One of the most confusing aspects of sports betting for beginner punters is the idea of betting odds. The advantages of understanding betting odds and how to calculate them to help you comprehend your potential for success and your possible prize will become clearer to you as you gain expertise.
Since the idea of betting odds can be complicated, we’ll help you break it down into different sections to help you understand how it works exactly and what it means for your bets.
In short, this article will explain the meaning and significance of betting odds and how to use them to calculate crucial betting statistics, including the bookmaker’s edge and potential winnings. Ultimately, we will discuss how to translate betting odds into simpler units like probability so that newbies may comprehend the status of their wagers.
What Do Betting Odds Mean Exactly?
A betting odd is a bookmaker’s way of showing how likely they believe an event will happen. The event can be anything they allow you to bet on, including soccer matches or boxing bouts.
Bookmakers express betting odds in different ways depending on where you live. In the UK, you’ll likely see them as a fraction or a decimal, but American (or moneyline) odds typically look like a number with a plus or minus sign before it.
A more simplistic way to look at betting odds would be probabilities, a term you should understand if you’re reading this article. Probability is the likelihood of an event, and looking at the definition of betting odds I offered above, you’ll understand it’s close.
Before exploring the relationship between probability and odds in betting, it’s crucial to learn the different types of odds, as it is essential to understand the overlap between probabilities and odds.
Types of Odds
The goal of an online betting site or casino is to make a consistent profit, as that’s what keeps them in business. Ensuring the best and worst odds always favor them is one way they earn the required money to keep themselves in business, but that also brings up some issues.
One such issue is creating different types of odds. To help you better understand betting odds, below are the many sorts and how they vary.
- Fractional Odds
Fractional odds are expressed as a percentage and are the easiest to understand, leading to widespread acceptance worldwide. An example of a fractional odd is 4/1, with the numerator denoting your potential win and the denominator representing how much you have to stake.
For example, staking $100 on the 4/1 odd will guarantee a return of $400 if you win. Sometimes, bookmakers express fractional odds as a ratio, which is the same, except 4/1 becomes 4:1.
- Decimal Odds
Decimal odds are similar to fractional odds but don’t include how much you need to stake for the return. When you bet and win, you receive a single decimal number that shows you how much you won.
For example, placing $100 on a wager with 2.00 odds results in a $200 payment, which is rather simple. While it seems even more understandable than fractional odds, wait until you start seeing games with 2.73 odds.
- American Odds
Like every other unit, Americans express betting odds differently than the rest of the world, thanks to the American odds system. American odds, also referred to as moneyline odds, are figures that have a plus or minus sign preceding them.
American odds are surprisingly easy to read: the number represents your potential payout, while the plus or minus sign before them represents who the casino regards as favorites. Thanks to the overly simplistic nature of American odds, it’s only used in win-or-lose bets.
Despite the apparent differences between American, decimal, and fractional odds, they maintain a close relationship, and you can easily convert from one to the other. Understanding all three and their differences will help you learn how to convert from one to the other.
How to Convert Betting Odds
We’ve seen different types of odds so far, and the final paragraph from the preceding section maintains that you can convert from one to the other. If true, how do you convert a decimal odd to a fractional?
Here’s a quick guide on how to change swiftly between various betting odds. Get ready for some math.
- Converting Fractional to Decimal and American
You can easily convert fractional odds to decimal or American odds with simple equations. To convert fractional odds to decimal odds, work out the fraction and add one, which is your stake. The resulting number is what the odds would be in decimal form.
For example, 5/1 odds in the fractional form will give you 6.00 decimal odds. It’s typically more difficult when the odds don’t equate to a whole number. For example, 5/2 in fractional odds will equate to 3.50 odds in the decimal denomination.
To convert a fractional odd to a moneyline, you start by working out the fraction. If you get a figure that’s greater than one, the American odds equivalent is that figure multiplied by 100. On the other hand, the American odds would be “-100/the answer.”
Calculating American or moneyline odds from a decimal or fractional odd always gives you an approximate figure, as no one knows the algorithm casinos may use to choose favorites.
- Converting Decimal to Fractional and American
You can convert decimal odds to fractional by doing the inverse of the steps described a bit earlier. Since we added one after solving the fraction, the inverse would be to deduct one and then convert the answer to a fraction.
As an illustration, in order to convert 3.50 to fractional odds, you must:
- Deduct 1:
3.50 – 1 = 2.50
- Convert the answer to a fraction:
2.50 to fraction = 2.5/1
Simplifying to whole numbers = 2.5*2 / 1*2
= 5/2.
In short, 3.50 decimal odds = 5/2 fractional odds.
Also, you can estimate American odds from decimal odds by tweaking the fractional to moneyline conversion equation. The equation for converting decimal odds to fractional odds is “100*(Decimal Odds – 1)” if the decimal odds > 2, and “-100*(Decimal Odds – 1), if it’s
Here are the steps needed, to convert 3.50 decimal odds to fractional odds.
- Deduct 1:
3.50 – 1 = 2.50
- Since 3.50 > 2, multiply the result by 100:
100 * 2.5 = +250.
Again, this figure is an estimation; your online casino’s figure may differ.
- Converting American to Fractional and Decimal
With American odds being the most unreliable, it’s no surprise that converting it to fractional odds is a bit challenging. However, challenging doesn’t mean impossible, so here’s how to convert a moneyline to a decimal odd.
If the American odd has a positive sign before the number, the fractional equivalent would be “(the figure/100) + 1.” However, it would be “(-100/the figure) + 1” if it has a negative sign. For example, a +250 moneyline odd becomes 3.50 in decimal.
On the other hand, converting American odds to fractional odds is as simple as dividing it by 100 if it has a positive sign or dividing -100 by the figure if it has a negative sign. +250 in moneyline is 5/2 in fractional, while -150 is 2/3.
Relationship Between Probability and Betting Odds
At this point, the significant overlap between betting odds and probability is already apparent. One question remains unasked: how does probability relate to betting odds, if it does at all?
The goal of an online betting site or casino is to make a consistent profit, as that’s what keeps them in business. Ensuring the odds always favor them is one way they earn the required money to keep themselves in business, but that also brings up some issues.
One of those issues is the disconnect between probability and betting odds. Since bookmakers always add a margin to the odds, they don’t always add up to 100% when you convert them to percentages, giving rise to the term “implied probability.”
Put simply, the term “implied probability” is a kind of probability figure that accounts for the casino’s house edge. It always adds up to over 100%, and the remainder after subtracting 100% from the sums of all the implied probabilities for an event is the house edge.
For example, the probability of an incident occurring should be 2.00 for a 50% likelihood, while the actual odds are typically between 1.80 and 1.95, meaning that the likelihood is between 51% and 55%. If you sum up all the possibilities, you get around 102% to 110%. The 2-10% is the house edge, the bookmaker’s profit margin for facilitating the bet.
So, when calculating the probability of an event happening through betting odds, factoring in the house edge is crucial, explaining why implied probability is a more relevant metric to punters than actual probability.
How to Calculate Potential Winnings from Betting Odds
One of the most crucial pieces of information a betting odd carries is how much you can win when you stake a specified amount. It’s easy to calculate your potential winning from all three popular types of odds: moneyline, fractional, and decimal.
Here’s how to figure out your possible betting odds gains.
- Calculating Potential Winnings from Decimal Odds
You can calculate your potential payout from decimal odds, as bookmakers derive the figure from your potential winning. However, you can only get the specific amount you’ll get when you win if you know how much you’re staking.
If you know your stake and the odds, you can derive your payout by multiplying both figures. For example, if you wager $100 on a contest with 3.50 odds and win, you will receive a profit of $250. The reason it’s $250 and not $350 is the odds include your stake, and your payout is a sum of your stake and your profit.
In short, the entire payout will be $350, but your net profit is only $250. Most betting sites express your potential winnings to be inclusive of your stake because why not?
- Calculating Potential Winnings from Fractional Odds
Calculating potential winnings from fractional odds is easy when you understand what the figures mean. The numerator represents your potential payout, while the denominator is how much you must stake to earn it. Unlike decimal odds, it doesn’t include your stake.
For example, betting $200 on a game with 5/2 odds will earn you a $500 profit, bringing your total payout to $700. It is the most simple sort of odds to calculate possible earnings because a $100 wager will result in a $250 profit and a $350 payment.
However, the ratio isn’t always this simple, but you should be able to understand it regardless. If your favorite casino uses fractional odds, you’ll eventually be good enough to calculate your payout without a pen and paper.
- Calculating Potential Winnings from American or Moneyline Odds
The payout from American odds may seem difficult to calculate at first glance, but they aren’t as difficult as you think. Once you master it, you’ll understand why some punters prefer it when compared to fractional and decimal odds.
The amount you must wager to win $100 on a negative moneyline wager is indicated by the number following the negative sign. Hence, if you wager $150 on a game with -150 odds and win, you will receive $100. The team you are betting on is the favorite, which explains why you need to wager more to win.
On the other side, the sum you would win if you put $100 on a positive moneyline is indicated by the number following the plus sign. Staking $100 on a game with +350 odds will earn you $350 in profits. The plus sign before the number indicates that the team is not the favorite to win, hence the lower stake for high winning margins.
Note that the profit figures on American odds don’t include your stake. Hence, if you win at +350 odds, your total payment will be $350 plus your $100 wager.
Conclusion
Betting odds may seem complicated for beginners, but it’s pretty simple when you learn about the different types and how to calculate them as it will help boost your chances. In addition to the basic knowledge of betting odds, this article also explains how to convert between different types of betting odds and how to calculate your potential payout.
