It is important for newbies in betting to learn betting odds and how they work, This way they will be able to understand the likelihood of an event happening as well as what amount they would be getting as their potential payout. Calculating odds may appear to be confusing at first but it needs concentration for newcomers to master them and their different types.
In this piece, you will get a comprehensive explanation of betting odds, their types, how they are calculated, and how they work in betting.
What are Betting Odds?
Betting odds represent the possibility of an event occurring and it is calculated by bookies to balance out bets. The purpose of betting odds is to determine a bettor’s payout in the event of a win. This helps gamblers assess risks against rewards.
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Type of Betting Odds
Betting odds come in three different types.
- Decimal Odds
- Fractional Odds
- Moneyline Odds
Decimal Odds
Also known as European odds, Decimal odds are popularly used in Europe, Australia, and Canada. It shows a bettor’s payout per wagered dollar, the original bet inclusive. The format can be represented as 2.50 or 1.75
Calculating Decimal Odds
The payout formula here is to use the wagered amount to multiply the decimal odds.
For instance, you will get $25 in return for a bet of $10 at odds of 2.50 (10 x 2.50).
Calculating it by Implied Probability
Formula – Implied Probability (%) = (1 / Decimal Odds) x 100.
For instance, with decimal odds of 2.50, the implied probability would be (1 / 2.50) x 100 = 40%.
Decimal odds are easy to calculate, all you need do to get your potential payout is to use your stake to multiply the odds. For implied probability, the formula can be used to understand the possibility of a win.
Fractional Odds
Fractional odds or British odds are represented as fractions such as 5/1 or 10/11 – while the first figure is the possible profit, the second figure represents the stake. They are commonly used in the United Kingdom for horse racing and more.
Calculating Fractional Odds
Payout Formula
Fractional odds indicate the amount to be won per wagered unit. For instance
A 5/1 bet indicates that for every wagered $1, a bettor will win $5 if successful.
Calculating it by Implied Probability
The formula is – Implied Probability (%) = Denominator / (Numerator + Denominator) x 100. For instance
Implied probability for 5/1 odds is (1 / (5 + 1)) x 100 = 16.67%.
Profit-Per-Unit indicates your win depending on the fraction. Calculating Probability allows a bettor to evaluate his chance of striking a win based on odds.
Moneyline Odds
Moneyline wining probability are also called American odds and they are represented as either positive or negative numerals. The purpose is to indicate the stake or profit required to win. This type of odd is popularly used in the United States sports betting market
Calculating American Odds
- Positive Odds: Indicates profit on a $100 bet. For instance:
+200 means a $100 bet returns a $200 profit.
- Negative Odds: Shows the amount a bettor needs to wager to win $100. For instance
-150 means that a bettor needs to wager $150 to win $100.
Calculating it by Implied Probability
The formulas for calculating positive and negative odds vary
Implied probability calculations for positive odds = 100 / (Odds + 100) x 100.
Implied probability calculations for negative odds = |Odds| / (|Odds| + 100) x 100.
In American Odds, positive is used for potential profit while negative is used for required stake. The formula to be used in the probability calculation varies depending on the odds sign
Converting Odds into Implied Probability
Converting wagering probability into implied probability is something that must be mastered by bettors as it aids in evaluating true value. Below is a closer scrutiny of how each of the formats are calculated.
Decimal Odds for Probability
The formula is implied probability (%) = (1 / Decimal Odds) x 100. For instance,
decimal odds of 1.80 gives (1 / 1.80) x 100 = 55.56%.
Converting Fractional Odds
The formula is – implied probability (%) = Denominator / (Numerator + Denominator) x 100. For instance,
Odds of 3/1 imply a probability of (1 / (3 + 1)) x 100 = 25%.
Using American Odds
Positive Odds – implied probability (%) = 100 / (Odds + 100) x 100. For instance
+300 odds indicate a probability of (100 / (300 + 100)) x 100 = 25%.
Negative Odds – implied probability (%) = |Odds| / (|Odds| + 100) x 100. For instance
-200 odds shows an implied probability of (200 / (200 + 100)) x 100 = 66.67%.
Wrapping Up
A good understanding of betting probability is quite crucial for bettors who want to make it big in sports betting and other forms of wagering. This helps bettors make informed choices when it comes to betting and boosts their chances of bagging the jackpot. It doesn’t matter whether you are a newbie or an old hand, the guide on betting chances is very important.
