When it comes to betting, there are numerous terms that one may find foreign, but the best platforms such as Bet999 have you covered. If you don’t know what these terms mean, you might not find betting as easy as it should be. Also, the way a novice may interpret these terms may differ totally from how advanced players understand them.
To get a better understanding of these terms, one may need to look at them from an advanced player’s point of view. One such term is “betting odds.”
What are betting odds? How do they work? How are they calculated? What else should you know about the term “betting odds?” Read on to learn more about this term from an advanced player’s point of view.
What are Betting Odds?
Basically, odds mean probability. It is a mathematical way of calculating the tendencies for an event to take place.
Betting, at its most fundamental, is simply a means by which an event’s result can be predicted and acted upon. It’s a moneymaker if your forecast comes true.
There is a fixed number of possible outcomes for any occurrence. Consider the act of throwing a die. There are six possible results from a single-die throw based on the face that surfaces. Now, assume a person places a wager on attaining a one.
The odds of winning a wager on the outcome of a roll of one are 16.67%. This is a simple math result attained by dividing the total percentage (hundred) by the number of possible outcomes.
What Do Betting Odds Mean for Advanced Players?
Betting odds are the betting chances or probability, which are percentages on a certain result as set by a bookmaker. For example, an online casino may determine the chances of Croatia winning a World Cup to be 7/1.
Here, the bookmaker, which is the online casino, has set the betting chances, which are the percentages of a certain result. A bettor may then receive this chance at 7/1. This means that the bookie will bet seven times the amount that the bettor put up.
The bettor will collect seven times the amount wagered from the bookmaker if the result they anticipated actually occurs (in this case). If you bet $1, for instance, the bookie would give you $8 back—$7 in earnings plus your original investment of $1.
How are Betting Odds Calculated?
Bookmakers carry out the job of determining the betting odds. They will make the best guess as to how likely something is, and then present chances on the outcome.
The chances of Congo winning the World Cup, for instance, would likely be around 70/1. This indicates the low likelihood of this happening and the high possible reward a bettor would receive should this occur.
Readers and bettors at certain casinos can make special requests for chances. Bettors can be among the first to wager on an unlisted result by requesting chances on that particular event.
For players, it takes time and practice to master the art of chance calculation. However, once you do, you’ll be much better prepared to make wagers in the future. Here is the process to take for your calculations:
Data Analysis
The first and most important stage in determining the chances is analyzing the available data. Bookmakers typically employ specialized workers, such as dealers and best odds compilers, to gather and interpret as much data as feasible.
By using cutting-edge hardware and software, they are able to produce near-perfect results. They can also conduct unbiased statistical analysis of each game and its outcomes.
This is why hundreds of thousands of events across dozens of sports have odds posted every day. Bookmakers need these experts because there is now far too much data for regular punters to process.
Budget Estimates
After figuring out the odds of each event happening, the financial forecasts are factored in. The amount of money bet on a given market is determined by complex formulas used by bookmakers. They also have a historical database of revenue forecasts that aids in the calculation.
Perhaps you’re wondering, “Why are financial forecasts so important?” The answer to that is quite straightforward—so that they don’t lose a ton of money due to confusion. Bookmakers use cash flow forecasts to keep track of individual balances on each result and wager.
This removes some potential for financial loss, and bookies dislike losing money to anyone, including their clients. Expected revenues are included in the chances, and they are also useful in promoting the events.
Bets that would otherwise never see the light of day would, with the addition of cash flow forecasts, draw more customers. The margin, whether high or low, is proportional to the level of interest in the game or competition.
Margin
Bookmakers must post the odds after determining their expected profit from the game. However, before being released to the public, chances are always tweaked. As a result of a mysterious element that bookies refer to as a “margin” or “juice,” bookmakers are able to turn a profit.
It is common knowledge that bookies do not provide their clients with honest chances. Therefore, an increasing number of punters are turning to online betting platforms.
In order to make a profit, bookies use the margin to offer chances that are marginally worse than the true odds. If there is an equal chance of either result happening, then the chances should be set at 2.0. This means that a bettor who risks $200, for example, stands to gain $400.
Unfortunately, bookies don’t give even money. They instead offer chances that are somewhere between 1.5 and 1.9, based on how generous they are feeling.
The term “margin” refers to this disparity in probabilities. In general, the finest internet bookmakers have a margin of three to five percent. Brick-and-mortar stores, on the contrary, have a margin that is greater because they pay more in taxes.
How to Read Betting Odds
Betting odds are written in different mathematical ways: fractional odds, decimal odds, and American money line odds. You need to understand how to translate each of them into percentages and probabilities.
When searching for wagering odds, you will most likely come across fractional odds first. For instance, the payout for a given bet can be calculated using fractional chances. Hence, we’ll begin by examining these odds from the angles of fractions:
Fractional Odds
The chances of an occurrence occurring are displayed as a fraction in a fractional odds format. This is a basic and quick method to comprehend the likelihood of an occurrence occurring. It can also be used to calculate the potential payout from a bet.
Below are some fractional odds and how they’ll play out when applied:
- 2/1 – The bookmakers offer a return of $2 for every $1 wagered
- 18/2 – The bookmakers offer a return of $18 for every $2 wagered
- 3/7 – The bookmakers offer a return of $3 for every $7 wagered
- 1/1 – The bookmakers offer a return of $1 for every $1 wagered
The first two are known as “odds-against” wagers. They represent wagers in which the bookmaker is betting against the outcome of an event. This is because he or she believes it is highly improbable to occur.
There are also odds-on wagers, in which the bookmaker considers the outcome to be very probable. An “evens” bet is one in which the odds of winning are 50% when both integers are the same. You can see this in the last example given. Here, you have to double your stake.
Converting Fractions to Percentages
Considering the percentage return if one win can help one decide whether or not to place a stake. A player should do so by dividing the benefit by the wager.
Now, if you bet $100 at odds of 3/1 and win $300, you’ll get back $100 plus $300 from the bookmaker. Likewise, if you placed a £10 wager and won, you’d receive £30 in exchange plus your original stake of £10. That makes a total of £40.
A simple method for transforming fractional chances into percentages is (x / y) * 100, where x and y are the fractional odds, respectively. For example, a £100 wager at odds of 5/3 yields a return of 166.7%.
Hence, a player would earn $166.7 for every tenner spent. The total payoff is $266.7 once the wager is added to the sum earned.
Converting Fractions to Percentages
In some cases, calculating the likelihood of an event given a fraction of the odds is straightforward. In others, it may be more challenging.
Bettors who aren’t experts on a given event can benefit greatly from knowing the chances of various outcomes before placing wagers. Given a set of data, the formula (y / (x + y)) * 100 can be used to calculate the likelihood of a given outcome.
Decimal Odds
Decimal odds are another common type of chance used by gamblers. Decimal odds present the values in a numerical style. They are commonly used for a quick look at the likelihood of an occurrence.
In addition to providing a clearer picture of possible payouts, the use of decimal odds simplifies chance comparison for bettors. The greater the chance of receiving it, the higher the amount.
Multiplying the bet by the chances yields the potential payout. Below are samples to further illustrate this:
- 5.00 – With this value, staking $1 would yield $5
- 3:00 – With this value, staking $5 would yield $15
- 2.00 – With this value, staking $1 would yield $2
Converting Decimals to Percentages
When dealing with decimal chances, the winning proportion is obtained by multiplying the decimal by 100. E.g. 1.20 = 120%. This is not a profit margin but rather a proportion of the total quantity of money at stake.
To illustrate, let’s say a bettor wagers $100 at odds of 1.00. 1.00 multiplied by 100 equals 100%. Hence, 100 * 100% = $100
If the gamble is effective, the bettor receives a 100% return on their initial investment. This means they should receive $200.
Converting Decimals to Probabilities
Consider the value of the decimal when converting decimal chances to probability. If the odds are 2.00, then there is a 50% possibility that you will win. If the odds are greater than 2.00, there is a smaller possibility of winning.
You can convert chances expressed as decimals to percentages by using the method 100/odds. For example, if a team’s chances to win are 5.00, then their chance of victory is 100/5.0, or 20%. Bookmakers’ chances are always founded on probability and should never be taken as a guarantee that a certain occurrence will occur.
American Odds or Moneyline Odds
Sports bettors are well-versed in recognizing American odds, also called “moneyline odds.” These odds vary slightly from other kinds of wagers.
To begin, chances are always written with a plus or minus sign before the primary figure. As a group, they all show up in the tens of thousands. With +100 odds, you’ll earn $1 for every $1 you bet. Hence, consider the following before placing a bet on a platform using American odds:
- If the chances are posted with a plus sign in front of them, it is a positive American odd. This means that a winning wager of $100 will result in a payout of more than $100.
- When the chances are posted with a negative sign or a minus sign, it is a negative American odd. This means that the bettor must risk more than $100 in order to win $100.
Conclusion
With the calculation of these odds, professional bettors can easily estimate how much they make from each stake and how to boost their chances. It is necessary to distinguish between a bet with positive moneyline odds and a bet with negative moneyline odds in American odds. This is the first step before determining any potential profits.
Afterward, the formula “probability of winning = bet x (odds/100)” can be used to make your calculations. It’s not difficult to understand and utilize these odds in betting, after all.
