Gambling
Updated June 7, 2024
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How To Understand Betting Odds – The Ultimate Beginner’s Guide

Betting odds can confuse many bettors, especially newcomers. To help you better understand, we’ve compiled a thorough guide explaining how to understand odds

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We'll explain everything you need to know, including how to read odds, and give you answers to some of the most frequently asked questions. 

Betting Odds Explained: How to Read it? 

Understanding betting odds is essential if you're going to have a successful betting career. The good thing is that reading odds doesn't take much, and the math isn't too complicated. Odds in other countries differ, but we will focus on American odds. 

You'll see these on all sportsbook sites in the United States. It goes under different categories, including point spread, moneyline, and total. These are in terms of 100, and each one will have a plus or minus in front of them. 

They are in 100 because it's a 1:1 ratio, which means for every $1 you bet, you'll win $1 if your bet wins. If it's a plus, you'll win more than $100 on a $100 bet, and a minus means you'll have to bet more than $100 to win $100.

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What are Betting Odds?

Sports betting odds show the probability of an outcome occurring in a sporting event. Betting odds also give you insights into how much you can win after you wager a specific amount. 

In most cases, the winnings depend on the event's likelihood. Low odds indicate that a bookmaker believes an outcome is more likely to happen. Wagering with these odds and winning means you win less. 

In contrast, high odds indicate that a bookmaker believes an event is less likely to happen. If you wager with these odds and win, you win more. 

How Do Betting Odds Work?

Odds represent the outcome of a game. This can be who wins, what events will happen, or combined point amounts. The three main types of odds are American, fractional, and decimal. 

With that said, though, it's important to know that the type of bet differs, but the payouts do not.

Calculating Betting Odds

Sports betting odds consist of two major aspects. First, they show the possibility of an outcome occurring in a game or event. This figure you eventually see on the sportsbook as odds is based on probability and shows you the chances the sportsbook believes a bet has of winning. 

Secondly, sports betting odds will show the amount a bettor has to wager to make a profit. Sportsbooks try to keep both sides as even as possible. Not only will this save them from losing a bunch of money, but it guarantees that there is action on all lines, and anyone who wins can get a payout.

What is Vigorish: How does it affect Sports Betting Odds?

Vigorish goes by many names, including vig or juice. It is the amount the sportsbook charges when you place a wager. You can also see it as the percentage the betting site keeps for using its services. 

Ideally, you want to go for a sportsbook with a lower vig since it means you keep more of your winnings to yourself. While it is not easy to determine the vig from reading sports betting odds, we’ll break it down for you here. 

Imagine you wager $20 against your friend who will finish a video game first. This bet has a 50-50 outcome, which means the winner expects to get $40 in total, which is typically how it should go. 

But sportsbooks operate differently. Instead, a sportsbook will take a percentage out of the $40, leaving you with about $38 or more depending on the site. This is known as the vig or juice. 

How to Read Betting Odds: Different Types of Betting Odds Explained

As mentioned earlier, betting odds come in three major formats: American, fractional, and decimal. While our focus will be on American odds, we'll still briefly examine the other odds formats. Keep reading to learn more about the different betting odds to better understand them.

American Odds 

American Betting Odds are usually indicated with a (+) or (-) sign before the numbers. Positive numbers represent the underdog team and show how much you'll earn if you wager $100. 

Negative numbers represent the favorite team and show you how much you must wager to get $100 in profit. 

For example, let's say the odds are -150. You'll have to wager $150 to get $100 on a winning bet. If the odds are +130, you'll win $130 if your bet of $100 or more wins.

Calculating Winnings with American Odds

For the most part, the negative numbers stay around -110 or higher, which means a bet of $110 would give you winnings of $100 if your bet wins. This is considered the juice or vig for the sportsbook as discussed above, and they'll get a 10% cut regardless of how the game or match goes.

Sportsbooks do this to discourage bettors from betting much on the favorite. For example, let's say the Browns are in the Super Bowl and projected to win with odds of -500. This means you'll have to bet $500 to win $100.

On the other hand, this juice or vig could also encourage bettors to bet more if the plus side is higher. Let's use the same situation and say the Browns' odds are +500. Your $100 bet will give you a $500 win if the Browns come out on top. It's not hard to understand, but you'll want to ensure you're looking at the odds correctly to ensure you're not going to lose a bunch of money!

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Decimal Odds

The decimal odds are popular across Asia and Europe but have grown in popularity in U.S. sportsbooks due to their ease of use. Here, odds are indicated in decimals, showing you how much you'll win for every unit you stake. 

Calculating Payouts with Decimal Odds

Decimal odds are relatively easy to understand. In simple terms, you'll get $1 for every $1 you wager, including the original amount you placed on the bet. 

For instance, say you have odds of 5.0 for every $1 you stake. This means you get a payout of $5. Note that, unlike American odds, the payout in decimal odds also includes your original wager. In essence, you win $4 plus your $1 wager. 

How Do Fractional Odds Work?

Fractional odds are most common in the U.K. and are represented as fractions. These are also very easy to understand, as the number above or the left (numerator) is how much you'll win when you wager the (denominator) number below or by the right. 

Fractional or decimal odds both help calculate implied probability as it relates to the betting line. Many sports use online sports betting odds based on a variety of factors. 

Calculating Winnings with Fractional Odds

For example, let's say you have fractional odds of 7/2. This means for every $2 you wager, you’ll receive 7$. You might also see odds that look turned around, like 1/10 or 2/7. These are called odds-on and turn everything around. The first fraction means you’ll wager $10 to win $1, while the second means you’ll wager $7 to win $2. 

Another thing to consider with fractional odds is that it doesn’t include your initial wager. So, presuming you were to wager $100 at odds of 8/1, you’d win $800 in profit + your initial 100 bet to make a total of $900. 

The good thing about online sportsbooks is that most will show you the possible win. This means you won't have to do the math because the computer will do it for you. If you're new to sports betting, understanding the odds helps you determine how much you would win on the games you're betting.

Implied Probability in Sports Betting

Implied probability is the expected possibility of an outcome occurring as established by bookmakers. This figure is then indicated as a percentage after converting the odds. 

You'll need to convert odds to implied probability to determine how much you can get from a wager. If you anticipate a team's chance of winning is 55%, but the team has a 45% implied probability of winning, it means you have an edge over the sportsbook. 

Converting odds to probability is not straightforward, but you must learn how to go about it, especially if you want to be an avid sports bettor and prevent losses. Below, we'll look into how to convert the three types of odds into implied probability. 

Converting American Odds to Implied Probability

Remember that American odds feature underdogs and favorites. You'll need to implement different equations for each, which we have listed below: 

  • Favorites: Odds/ (Odds + 100) x 100 = Implied Probability 
  • Underdogs: 100/ (Odds + 100) x 100 = Implied Probability 

Let's use these equations in this example: 

The Kansas City Chiefs are a – 140 favorite to win against the 49ers with + 150 odds. 

Chiefs with moneyline odds of -140 will be calculated as follows: 

  • 140/ (140 + 100) x 100 = 140/240 x 100 
  • 140/240 = 0.583
  • 0.583 x 100 = 58.3% 

49ers, the underdog with moneyline odds of +150, will be calculated as follows: 

  • 100/ (150 + 100) x 100 = 100/250 x100
  • 100/250 = 0.4
  • 0.4 x 100 = 40%

In essence, 49ers have a 40% chance of winning the game based on the odds provided. 

Calculating the Vigorish 

As mentioned earlier, the vig/juice is the percentage the sportsbook keeps for itself. Let’s use the implied probability figures above to determine the vig. The first step is to add the two percentages: 

58.3 + 40 = 98.3 

Now subtract 100 from the total (100 - 98.3), which leaves you with 1.7%. This is a very reasonable juice since as a bettor who wants to make a profit, you'll want to aim for one that's as little as possible. That way, you can keep most of your earnings to yourself. 

Converting Fractional Odds to Implied Probability

Calculating the implied probability for fractional odds is easy using this formula: 

Denominator/ (denominator + numerator) x 100 = implied probability 

So, using this equation on an upcoming match on UniBet between the Hornets and Pacers. 

  • The Hornets at 9/2 odds: 2/ (2 + 8) x 100 = 20%
  • The Pacers at 2/13 odds: 13/ (13 + 2) x 100 = 86.6%

Using the same formula, the implied probability for the Pacers at 2/13 falls at 86.6%.

How to Convert American Odds to Different Formats

Sometimes, a sportsbook may offer odds that you are not comfortable with. Fortunately, we can convert these odds simply using our free betting calculator. But if you prefer to do math, we'll show you how to convert each type of betting odds in this section.  

How to Convert American Odds to Decimal Odds 

You can convert both positive and negative American odds to decimal odds. Let’s begin with the positive odds using the formula below. 

  • 1 + (American odds / 100)

Let's say that the odds are +160. You'd plug your numbers in; the equation should look like the one below.

  • 1 + (160/100) = 2.6

Now, let's look at the equation for converting minus odds.

  • 1 – (100 / American Odds)

Let's use -200 for this equation, which will look like the one listed next.

  • 1 – (100/-200) = 1.5

How to Convert American Odds to Fractional Odds 

To convert + American odds to Fractional odds, simply divide the American odds by 100 and turn the decimal into the simplest fraction. 

For instance, say you want to convert +300 American odds = 300/100 = 3/1 

To convert – American odds, divide the odds by -100

For instance, -100/ -300 = 1/3 

How to Convert Decimal Odds to American Odds 

Converting decimal odds is easy. However, the formula differs depending on the value of the odds. If the decimal odds is greater than or equal to 2 American odds, you'll need to follow this formula: 

  • (Decimal odds – 1) x 100

So let’s calculate using odds of 2.5

  • (2.5 -1) x 100 = 150 or +150. 

To convert decimal odds less than 2 American odds, use this formula: 

  • - 100/ (decimal odds - 1)

So, let us calculate using odds of 1.8 

  • = - 100/ (1.8 - 1) = 125 or -125 

How to Convert Fractional Odds to American Odds 

The first step to converting fractional odds to American odds is determining if the odds are less or greater than 1/1. If they are greater than this value, use this formula: 

  • (Fractional odds) x 100 

To calculate this using 6/2 = (6/2) x 100 = +300

If you want to convert fractional odds less than 1/1 in value, use this formula:

  • -100/ (fractional odds)

To calculate this using 6/2 = - 100 (6/2) = -300

FAQ

How do you read American sports betting odds?

The American odds are easy to read. They come in negative and positive values. The positive value, i.e., +120, shows the underdog, which means you'll win $120 when you wager $100. In contrast, a negative value like -110 shows how much you'll need to wager to win $100. 

Which odds are more likely to win?

Odds with a negative (-) in front indicate that a team has a higher chance or is favored to win. A positive (+), on the other hand, indicates that a team is the underdog and is less likely to win. 

How do bookmakers determine betting odds?

A bookmaker employs a trader or odds compiler to set odds. These experts properly evaluate team performance based on past results, skill, and recent form. Better teams will have lower odds since they have higher chances of winning, while less powerful teams will have higher odds.


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Comments (2)
@carpandean
8/30 8:35 AM
0
Not a bad article, but the numbers need to be cleaned up. For example, you have 1/2.41 = 41.7% and 1/2.41 = 62.11, which is obviously not possible. The second one is wrong (I assume 2.41 was not supposed to be used again.) Also, 1/4.5 = 0.222, not 0.171. 2/(8+2) = 0.200. If decimal odds are 4.5, then that's actually 7:2, which gives 2/(7+2) = 0.222. And so on. Small gripe: 0.171 = 17.1%, not 0.171*100=17.1%. The *100 is to give you the answer to "What percent?" I.e., 0.171*100=17.1, so we take that as 17.1 percent, if that makes sense. Not a big deal, just a minor technicality.
@vittacute
8/23 12:35 PM
1
Betting odds are a way of expressing the likelihood of an outcome in a gambling event. They are typically expressed as a ratio of the amount won to the amount wagered. For example, odds of 1/10 mean that for every $10 wagered, the gambler will win $1. There are three main types of betting odds: Fractional odds: These are the most common type of betting odds in the UK and Ireland. They are expressed as a fraction, with the numerator representing the amount won and the denominator representing the amount wagered. For example, odds of 2/1 mean that for every $1 wagered, the gambler will win $2. Decimal odds: These are the most common type of betting odds in Europe and most other parts of the world. They are expressed as a decimal number, with the amount won being equal to the amount wagered multiplied by the decimal odds. For example, odds of 2.0 mean that for every $1 wagered, the gambler will win $2. Moneyline odds: These are the most common type of betting odds in the United States. They are expressed as a positive or negative number, with the positive number representing the amount won for every $100 wagered and the negative number representing the amount that must be wagered to win $100. For example, odds of -110 mean that the gambler must wager $110 to win $100. Betting odds are set by bookmakers, who are companies that accept bets on sporting events. Bookmakers set odds based on their own assessment of the likelihood of each outcome. They also take into account the amount of money that has been wagered on each outcome by other gamblers. Betting odds can change over time, as new information becomes available or as more money is wagered on an event. Gamblers can use betting odds to help them make informed decisions about which events to bet on and how much to wager.
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