Understanding Odds – Guide for Beginners
18 July 2019
In sports betting there are many betting terms which are not easy to understand for a person who has never bet before.
It’s very complex and almost impossible for a bettor who has just discovered betting/online betting not to encounter difficulties.
To make it easier, we have written a guide that will explain betting terms and make them more understandable for the less experienced bettor.
In this article we will explain how to understand odds and how they work, so new bettors can get the most from them when betting.
What are Betting Odds?
In order for you to understand betting odds you must first know what they are, what they represent, and how much profit you can make when placing a bet.
There are three main types of odds you will encounter when placing a wager on sports betting, depending on the betting site you use and where in the world you are. These are:
• Fractional Odds
• Decimal Odds
• Moneyline / American
Fractional odds are shown as a fraction, such as 2/1, 11/8, or 10/11. This fraction shows how much you must stake (the denominator) to win the number shown as the numerator if your bet is successful.
For example, 2/1 means you must place 1 to win 2. Your total winnings is the fraction added together. So, in this case, you would win a total of 3 because you receive your stake money back.
Placing a bet of 8 on an 11/8 would give you winnings of 11, meaning you would receive a total of 19 back. If you were betting 100 on an 11/8 you would then need to divide the numerator by the denominator to work out your exact return, then multiply it by your stake.
So, here it would be:
• (11 / 8) x 100 = 137.50
Essentially the fraction then becomes 137.50/100.
Decimal odds are shown as a decimal number, such as 3.00, 2.38, or 1.91. This shows the exact total you will receive for every 1 you stake, including your stake money back.
So if you placed a wager of 100 on a bet at odds of 2.38, you multiply the stake by the decimal to work out your total winnings.
• 100 x 2.38 = 238
Your total winnings would be 238, meaning a profit of 138.
Moneyline odds, also known as American odds are a little different. These are shown as numbers with either a + or a – in front of it. The + number, such as +150 is how much profit you would make from a 100 stake. Moneyline odds with a -, such as -130, shows how much you need to stake in order to win 100.
So, if you placed a bet of 100 on a bet at odds of +150, you would win a total of 250. If you placed a bet of 130 on at odds of -130, you would win a total of 230.
Why are Betting Odds Important in Sports Betting?
Betting odds represent the implied probability of each result in a sporting event. In order to understand betting odds properly you must also understand probability.
Every bookmaker will set odds based on the implied probability for each selection. So if they believe a team has a 50% chance of winning a football match, they will set the odds at evens (1/1), or 2.00 in fractional odds.
There are several sites out there which offer betting odds calculators to convert odds into probability but there are also simple mathematical formulas to do this.
For fractional odds, we can use the formula:
• denominator / (numerator + denominator) = probability %
So, for odds of 11/8 this would become:
• 8 / (11 + 8) = 0.42
We then have to obviously multiply the answer by 100 to get the percentage. In this case, there’s a 42% chance of the selection winning based on implied probability set by the bookmaker.
For decimal odds, the formula is:
• (1 / decimal odds) x 100 = probability percentage
Odds of 2.25 makes the formula look like this:
• (1 / 2.25) x 100 = 44.44%
There are two different formulas for moneyline odds, with different ones for the plus or minus odds.
The plus moneyline odds formula is:
• 100 / ( + moneyline odds + 100 ) = ?
The answer is then multiplied by 100 to give you the implied probability percentage. Using odd of +150 we can see how the formula works.
• 100 / (150 + 100) = 0.4
Multiplied by 100 gives us implied probability of 40.
The minus moneyline formula is:
• – moneyline odds / (- moneyline odds + 100) = ?
So, for -130 odds the formula looks like:
• 130 / (130 +100) = ?
• So, 130 / 230 = 0.565
Multiplying the result by 100 gives us a percentage of 56.5%.
How Does Understanding Odds Help Increase Profit?
By understanding how betting odds work, you can clearly see which selection in a sporting event is the favourite and which is the outsider. This will help to see which selection the bookmaker believes will win and, by converting into probability, you can see how wide the margin is believed to be between the two selections.
Understanding odds also helps to identify value betting opportunities, which is how having knowledge on this subject helps to increase the chances of you making a healthy profit.
HOW TO CHOOSE THE BEST ONLINE BOOKMAKER?
Value odds are basically when you have carried out research and analysis to work out your own probability of a selection winning, and then you find the bookmaker has priced the selection up with a lower implied probability than what you gave them.
For example, after carrying out research, you have given a selection a 60% chance of winning.
When looking at the odds, you find the selection priced at 4/5 (1.8 decimal). Using the formula given above, or by looking at a betting odds convertor, you find this gives implied probability of 55.6%.
This is 4.4% lower than the probability you give the selection and therefore represents positive value in the market.
Finding value bets is recommended as a way of giving you an edge over the bookmaker and increasing your potential of a long-term profit.
Understanding betting odds is a key element of placing a bet and is something all beginners should strive to do before parting with their money. It’s not a difficult process and hopefully our guide has given you all the information required to increase your knowledge of the subject.
CRITERIA WE USE TO CHOOSE THE BEST BOOKMAKERS
- Odds quality
- Market coverage and selection of bets
- Betting limits on that sport
- Live streaming
- Sport specific bonuses and promotions
INFORMATION WE LOOK AT FOR ALL BOOKMAKERS
- Website quality and usability
- How easy is to deposit and withdraw funds?
- How good the customer service is
- Can you trust this bookmaker?