to the FanDuel Sportsbook platform. Those jurisdictions include New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, West Virginia, Michigan, Tennessee, and Virginia.
DraftKings Sportsbook
DraftKings and FanDuel battle for mobile sports betting supremacy in several states. DraftKings Sportsbook offers one of the most comprehensive online sports betting platforms in the legal US industry.
Eleven different states can bet online at DraftKings Sportsbook. That list includes New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, West Virginia, Michigan, Tennessee, Virginia, and New Hampshire.
BetRivers Sportsbook
Known in the sports betting industry for its player-friendly welcome bonuses and creative prop bets, BetRivers has emerged as one of the top online sportsbooks in the US in just a short time.
BetRivers takes online sports bets in New Jersey, Pennsylvania, Illinois, Indiana, Iowa, Colorado, Michigan, and Virginia.
Implied Probability Calculator FAQ
Is online sports betting legal in the US?
Yes. Federal laws permit states to choose to allow sports betting, both retail and online.
More than a dozen states offer legal online sports betting, and several more will likely join that list in the coming months.
When should I use an implied probability calculator?
Anytime you make a moneyline bet! Finding value on the moneyline requires that you convert the odds into an implied probability.
Once you have the implied probability for each team, you can then decide whether either team has a better chance of winning than the implied probability.
Is it legal to use an implied probability calculator?
Yes. Sharp bettors use tools like the Gaming Today Implied Probability Calculator for every wager they make.
Understanding how implied probability works related to moneyline odds is crucial to a winning betting strategy.
Who sets the odds at online sportsbooks?
Each sportsbook employs bookmakers, tasked with setting the odds on each game. After setting a line, the sportsbook will shift the odds one way or the other if the public is heavily favoring one side of the bet.
How do I convert American odds to fractional odds?
To convert '+' American odds into fractional odds, you must divide the odds by 100 and convert to a fraction. To convert +160 into fractional odds, for instance, divide 160 by 100 (160/100) and reduce that fraction to 8/5. American odds of +160 translates to 8/5 fractional odds.
To convert '-' American odds, divide 100 by the odds and convert to a fraction. As an example, for -160 odds, calculate as 100/160, and reduce to 5/8 fractional odds.
What is the best online sportsbook in the US?
The US legal online sports betting industry involves several high-quality platforms competing for wagering dollars.
Some of the top brands in the US include DraftKings Sportsbook, FanDuel Sportsbook, BetRivers, BetMGM, and William Hill.
Yes. Federal laws permit states to choose to allow sports betting, both retail and online.
More than a dozen states offer legal online sports betting, and several more will likely join that list in the coming months.
Anytime you make a moneyline bet! Finding value on the moneyline requires that you convert the odds into an implied probability.
Once you have the implied probability for each team, you can then decide whether either team has a better chance of winning than the implied probability.
Yes. Sharp bettors use tools like the Gaming Today Implied Probability Calculator for every wager they make.
Understanding how implied probability works related to moneyline odds is crucial to a winning betting strategy.
Each sportsbook employs bookmakers, tasked with setting the odds on each game. After setting a line, the sportsbook will shift the odds one way or the other if the public is heavily favoring one side of the bet.
To convert '+' American odds into fractional odds, you must divide the odds by 100 and convert to a fraction. To convert +160 into fractional odds, for instance, divide 160 by 100 (160/100) and reduce that fraction to 8/5. American odds of +160 translates to 8/5 fractional odds.
To convert '-' American odds, divide 100 by the odds and convert to a fraction. As an example, for -160 odds, calculate as 100/160, and reduce to 5/8 fractional odds.
The US legal online sports betting industry involves several high-quality platforms competing for wagering dollars.
Some of the top brands in the US include DraftKings Sportsbook, FanDuel Sportsbook, BetRivers, BetMGM, and William Hill.
Implied probability is the conversion of betting odds into a percentage. This tells us how often we need to win in order to break-even. Implied probability is used to isolate profitable wagers and calculate the bookmaker's margin. This guide will teach you how to convert American, Decimal, and Fractional odds into implied probability as well as evaluating how big of an advantage any given sportsbook has over you.
What is Implied Probability
How To Calculate Moneyline Odds
Implied probability is the direct conversion of the betting odds available at a sportsbook into a percentage. Because the bookmaker's commission is factored in this reveals the break-even percentage. One can only justify placing a bet if they believe it will win more often than the implied probability.
Bookmaker's adjust their markets in an attempt to attract an even amount of action to both sides of the game. This creates margins between the implied probability and the outcome probability. Taking advantage of this is the key to long-term sportsbetting success.
Let's start off by taking a look at how we can convert American, Decimal, and Fractional odds into percentages. This will be a direct calculation from the bookmaker's posted line so their commission will be factored in. This percentage will allow us to determine the break-even percentage.
American Odds into Implied Probability
When converting American odds into implied probability we need to differentiate between plus and minus odds. The calculations will be different for each one. Let's take a look at the following NFL game:
For minus odds we we will divide the absolute value of the odds by itself augmented by 100. Here is the formula:
IP = |Minus Moneyline Odds|/(|Minus Moneyline Odds + 100)
In the example above the Miami Dolphins have -150 odds to win the game. This means that their implied probability will be 150/(150 + 100) which simplifies to 150/250. This comes out to 0.6 which is 60%. When we have plus odds we will divide 100 by the odds augmented by 100:
IP = 100/(Plus Moneyline Odds + 100)
The Baltimore Ravens have +130 odds to win the match. Their implied probability is given by 100/(130 + 100) which simplifies to 100/230. This comes out to 0.435 which is 43.5%.
Decimal Odds into Implied Probability
This is the easiest odds format to convert into implied probability. The only thing you need to do is take the reciprocal of the odds by dividing it into 1:
IP = 1/Decimal Odds
Manchester United have 1.36 odds to defeat Swansea. Their implied probability is represented by 1/1.36 = 0.735 = 73.5%. You would need to win this wager 73.5% of the time in order to break even. Swansea's match odds are 9.50 which means their implied probability is 1/9.50 = 0.105 = 10.5%. You would need to win this wager 10.5% of the time in order to break even.
Fractional Odds into Implied Probability
Fractional odds can be converted into implied probability by dividing the denominator by the sum of the denominator and numerator:
IP = denominator/(denominator + numerator)
Let's take Bournemouth with 10/11 odds against Watford. The numerator is 10 and the denominator is 11. We will retrieve the implied probability with 11/(11+10) = 11/21 = 0.524 = 52.4%. If you believe Bournemouth have more than a 52.4% chance of emerging victorious then you would be making a good bet!
Bookmaker Margins
You should have noticed that in the calculations above the implied probability for all sides of a given betting market do not add up to 100%. This surplus reflects the bookmaker's margin. Their odds to not represent the statistical probability of an event. Knowing how to calculate bookmaker margins is crucial to ensuring that you are not getting ripped off. The larger the margin the more advantage the bookmaker has over you.
Calculating Bookmaker Margins
The margin will be expressed as a percentage above or below 100%. A market that is deemed fair would sit exactly at 100%. In order to calculate a bookmaker's margin on a given betting market by summing the implied probability of all possible outcomes. Let's look at an example:
In the match between Norwich and QPR the set of possible outcomes have odds of 1.80, 3.80, and 4.75 respectively. Converting these into implied probabilities gives us the following values:
1/1.80 = 0.556 = 55.6%
1/3.80 = 0.263 = 26.3%
1/4.75 = 0.211 = 21.1%
Next we will take the sum of all possible outcomes: 55.6% + 26.3% + 21.1% = 103%. The implied probability is 3% higher than a theoretical fair market. This means the bookmaker's margin for this betting market is 3%.
What is a Good Margin?
As bettors we want to find bookmakers that offer the lowest margins possible. The industry average for most spreads, moneylines, and totals is around 5%. Anything higher than this should be avoided as you are putting yourself at an unnecessary disadvantage.
Removing Vig/Juice from Moneylines
Since implied probabilities are direct conversions of betting odds into percentages the bookmaker's margin is factored in. The implied probability represents how often you would need to win a wager of those odds in order to break even. We can perform an additional calculation to remove the margin to get the true probabilities.
Start off by calculating the implied probabilities of all possible outcomes for the betting market you are working with. Let's use the money line market for this NFL match between the Buffalo Bills and Philadelphia Eagles:
The Buffalo Bills implied probability is 1/2.70 = 0.370 = 37.0% and the Philadelphia Eagles implied probability is 1/1.50 = 0.667 = 66.7%. Next we will sum up the implied probabilities of all possible outcomes in order to evaluate the bookmaker's margin. Here we have 37.0% = 66.6% = 103.7% for a margin of 3.7%. In order to calculate the true probabilities we will need to make it out of 100%. This is accomplished by dividing the implied probability by the sum of the implied probabilities of all possible outcomes:
True Probability = Implied Probability/(Bookmaker Margin + 100%)
How To Calculate Odds Ratio In Sports
This means the true probabilities are 37.0%/103.7% = 0.357 = 35.7% for the Buffalo Bills and 66.7% / 103.7% = 0.643 = 64.3%. The sum of your true probabilities should add up to 100% (which is the case here).
Profitable Sportsbetting
To become a winning sportsbettor one must place wagers that hold positive expected value. There exists a margin between the real life winning percentage of a given betting market and that implied by the bookmaker's odds. In the next guide we will discuss how to create a projection model in order to estimate the real winning percentages of multiple betting markets. Comparing these numbers to the implied probabilities we learned how to calculate today will reveal which wagers have the most value.
