Betting Odds Explained
Sports betting ensures that every match matters. Whether you are a sports betting beginner backing a hunch or a more experienced punter who studies form religiously, betting odds allow us to ascertain the best betting options. But to find the best value, it is important to understand how betting odds work.
In this article, we will run through the key facets of betting odds on today's sports betting platforms, including; how to read betting odds, how to calculate returns, the different formats used to write betting odds, and more.
Why Do Betting Odds Matter?
Betting odds give sports betting fans the structure to make bets. Simply put, if there are no odds, there is no sports betting. Odds can add intrigue and interest to a sporting content and 'level the playing field' in a sense. For example, if the odds for both teams to win were the same, you would typically choose Liverpool to beat Burnley in a Premier League football match. However, because odds vary according to the perceived probability of a particular outcome, there might be more value in the betting odds for Burnley to win. That's because you would win less when the favourite, rather than the underdog, wins. Let's move on to the basic theory that underpins betting odds.
How Do Betting Odds Work?
In their simplest form, betting odds represent the probability of an outcome occurring. They are used to calculate the potential return that you stand to make if your bet is successful. For example, if the odds for a team to win a game are 5/1, the determined likelihood that the team will win is 1 in 5 or 20%. If you place this bet and the team wins, you will win a profit of five times your stake; if you'd placed a £1 bet in this instance, your profit would be £5. Your initial stake of £1 would also be returned, for a total payout on the bet of £6.
Understanding Betting Odds: How To Read Betting Odds
The easiest way to understand betting odds is that they represent the chance your selection has of winning from the bookmaker's perspective, as well as how much money you would win if the bet is successful. Betting odds can be applied to every event that a bookmaker is taking bets on, including football betting, horse racing, golf, and other sports, as well as politics or TV programmes.
Betting odds are usually represented as fractions, decimal or 'moneyline odds'. We will use fractional odds, which are used in the UK, for the purposes of some examples in this article, but we will also cover how to read all forms.
Let's move on to an example of how fractional betting odds work, and how to calculate returns:
Fractional Betting Odds
With fractional odds, you can work out how much money you can win on your bet, compared to your stake. Let's look at an example - 3/1. The number on the left (3), is always how much you stand to win. The number on the right is your stake (the wager you make).
Say a horse is 9/1 to win the Grand National, one of the UK's biggest horse racing betting events. If you placed a £10 wager on this horse, and the horse won, you would receive £90 profit if the horse wins, under the terms of a standard bet. If you backed a horse to win at 5/2, a winning £10 wager would mean you recoup £25 in profit. Make sense?
Let's look at another way in which odds appear - when the first number is lower than the second in the fraction - 1/3 for example. In effect, nothing changes, as the second number remains your stake, and the first number is still your profits in relation to that stake. So if you bet £60 on a football team to win a game at 1/3, you would be risking that £60 for the chance to take £20 in profit.
Different Formats Of Betting Odds
Now that we have covered the fractional odds, let's move on to the other odds formats you may see or wish to use when betting online. This gives you an understanding of how to work out betting odds in whichever way works best for you so that you're able to compare the value of different bets on offer.
Decimal odds
Decimal point odds are based around the total payout - remember that this includes your original stake. However much your wager is, you simply multiply it by the decimal odds to work out the total payout. Along with fractional odds, decimal odds are commonly used in the UK.
So let's say a golfer is 15 to win an upcoming tournament. This means that if you were interested in betting on golf and placed £10 on them to triumph, and then they ended up lifting the trophy, you would take home £150 in total - in fractional odds, that would be written as 14/1. The payout here is 14 times your initial stake, plus the return of that stake, for a total of 15 times what you initially wagered.
Or if another golfer, perhaps a favourite for the tournament, was available at odds of 8.5, that means you would take home £85 in total from the same stake. This would be the equivalent of 15/2 if you wanted to convert the decimal odds to a fraction.
You would never see a minus (-) symbol when it comes to decimal odds. This is because decimal odds are always above 1.0, which represents your initial stake.
If you like decimals and want to convert betting odds from fractional to decimal, simply divide the number on the left by the number on the right and add one (to represent your stake). It's also worth noting that you'll often see decimal odds given to two decimal places, usually rounded to the nearest 0.05. For example, if a football team had odds of 5/2 of winning a game, we would divide 5 by 2 to give us 2.5 and then add one, for decimal odds of 3.5. This means that a winning £10 bet would pay out £35.
Moneyline Odds (American Odds)
While not so prevalent in UK betting, moneyline odds are commonly used in the sportsbooks of the US. However, it's worth knowing these bets to add to your knowledge of how betting odds work. And if you like this format, you can usually choose it in the settings options, often called American format.
Moneyline odds give a plus or minus value, and show how much a bet is worth based on a theoretical wager of £100 (or $100). Let's look at a basketball game such as the LA Lakers versus the Chicago Bulls. With the Bulls as underdogs and the Lakers favourites, moneyline odds may appear like this:
- Chicago Bulls +135
- LA Lakers -160
Using £100 as a guideline, if you bet on the underdogs, the Bulls, at +135, you would recoup £135 in profits if they won the match. If you backed the favourites, the Lakers, at -160, you would need to wager £160 in order to win £100 profits.
If these odds were written in fractional form, the Bulls would be 1.35/1 (which would more likely to be written as 11/8), and the Lakers would be 0.63/1 (more likely to be written as 8/13)
It is important to remember that moneyline odds allow you to calculate the profit - to work out the total payout, you must add your stake. So if a football team was a heavy favourite to win a match at -400, you would need to bet £400 to win £100 profit, and your total payout would be £500.
Which Format Of Betting Odds Is Most Commonly Used?
The format of odds you might see the most is likely to depend on which part of the world you are in. In the UK, for example, the default format for odds is usually fractional or decimal. But one format is not better than the others; they are simply different ways of writing the same information. It all comes down to having a firm grip on what odds mean and how you can calculate your returns. This way, you have more chance of identifying the best value in odds - and that is the name of the game!
A good understanding of what betting odds mean when they are presented in either of the three common formats will let you quickly make sense of the bets on offer. But if you find yourself faced with a format that is unfamiliar to you, remember that you can usually change which format you see the odds in. This is typically done via the settings option, which lets you choose between Decimal, Fractional or American betting odds, so you can see the options in the format you prefer.
Calculating Implied Probability From Betting Odds
As we have touched on above, odds represent the bookmaker's implied probability of an outcome occurring. If you ever want to calculate this implied probability, it is recommended that you first convert fractional or moneyline odds into the decimal format.
Let's look at an example of 3.50 for a team to win a football match. You can calculate the implied probability as a percentage quite easily using the following formula:
1 divided by the decimal odds, multiplied 100
Which can also be written as:
(1 / Decimal Odds) x 100
In this case, the answer to the equation is 28.57, meaning that the odds suggest the bookmaker believes the team has a 28.57 percent chance of winning the game.
We can calculate the probability of the team winning the game, as a percentage, by using the equation above:
(1 / 3.5) x 100 = 28.57%
Some people like to calculate the probability as a percentage to help them decide if a bet represents good value. In this example, if you believed the team had a better chance than 28.57% of winning the game, the bet may offer value to you. Or, another way of using implied probability is to consider whether you risk your stake for a 28.57% chance at gaining the return being offered?
How Do You Identify Value In Betting Odds?
If there is one' million-dollar question' in sports betting, then perhaps this is it! You should always look for value in betting odds, and this can be defined as outcomes that have a higher probability than the odds suggest. This might come down to a clue which you pick up in the form guides or just your personal opinion compared to the odds on offer. Of course, identifying these occasions doesn't mean you will win the bet, but you are certainly extracting the most value. So if you see one of the instances where you believe a team or competitor has a better chance of winning than the odds indicate, you should be ready to pounce.
We hope you found this article on how to read betting odds useful. Once you get accustomed to a certain format, you can find it is much easier to sniff out the value!