Explanation Of Betting Odds
If you’re new to the world of gambling, you need to make sure that you understand the odds before you ever place a bet.
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. Odds provide a measure of the likelihood of a particular outcome. They are calculated as the ratio of the number of events that produce that outcome to the number that do not. Odds are commonly used in.
To put it simply, betting odds are a numerical representation of how likely an event is to occur. Take the example of rolling dice. Because there are six possible outcomes from one roll of the dice, there’s a 16.67% chance that you’ll be correct in your guess of which number will be rolled. That’s 100 divided by six, which equals 16.6666666667, to be exact. This translates to a coefficient 6/1 chance of any specific outcome, or 7.0 if you remove the bookie’s margin.
The same basic principle applies to flipping a coin—a coin has two sides, so you have a 50% chance of winning.
Odds can also tell you how much money you will win. Let’s say you’re betting on a team with 4/1 odds in a sporting event. If you bet £/€1 and your team wins, you’ll receive £/€4, plus your stake back for a total of £/€5.
Although it may be confusing at first, it’s pertinent that you grasp how betting odds work if you want to make a go of online gambling or sports betting.
There are basically three types of betting odds: fractional, decimal and U.S. style.
Fractional Odds
In the past, the most commonly used betting odds globally were fractional. They still remain the most commonly-used and understood in the UK, though Hong Kong and Malay odds are favored in other parts of the world.
When you see 4/1 odds, to use the example above, those are fractional odds. This means you have a one in four chance of winning, or a 20% chance. To put it another way, you also have an 80% chance of losing. That also means the winner will be paid £/€4 for every dollar or pound waged.
The same goes for 9/1 odds. You’ll win £/€9 for every dollar or pound waged, but you also have only a 10% chance of winning and a 90% chance of losing.
Decimal Odds
Decimal odds are becoming increasingly popular among bookmakers, commonly known as bookies. Most often used in Europe and Asia, decimal odds use a number with a decimal point as opposed to the fractional format.
With 4/1 betting odds, the decimal odds are 5.0. To get this number, you take the percentage chance of winning (in this case, 20%) and see how many time it goes into 100. 100 divided by 20 is 5.
To figure out your winnings with decimal odds, you multiply the odds by your stake, and then subtract your stake from that number. For example, when the odds are 5.0 and you bet £/€10, you multiple 5 x 10 and then subtract 10, for total winnings of £/€40.
U.S. Odds
In the United States, betting odds are expressed using the plus or minus sign. The plus sign indicates the favorite, while the minus is for the underdog. For example, the favorite team might have odds of +250, while the underdog’s odds are -150.
The numbers are calculated according to how much one must wager in order to win $100. Using the example above, you must bet $150 in order to win $100 for the underdog team. If you bet $150 on the underdog team and they win, your winnings will be $250 (your $150 stake + $100 winnings). On the other hand, if you bet $100 on the team with +250 odds, your winnings will total $350 (your $100 stake + $250 winnings). That said, the more you bet, the more you win, obviously. If you bet $150 rather than $100, your winnings with the favorite team would be $400 (your $150 stake + $250 winnings).
Now that you’ve had you know how betting odds work, you should have a better chance of winning, no matter which style of odds your bookie uses.
There are a number of online articles that can help you further understand how betting odds work. A little research can go a long way toward ensuring that you’re as successful as possible.
- 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).
- 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.
Explanation Of Vegas Betting Odds
You can use our bet calculator to help you calculate winnings.
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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
What Do Betting Odds Mean
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 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.
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.
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