Betting Odds Explained
There are different types of betting odds, and they can sometimes be confusing to read. Reading odds correctly and understanding how odds work are crucial skills if you want to develop a winning betting strategy.
We cover the different types of betting odds, how you read them, and how you can make the odds work in your favor to maximize the chances of winning.
What Are Sports Betting Odds?
One of the first things to understand when it comes to sports betting is the odds. Whether you’re a novice or a pro sports bettor, it is important that you can understand and interpret all types of odds well.
Odds show the probability or the likelihood of one particular outcome happening in a sporting event. Odds are one of the indicators of whether or not a bet is worth making.
Bookmakers (also called bookies) generate and offer these odds, which give bettors an idea how much their payout will be if they win the bet.
Oddsmakers adjust the odds to balance out the action on both sides of every game. They tweak the line based on specific head-to-head matchups, home field advantage, scheduling, injuries, and even weather conditions.
How to Read the Different Types of Odds
The type of betting odds does not depend on the sporting event you’re betting on. The odds format used depends on where you are in the world.
For example, sports betting sites from Europe may use odds formats different from those used by sportsbooks in America.
Let’s delve into how these betting odds work and calculate your potential winnings using the different formats.
1. Fractional Odds
These betting odds are often used in Ireland and the U.K. These odds, often called UK odds, are one of the oldest forms used in horse racing.
Fractional odds are shown with a slash or dash to separate the numbers representing the amount of stake and the profit that you can earn.
Below is an example of a Premier League matchup using fractional odds:
|
Team |
Fractional Odds |
|
Manchester City |
10/11 |
|
Liverpool |
7/1 |
In fractions, the number above the slash is the numerator. The number below the slash is the denominator.
In fractional odds, the numerator is the amount won (profit), and the denominator is the stake amount.
Looking at the odds of Man City, you can determine the payout, which is $10, and the stake, which is $11. The odds mean that for every $11 you stake, you can earn a $10 profit.
With this example, if you bet $100 on Man City, you will get a profit of $90.91 and a total payout of $190.91.
To compute the total payout, follow this formula:
[Stake x Odds] + Stake = Total Payout
[100 x (10/11)] + 100 = $190.91
Meanwhile, if you bet on Liverpool, you can earn a $7 profit for every $1 you stake.
For instance, you bet $100 on Liverpool. Your potential profit for this bet is $700, and your total payout is $800.
Using the same formula:
[Stake x Odds] + Stake = Total Payout
[100 x (7/1)] + 100 = $800
If you’re betting on a matchup where there is a favorite and underdog, the odds of the favorites are often referred to as the “odds on.” The odds of the underdogs are referred to as the “odds against.”
For instance, in this matchup, Man City is the favorite and Liverpool is the underdog.
As you can see, winning a bet on the underdog has a larger payout than the favorite. This is because betting on the underdog is riskier, with less probability of winning than betting on the favorite.
Adjusting the odds this way is how sportsbooks balance the action in sports betting.
Fractional odds are often used in football leagues and soccer matches.
2. Decimal Odds
This type of betting odds is the most popular in New Zealand, Australia, Canada, and Europe.
These decimals represent the amount of money you can win for every $1 stake. You may find decimal odds much simpler than fractional odds.
To further study the decimal odds, let’s take a hockey matchup as an example.
|
Team |
Decimal Odds |
|
Colorado Avalanche |
2.3 |
|
Minnesota Wild |
1.6 |
The favorite and the underdog can easily be spotted in a set of decimal odds.
The underdog has a higher decimal number, meaning a higher payout and a higher risk (less likely to win the game).
Meanwhile, the favorite has a smaller decimal number and a lower risk (more likely to win the game).
Note that favorites always have odds lower than 2.0. Underdogs always have odds higher than 2.0.
In computing your total payout, you don’t have to add back the stake since it’s already included in the decimal number.
To compute the potential payout using the decimal odds in the examples above, we will use this formula:
Stake x Odds = Total Payout
If you bet $100 on the underdog, the Colorado Avalanche, the computation will look like this:
$100 x 2.3 = $230
You will get a total payout of $230, with a potential profit of $130 if you win the bet.
3. American Odds
The most common odds used by online sportsbooks in the United States today are the American odds or moneyline odds.
Sports like baseball rely solely on moneyline odds due to the lack of point spreads.
Typically, moneyline odds are used when you have to pick a winner and a loser between two teams.
Moneyline odds can also be used in other bet types like point spreads and totals.
Negative (-) and positive (+) signs attached to the odds indicate whether the team is a favorite or an underdog.
The positive sign is for the underdogs, while the negative sign is for the favorites.
Using an NFL match as an example, let’s compute the potential profit based on the given odds.
|
Team |
American Odds |
|
Kansas City Chiefs |
-130 |
|
Tampa Bay Buccaneers |
+200 |
The negative sign indicates that the Chiefs are the favorites. The positive sign means that the Buccaneers are the underdogs.
The negative number represents the amount you have to risk to win $100. The positive number represents the profit you’re going to make when you bet $100 on a particular team and that team wins.
So, if you bet on the underdog, the Tampa Bay Buccaneers, you have to bet $100 to win a $200 profit.
If you bet on the favorite, the Kansas City Chiefs, you have to bet $130 to win a $100 profit.
In some cases, the game results are a tie (a draw). For a bet to ‘push’ on a moneyline, the game should have ended in a tie and a tie or draw was not one of the bet options.
In sports betting, a push happens when there’s a tie between the bettor and the bookmaker or sportsbook.
When a push happens in a two-way moneyline (there’s no option for a draw), the stake will just be returned by the bookie.
Meanwhile, in a three-way moneyline where there is an option for a draw, a push is not applicable, because the outcome will be considered a loss.
Point spreads can also have moneylines attached. For example:
|
Team |
Point Spread |
Odds |
|
Las Vegas Raiders |
-4.5 |
-120 |
|
New York Giants |
+4.5 |
+140 |
A spread of -4.5 means Las Vegas is the favorite. To win the bet, the Raiders must win the game by 5 points or more.
In addition, you have to bet $120 to win a hundred if you want to place your stake on the Raiders.
At +4.5, New York is the underdog in this example. To win the bet, the Giants must win outright or not lose the game by more than 4 points.
Notice the +140 moneyline odds. This means that if you win the bet, you will get a profit of $140 for every $100 you stake.
Calculating for the Implied Probability
If you’re wondering why odds differ even when a particular sporting event has the same outcome, you have to understand that sportsbooks incorporate vigorish or vig in the odds.
This vig, also called sports betting juice, is the sportsbook’s commission from every bet placed on sporting events.
Odds are closely linked to the probability of a bet winning. Probabilities usually vary between 5% and 10%, although the standard vig is 10%.
To effectively read the odds, you have to remove the vig and then convert the odds to implied probability.
Implied probability is the probability rate of a possible outcome.
Moneyline Odds
For instance, consider moneyline odds for the NBA matchup of the Utah Jazz and the Dallas Mavericks.
Say the Utah Jazz are the favorite team with -182, and the Dallas Mavericks are the underdogs with +140 odds.
To compute the implied probability of the favorites:
[Odds/ (Odds + 100)] x 100
Utah Jazz: [182 / 282] x 100 = 64.54%
For the implied probability of the underdogs, the formula is:
[100/ (Odds + 100)] x 100
Dallas Mavericks: [100 / 240] x 100 = 41.67%
This means that the Utah Jazz have a 64.54% probability of winning the game. The Dallas Mavericks have 41.67%.
You can also use an odds calculator to quickly compute the implied probability.
If you add these probabilities, it will result in 106.21%. The 6.21% is the vig or juice incorporated in these odds.
Decimal Odds
Decimal odds represent the total return for every dollar staked plus the amount of money you bet. For this reason, they’re more advantageous to use than American odds when it comes to converting probabilities.
Computing the implied probability of decimal odds is as simple as following this formula:
1/ (decimal odds) x 100 = implied probability
For example, the decimal odds of the Minnesota Wild is 1.6 and the Colorado Avalanche is at 2.3.
Using the formula above, you can compute Minnesota Wild’s probability to win the game by:
(1/ 1.6) x 100 = 62.5%
While the computation for the Colorado Avalanche is the following:
(1/ 2.3) x 100 = 43.47%
From these probabilities, you can see that the favorites have a probability of 62.5% to win compared to the 43.47% of the underdogs.
Fractional Odds
To compute the implied probability of fractional odds, you can use this formula:
Denominator/ (denominator + numerator) x 100
Say we have the odds 12/14 for the Boston Bruins and 8/2 for the Philadelphia Flyers. In this matchup, the favorite is Boston, and the underdog is Philadelphia.
Let’s compute the implied probability of the favorite team, the Boston Bruins:
[14 / (14 + 12)] x 100 = 53.85%
And for the implied probability of the underdog, the Philadelphia Flyers:
[2 / (2 + 8) x 100] = 20%
In this representation, we can see that the probability of the Bruins winning the bet has an implied odds of 53.85% compared to the probability of the Flyers at only 20%.
Tips on Maximizing Betting Odds
Now that you know how to read and use the odds, we’ll give you some tips to maximize the sharp betting odds we provide.
Look at Value Bets
To determine value bets, you should remove the juice that the sportsbook includes in the odds and compute the implied probability.
Betting Against the Odds
In some instances, betting against the odds is an advantage to sports bettors.
You are betting against the odds when you bet on the underdog, where your potential profit is more significant than your stake.
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